Global growth hangs on a Sino-American trade deal, according to the Paris-based Organization for Economic Cooperation and Development.
The OECD’s Interim Economic Outlook report published in September talked of a fragile and uncertain economic environment with mounting downside risks.
In an interview with CNBC on Wednesday, the Secretary-General of the OECD Angel Gurria made the downside risk explicit, noting that investment and trade growth are reliant on a Sino-American deal.
Guria said that President Trump confirmed on Tuesday – during a presentation at New York’s Economic Club – that a Sino-American deal was in sight. “We are betting on that,” the OECD General Secretary said.
However, President Trump also called China a “nation of cheaters,” Reuters reports.
The stakes of a deal are surging. “The rate of growth of trade has come down from 5.5% in 2017, “ Gurria said, adding that “as we speak, trade is going negative, it’s contracting.”
If nothing changes, China and the US will scale up tariffs on each other products on December 15.
In September, the OECD cut its global growth forecast to 2,9%, that is, the weakest rate since the 2008-2009 financial crisis.