Fred Hu, founder of Primavera Capital Group, advised against retaliating to Trump's trade policy, stating, 'If China chooses to retaliate and start a trade war, that's a lose-lose with global ramifications.' He emphasizes the importance of maintaining a cool head amid mounting pressures from tariffs.
Hu also remarked, 'Generally, tariffs have done more harm than good,' referencing historical examples like the Smoot-Hawley Tariff Act of 1930. He argues that such measures can exacerbate economic downturns, highlighting the negative impact on global trade and cooperation.
Goldman Sachs predicts that Trump's proposed tariffs would knock two percentage points off of China's GDP, while UBS has downgraded its 2025 China GDP growth forecast to around 4% due to the looming threat of U.S. tariffs.
Chinese officials are under pressure to maintain economic growth amidst Trump's tariff threats and existing challenges such as a housing slump. Despite measures rolled out since September, investor confidence remains low due to insufficient direct support for consumers.
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