Shadows of global recession darken further, against the background of decline in manufacturing sector and US-China trade war

Third World WarWashington/London: The trade war between the United States and China is intensifying by the day, and even the global investors and big corporates have not been able to asses the effects properly. The economists have claimed that over the last few months, the manufacturing sector in Europe as well as Asia, is taking a major hit and these are the signs of darkening shadows of the global recession.


Leading financial institution Morgan Stanley has expressed a fear that the threat of global recession may realise in the next one year. Only last month, the International Monetary Fund had cautioned that the global economy is under threat, because of the US-China trade war.

The talks initiated for finding a solution for the US-China trade war have failed. Thereafter, US President Donald Trump has adopted a very harsh stand against China and has started preparations for fresh sanctions. Efforts are being made to stop the US operations of the Chinese companies, and indications are that China will be declared a currency manipulator.

global recession, trade war, economyChina has retaliated against this aggressive stand of President Trump and has imposed taxes on the US goods imported into China. At the same time, a proposal to make legislation targeting the US companies operating in China are also under consideration.

Other countries too are facing the heat of this war, between the top two economies of the world. The performance of the manufacturing sector in the leading European countries, the United Kingdom and Germany also is declining.

The index representing the manufacturing industry in the United Kingdom has declined up to 49.4. The German manufacturing index has declined for two consecutive months and currently it is at the lowest level, in the last six and a half years.

The leading Asian economies also have not been able to escape the effects. Information was recently received that the performance of the manufacturing sector in Japan, Malaysia, South Korea, Taiwan, Vietnam and India too, have shown a decline. The indices in all these countries have fallen below 50. The manufacturing index falling under 50, is considered to be a sign of economic recession.

The economists claimed that the intensifying US-China trade war and fall in the manufacturing indices in the major countries of the world, is a cause for concern, from the economy point of view. Experts pointed out that factors like Gulf tensions, including Iran, Brexit and Venezuela also can bring about upheavals in the global economy.

Leading financial institute Goldman Sachs has predicted that the US economy will slow down in the second quarter of this year. Whereas, financial institution Morgan Stanley has issued a clear warning that time left for the realisation of the threat of global recession, is only nine months.

With the lengthening shadows of the global recession, markets the world over, have reacted and the prices of crude oil, fuel gas and coal have declined, whereas, the Gold prices have jumped. The major crash has been reported in the US, European and Asian stock markets.

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