Written in June 29, 2018

The escalating trade battle between the U.S. and the rest of the world is raising the risk of a meaningful slowing in an otherwise vibrant American economy. Below are some of the current situation caused by trade war.

- U.S equity futures followed Asian shares lower early Monday after an escalation of tensions over the
weekend.

- Companies are postponing investment and hiring due to uncertainty about what comes next.

While China has policy levers it can pull to try to offset the impact from trade struggles, Europe is more vulnerable, Zandi said. The ECB's benchmarket interest rate is already at zero. But there are many doubts in this opinion, and no one can be sure that China is ready for a trade war.

If you are interested in this article, the link below is an article about whether China is ready for a trade war.

https://www.bloomberg.com/news/articles/2018-06-25/as-trade-war-looms-china-wonders-whether-it-s-up-for-the-fight