Things are likely to escalate before they cool down.
In a note, economists at Goldman Sachs stated, they see a 60% chance that the United States would slap further tariffs on the final $300 billion of Chinese imports.
This is up from their previous estimate of 40%.
“Rhetoric in China has intensified… additional escalation looks likely from both sides, including tariff and non-tariff measures,” wrote economists at Goldman Sachs in a note late on Sunday.
They also see a 70% chance of the United States slapping further tariffs on Mexican imports following U.S. President Donald Trump announcing a levy on imports from Mexico last week.
As for the USMCA trade deal that will replace NAFTA, they see a 35% chance, down from 60%, that the trade deal will be ratified this year.