US: Fully implemented tariffs to shave off 0.3% of GDP – Deutsche Bank

According to Zhiwei Zhang, China Chief Economist at Deutsche Bank, if fully implemented, the impact of the tariffs on the real economy would be 0.3% of GDP, which will likely show up mostly in 2019.

Key Quotes

“Zhiwei writes that the list of $200bn of products will go through the same consultation process the $50bn list went through. The US administration’s timeline is (1) receive comments by Aug 17, (2) hold a public hearing on Aug 20, and (3) receive post-hearing comments by Aug 30. Therefore he expects the earliest time some of the products on this list are subject to the 10% tariff would be in early September. That said Zhiwei expects half or more of the products of the list will be challenged in this consultation process.”

“In the previous round of consultation, 16bn out of the 50bn Chinese exports were removed from the list and replaced by other products. Consequently the 16bn new products are still in their consultation process and yet to turn effective.”

“The 200bn list announced will likely be more challenged as it is much more extensive and touches many final products, including consumer goods such as refrigerators and air conditioners.”