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Goldman Sachs sees U.S. trade war with China and Mexico escalating

Goldman Sachs sees U.S. trade war with China and Mexico escalating
FILE PHOTO: The Goldman Sachs headquarters building in the Manhattan borough of New York City, New York, U.S., December 19, 2018. REUTERS/Carlo Allegri/File Photo -
Carlo Allegri(Reuters)
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LONDON (Reuters) – Goldman Sachs economists said there was a 60% chance that the United States would slap tariffs on the final $300 billion (£237.1 billion) of Chinese imports, 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,” Goldman Sachs economists wrote in a note late on Sunday.

After U.S. President Donald Trump announced a levy on imports from Mexico last week, GS saw a 70% chance of the tariffs on Mexican imports coming into effect at 5% on June 10 and a more than 50% chance they will rise to 10% on July 1.

GS economists also cut their chances the USMCA trade agreement will be ratified this year to 35% from 60% previously.

They saw a 40% chance of tariffs on cars coming into effect later this year, from 25% previously.

(Reporting by Thyagaraju Adinarayan, Writing by Helen Reid, Editing by Raissa Kasolowsky)

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