US-China trade war could slash US$1 trillion from US economy in a decade warns Chamber of Commerce
- New study from the US Chamber of Commerce finds that should tariffs increase, US gross domestic product, employment, investment and trade will all decline
- Research focuses on the information communications technology sector, which is set to be among the hardest hit by a prolonged trade war
The year is 2029, the US-China trade war is still being waged, and it has cost the American economy US$1 trillion.
That is the warning contained in a new report commissioned by the US Chamber of Commerce, which calculates the cumulative hit to US growth over the next decade should trade tensions with China continue to escalate.
The study, conducted by the Rhodium Group, unpacks the economic impact of three rounds of tit-for-tat tariffs to date and also estimates the effect of a tariff increase to 25 per cent on the US$200 billion of Chinese products currently hit with a 10 per cent duty by the US government.
It finds that the tariffs significantly reduce US gross domestic product (GDP), employment and investment, while export and import prices will rise, making US products less competitive overseas and consumer products more expensive for American shoppers.
“In the five years after tariffs are implemented, average annual US GDP would fall US$64 billion to US$91 billion (0.3 per cent to 0.5 per cent) short of baseline potential,” the study found.