BLOOMBERG: U.S.-China Trade War Still Biggest Global Risk, NAB’s Oster Says





Trade tensions between the U.S. and China pose a greater worry to the global economy than a nuclear North Korea, said National Australia Bank Ltd. chief economist Alan Oster.

The probability that the world’s two largest economies enter into a destructive trade war is around one-in-five, Oster said in an interview in Singapore. It’s the biggest risk to global growth that’s otherwise chugging along at a decent rate and should rise to 3.6 percent in 2018 from 3.4 percent this year, he said.

“It would kill Asia, and it would kill commodities,” and have flow-through effects to the world, said Oster, a former senior adviser to Federal Treasury in Australia, one of the world’s most China-reliant economies. “Overall, I think the world’s okay. Geopolitical risk is there a lot — who knows about North Korea — but I’m more worried about Trump and China.”

 Prospects of trade penalties, flagged since before the start of President Donald Trump’s White House tenure, are taking center stage this week during his first official visit to Asia. In a media briefing with Japanese Prime Minister Shinzo Abe, during his first stop on the five-nation jaunt, Trump pledged “very, very strong action” and “very soon” on trade relations with China.
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