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Potential for US trade war with China

Daryl Guppy
Daryl Guppy1/22/2018 08:00 AM GMT+08  • 5 min read
Potential for US trade war with China
SINGAPORE (Jan 22): Debt in the US continues to balloon to dangerous levels in what has been described as a debt-driven model of recovery. Yet, the Dow Jones Industrial Average breaks the 26,000 barrier while the federal government moves towards a financi
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SINGAPORE (Jan 22): Debt in the US continues to balloon to dangerous levels in what has been described as a debt-driven model of recovery. Yet, the Dow Jones Industrial Average breaks the 26,000 barrier while the federal government moves towards a financial shutdown.

China’s Dagong Global Credit Rating suggests that President Donald Trump’s tax reform package will add some US$1.5 trillion ($2 trillion) to the country’s already US$20 trillion national debt over the next decade. It notes that “massive tax cuts directly reduce the federal government’s sources of debt repayment”.

They believe Washington will find it difficult to cut spending, which means US budget deficits will increase. As a result, the US government will be forced to increase its borrowings to cover its budget deficits and repay maturing debt at a time when the US central bank is raising interest rates.

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