The U.S. and Japan face economic slowdowns amid trade tensions, with falling consumer confidence and cautious rate hikes, while China’s exports decline and inflation turns negative, threatening global economic stability.
Economic Strains Amid Trade Tensions
The ongoing trade war is putting pressure on the U.S. and Japanese economies, while China experiences a decline in exports. Economic indicators suggest that the U.S. faces a slowdown, highlighted by falling consumer confidence, which has dropped to its lowest level since 2022. In Japan, systemic vulnerabilities, particularly concerning household spending, delay anticipated rate hikes from the Bank of Japan (BOJ).
Japan’s Fragile Recovery
Japan’s economy continues to struggle, with a notable drop in household spending and weak export data. The BOJ’s cautious approach to potential rate hikes is influenced by these headwinds. While GDP showed modest growth, private consumption stagnated, prompting speculation that rate adjustments could be postponed until the second half of 2025 as the economy gradually recovers.
China’s Economic Challenges
China’s economic recovery remains endangered, chiefly due to the trade war’s impact on exports. Recent statistics reveal a significant decline in inflation, with deflation setting in for the first time in over a year. The government has initiated measures to stimulate growth, including a significant digital wallet program aimed at young individuals. However, general economic momentum is sluggish, compounded by rising trade tensions that threaten future growth prospects.
Source : Trade War Intensifies, Weighing on US, Japan, and China
