LEADERSHIP
LOOKING FORWARD
China-US trade war casts a shadow over 2020
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“ Our proprietary Trade Momentum Index shows that the worst is behind us : it has stopped deteriorating , while still remaining negative . In 2020 , we hence expect trade to remain in a low-growth regime , slightly accelerating to + 1.7 %, while the global economy continues to decelerate (+ 2.4 % after + 2.5 % in 2019 ),” says Ludovic Subran , Group Chief Economist at Allianz and Euler Hermes . “ The so-called ‘ phase 1 ’ deal between the US and China , despite being superficial , may bring some comfort . But renewed threats of tariffs and a busy political year ( global summits , US elections ) in 2020 should bring higher volatility , leaving no hope for sizeable improvement going forward .”
Euler Hermes notes the strongest export gains will be recorded in China ($ 90bn ) and the US ($ 87bn ). However , their trade feud has taken a toll : export gains for both countries will be roughly half of what they were in 2018 . Rising protectionism in the form of US tariffs on cars could target Germany and the UK next . As for electronics ($ 47bn ), metals ($ 42bn ) and machinery & equipment ($ 27bn ) will continue to ail in 2020 . In contrast , software and IT services ( USD62bn ), agrifood ($ 41bn ) and chemicals ($ 37bn ) will see moderate export gains . sectors , electronics ($ 47bn ), metals ($ 42bn ) and machinery & equipment ($ 27bn ) will continue to ail in 2020 . In contrast , software and IT services ( USD62bn ), agrifood ($ 41bn ) and chemicals ($ 37bn ) will see moderate export gains .
JANUARY 2020