Market insider reported the following article that brings about a very interesting topic, which concerns the global economy and financial markets as well. In the actual context, the trade war seems to be the main concern of businesses not only in the USA and China but also around the world regarding the world’s economic interconnection.
The article shows up the outcomes of a survey made by UBS in September 2019, one of the world’s largest banks, about the impact of the trade war on recruiting, hiring, and maintaining growth. It also focuses on the business owners’ sentiment and the political reaction of Trump administration over the trade conflict. To reveal that, many statistics were provided through analyzing UBS survey on trade war concerning the two following points:
-The ability of US businesses to keep hiring and investing.
-The percentage of UBS business owners who agreed that it hurts their businesses and the US economy and their approval of Trump administration’s approach policy and China as well.
The article has also exposed a qualitative analysis to show up the impact of the trade war on business sentiment for the future, but also to explain why US healthy businesses are so important for the economy.
only 25% of companies plan to stimulate hiring instead of 46%, while 24% of them plan investments against 36% in June 2019
As the tensions rise, the whole world’s economic operators are keeping a deep watch on every statement made by the US government. So, the author has shown up clearly what trump administration is thinking about the trade conflict.
The results of the UBS survey show a decline in hiring and investment by American companies. Thus, only 25% of companies plan to stimulate hiring instead of 46%, while 24% of them plan investments against 36% in June 2019.
Besides, they expect, overall, cutting more jobs and lowering investment increasing if the trade war continues. Moreover, the US business sentiment’s shift down may affect their health because the more these effects sustain, the more spending goes down which leads to an eventual economic contraction.
Mike Rya, Director of Investments for UBS Global Wealth Management in the Americas, argues the situation is getting alarming and business owners will have to be taken seriously.
Consequently, business health becomes an important indicator that influences directly the spending so as growth, especially for the US economy.
As US macroeconomic data deteriorating from both the US and China, Trump came out declaring his intention to go forward and put more pressure on his adversary with the belief that this decision has been looking for hurting only China. He also suggested that tariffs could lead to a recession.
To sum up, the actual economic condition proves that the trade war is a dark evil for businesses’ health. Most business owners have started to pull back on hiring and investing. As a result, spending goes down, growth drops, geopolitical tensions rise and the economy suffers more.
In light of this situation, trump administration came out to put more fire on China pushing the business sentiment to shift down and business owners to maintain cutting jobs and invest less.
Even The article has shown up in simple words how the trade war affects US businesses. However, the analysis conducted has limitations. First, it must mention how the other world’s economies are impacted too because we have mentioned earlier that they are global and interconnected. Even, some of them depend completely on the performance of the US economy to boost their exports and vice versa. Moreover, it would be wonderful to mention the impact of the trade war on the major stock market’s performance as one of the most reliable indicators of a recession or economic expansion. Finally, we suggest having some insight into Chinese policy given the worse economic condition the world has been put in.
