The ongoing trade war between US and China is starting to cripple the global economy and might eventually lead to a recession, says economist Nouriel Roubini who called out the US housing bubble.
Roubini, while talking to Bloomberg TV on Tuesday, said: “The consequences of this trade and tech war and cold war [are] the beginning of de-globalisation ... and the decoupling of the global economy. We’ll have to redo the global tech supply chain. And eventually by next year, if this escalates, it will be a global recession.”
US and China, who have slapped tariffs worth billions of dollars on each other’s goods, reached a truce at the recently held G20 summit in Japan. Roubini, however, is still pessimistic that the countries can work out a long-term trade agreement anytime soon.
“My base case is the trade and tech war between the US and China is going to get worse. Manufacturing is already in a recession globally. It’s affecting services and the tech sector is in a slowdown,” Roubini added.
Roubini, often referred to as “Dr Doom” because of his bearish outlook, also pointed out signs of global recession that are already visible.
“It has already been in the data, the collapse of capex. And once the capex is down, the industrial production is down and the employment is down, and you have the beginning of a global recession that starts in tech, then in manufacturing, then in industry and then goes to services,” Roubini said.
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