RBA Philip Lowe was reported saying in a private business event this week that trade war between US and China was the single biggest threat to the global economy. According to The Sydney Morning Herald and The Age, Lowe said “I do not have a clear idea of what strategy the US has. (Some in the US) say that it is time for Team West to muscle up against China and that is very worrying.”
In August RBA minutes released yesterday, it’s noted that “uncertainty around trade policy had already had a negative effect on investment in many economies”. And, Board “members observed that the escalation of the trade and technology disputes had increased the downside risks to the global growth outlook, although the central forecast was still for reasonable growth.”
Australian Prime Minister Scott Morrison, on the other hand, was rather calm on the situation. He said yesterday that “we’re going to have to get used to this for a while, this level of tension.” And, “we’ve just got to accommodate that, we’ve got to absorb it, we’ve got to see the opportunities in it, of which there are many.”
