Will the US-China trade war impact American economic growth?

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The US-China trade war is expected to impact American economic growth.

Increasing expectations that the US-China trade war will affect American economic growth have led to a depreciation in the dollar. Analysts at Goldman Sachs no longer anticipate a trade agreement between Washington and Beijing before the 2020 presidential election, and have consequently lowered their forecast for fourth-quarter US growth. The firm also indicated that the probability of a prolonged trade conflict leading to a recession is escalating.
Reduced Capital Expenditure and Hiring

Uncertainty surrounding US trade policy may prompt companies within the United States to scale back their capital expenditures, decrease hiring, and reduce production levels. This sentiment drag, stemming from trade war intensification, is estimated by Goldman Sachs analysts to have a total impact on GDP ranging from 0.1 to 0.2 per cent.
Japanese Yen Strengthens

The Japanese yen has emerged as the top performing currency among its major counterparts this month, appreciating by 3 per cent. This rise is attributed to increased investor demand for Japanese government bonds following China's weakening of the yuan below the seven-per-dollar threshold last week. Consequently, hedge funds that typically borrow in yen for leveraged investments have been compelled to rapidly unwind their short positions on the yen, further driving up its value.
Market Focus on Economic Indicators

Market participants will be closely monitoring China's retail sales and industrial output figures for July, scheduled for release on Wednesday, to assess the trade war's influence on domestic economic activity. Additionally, attention will be directed towards the US Federal Reserve's annual symposium in Jackson Hole, Wyoming, later in the week, where investors will seek clearer indications regarding the future trajectory of interest rates. Current market expectations suggest two to three additional rate cuts by the Fed before the end of the year.

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Will the US-China trade war impact American economic growth?

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