US-China trade war could lead to global recession

NYU professor ‘Dr. Doom’ predicts a destructive outcome

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'Dr. Doom' economist Nouriel Roubini (by Wikimedia Commons)

TAIPEI (Taiwan News) -- Economist Nouriel Roubini, known for his accurate prediction of the 2008 financial crisis, believes the ongoing trade war between the U.S. and China may cause another global recession.

In an interview on Bloomberg TV on Tuesday (June 2), Roubini laid out his prediction of another global recession. He claimed that “the consequences of this trade and tech war and cold war [are] the beginning[s] of de-globalization ... and the decoupling of the global economy. We’ll have to redo the global tech supply chain. And eventually by next year, if this escalates, it will be a global recession.”

Despite U.S. President Donald Trump and Chinese President Xi Jinping’s agreement to resume trade talks at the recent G20 summit in Osaka, Japan, Roubini is pessimistic about the trade war. Trump has stated that the U.S. will continue to negotiate trade with China “for the time being.”

Roubini said that the U.S.-China trade war is set to worsen and that the global manufacturing and technology sectors are already experiencing a downturn. He further asserted that if capital expenditure were to collapse, a chain reaction would cause a global recession in technology, manufacturing, and services, reported CNBC.

Roubini is the head of Roubini Macro Associates and a professor at New York University’s Stern School of Business. He is nicknamed ‘Dr. Doom’ for his gloomy predictions for the global economy.