The world’s largest mining company, BHP (ASX, NYSE:BHP) (LON:BLT) today downgraded its economic growth forecasts for the world’s two biggest economies, in what it calls a “lose-lose” outcome from increasing trade tensions.
The miner now expects China’s GDP growth to be “half to three quarters” of a percentage point lower over the next two years, chief commercial officer Arnoud Balhuizen said at a mining conference in Melbourne, Australia.
He noted that while the company, a major exporter to China, has not yet experienced any “material impact” from the Asian giant’s slowing economic growth, BHP had “to be realistic” as “the current situation will not be solved easily.”
On the flip side, Balhuizen said that less trade between Beijing and Washington would open the door to increased trade elsewhere.
“There’s a lot of other countries around the Sino-U.S. trade protection scenario which are actively upping their trade,” Balhuizen noted.
China’s economy grew less than the expected 6.5% in the third quarter, its weakest pace since the global financial crisis.
Things are set to get worse as the US is said to be ready to announce tariffs on all remaining Chinese imports by early December if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, Bloomberg reported, citing unnamed sources.
The new tariffs, if enacted, would be the final step in the Trump administration’s efforts to force Chinese leadership to the negotiation table through pressure on the nation’s goods.