Warsh: A U.S.-China Trade War Would Cause “Shock For the Global Economy”

At a Glance

  • The next 12 months are critical to the global supply chain, says former Fed Governor

In a year filled with news of trade tensions, there may not be a bigger story than the trade war between the United States and China. It’s a trade partnership that former Federal Reserve Governor Kevin Warsh calls “the most important economic relationship in the world. The G2 relationship.” Much of the news around trade between the two nations has focused on which commodities and goods would see increased tariffs, and which industries would be most affected in a trade war.

In part two of our conversation with Warsh, he focuses on another area: the global supply chain. The shifting of that supply chain, which includes the key G2 link, would re-regionalize trade throughout the world.

“That would be quite a shock for the global economy and for businesses and participants in financial markets that would take some adjusting,” Warsh tells us.

Watch his full remarks in the above video. Watch part one of our conversation with Warsh here.

Evan Peterson is director of corporate marketing at CME Group and managing editor of OpenMarkets.

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