U.S.-China Trade War Causes Germany's GDP To Shrink

Uncertainties from the U.S.-China trade war have caused worry that the global economy will stall.

The trade war between the U.S. and China is affecting the global economy as Germany’s GDP shrinks and China’s economic growth slows down.

Germany’s GDP shrunk 0.1% over the past three months. Additionally, as China’s economic growth slows down, unemployment rates are on the rise. Some worry that in order for China to reach its goal of 6-6.5% economic growth that a stimulus package will need to be implemented.

“Trade conflicts, global uncertainty and the struggling automotive sector have finally brought the German economy down on its knee. In particular, increased uncertainty, rather than direct effects from the trade conflicts, have dented sentiment and hence economic activity,” said ING’s chief economist for Germany, Carsten Brzeski.

Stocks on Wall Street are performing better than expected, but only because President Trump has put a hold on implementing tariffs on $156 billion worth of goods from China. These goods include smartphones, laptops, toys and videogames. The tariffs were originally supposed to take full effect on September 1.

“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” President Trump said.

German manufacturing has decreased as well. Manufacturers are blaming the uncertainties that arise from the trade war as the reason for their underperformance.

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