The Impact of The Current U.S-China Trade War on The Global Economy

Tariffs could reduce U.S. output through a few channels.

Based on extensive reporting by most of the major financial news outlets, experts in an already fragile global retail market are worried about the potential adverse impact of the current U.S- China trade war on holidays sales and beyond.

An Executive at the Hong Kong-based cosmetic giant, Sa Sa International, called the trade dispute "The biggest risk" to his company's business going forward.

Guy Look, though admitting sales at his firm has been great for FY 2018, he fears things might take a dark turn, especially since there seems to be no viable agreement in place to end the trade battle between the United States and its frienemy, China.

Trade War Fears

With retail bellwether, Target reporting slowed growth, in their most recent financial results, most market analysts fear the worst is yet to come. Many fear that the U.S economy is poised to experience significant declines over the next 12 to 18 months as a result of current trade disputes with China.

Citi, on Wednesday, downgraded Sa Sa's stock to "Sell" after the company cited trade war fears and weakness in the Chinese Yuen as negative factors they believe will impact their business moving forward.

A Fear Trade

Last week, the U.S equities market suffered significant declines across the board, with tech stocks leading the way. The Dow Jones Industrial Average dropped 138 points, while the S&P 500 lost 0.5 percent. The Nasdaq also fell 0.1 percent.

The Tech Meltdown

The tech sector has seen the biggest declines out of the rest of the broader market, with Facebook, Apple, and Google all experiencing declines of at least 0.6 percent over the past week.