While Donald Trump has had a tumultuous first term as President the economy has remained very strong. Donald Trump risked the strong economy when he entered into a trade war with China. This tariff war has resulted in issues for mid-western farmers who received a $16 billion bailout earlier this year.
The large scale investment banks have also been watching US and China interaction with a close eye. Today, global finance giant, Goldman Sachs, predicted that Trump wouldn’t reach a resolution with China prior to the 2020 election.
Goldman analysts published a research note about the situation late on Monday night. Chief Economist Jan Hatzius wrote, “News since President Trump’s tariff announcement last Thursday indicates that U.S. and Chinese policymakers are taking a harder line, and we no longer expect a trade deal before the 2020 election.”
The Goldman Sachs analysts noted that they are not sure where the President may go at this point. The research note continued, “While we had previously assumed that President Trump would see making a deal as more advantageous to his 2020 re-election prospects, we are now less conﬁdent that this is his view.”
The bank sent a warning over both the US/China Trade War as well as uncertainty over Brexit. According to Hatzius, “In light of growing trade policy risks, market expectations for much deeper rate cuts, and an increase in global risk related to the possibility of a no-deal Brexit, we now expect a third 25bp (basis point) rate cut in October, for a total of 75bp of cuts.”