Although Germany’s economy emerged from stagnation to grow by 0.4% in the first quarter, the outlook remains fragile amid a manufacturing slump that will be challenged anew by the trade war. Investor confidence in Europe’s largest economy unexpectedly weakened this month for the first time since October.Such softness even before the conflict between the U.S. and China reached new lows reinforces the concerns.
U.S. shipments to China are more limited, though 5.1% of its agricultural production heads there as does 3.3% of its manufactured goods.“Higher tariffs would mean lower margins for producers and higher prices for consumers and, in turn, reduced demand. This would create widespread disruption along the supply chain.”still betting
A trade war would compound an existing softening in global growth, and add to a mix of issues, such as a cooling technology boom and weaker demand for cars, particularly in China. For companies, it means visibility about the broader global backdrop is low. “The world economy has been in a significant slowdown for a period,’’ said James Bevan, chief investment officer at CCLA Investment Management. “People just have to wake up and look at the trade data.’’
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