The lack of clarity surrounding the U.S.-China trade war is what's really hitting global growth, says ex- Deputy Treasury Secretary Sarah Bloom Raskin.
Several rounds of tariffs have been levied by the two global powers on billions of dollars of each other's goods, with the"One of the things actually weighing on the U.S. economy as well as the world economy really is the uncertainty regarding these trade tensions, it's very difficult to know what the end game is," said Ruskin, who was also a U.S. Federal Reserve governor between 2010 to 2014 under the Obama administration.
Citing a study conducted by Fed economists on how that uncertainty translates into slower growth, she said one thing it found was that "it's not necessarily the trade war, or the tariff itself that causes the slowdown — but the uncertainty around it." The tariffs we've seen to date just aren't big enough to explain the slowdown in global trade that we've seen."Knowing in essence what the end game is, what the goal is, when will it be over, I think that uncertainty is something that we should try to do what we can to eliminate, because it is really making growth actually slower than it has to be," said Raskin.
The trade dispute between U.S. and China has dragged on for more than a year now. Several rounds of negotiations between the two sides have so far failed to yield a breakthrough.
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