Enduring trade tensions and weakening economies worldwide are causing a significant decline in global commerce, the World Trade Organization warned on Tuesday. The instability led the Geneva-based organization to cut its forecast for trade volume growth to just 1.2 percent in 2019, an over 50 percent drop from an earlier estimate.
"Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards," said Roberto Azevêdo, the WTO's director-general.
The WTO took particular issue with trade policies dominated by punitive tariffs, which its report said can "produce a destructive cycle of recrimination." Financial volatility and looming geopolitical strife, along with escalating trade wars, could also trigger an accelerated downturn, the report said.
"Resolving trade disagreements would allow WTO members to avoid such costs," Azevêdo added. "The multilateral trading system remains the most important global forum for settling differences and providing solutions for the challenges of the 21st century global economy."
Fitch Ratings, a leading London-based financial information firm, also lowered its economic outlook this week, citing similar trade concerns as the WTO. For both 2019 and 2020, Fitch lowered its global GDP growth forecasts by 2 percent, dropping the estimates down to 2.6 percent and 2.5 percent, respectively. The WTO also lowered its trade growth forecast for 2020 from 3 percent to 2.7 percent.
"There can be few precedents since the 1930s of global growth prospects being affected so significantly by trade policy disruptions," said Brian Coulton, Fitch's chief economist.
The lowered guidance comes as governments and economists around the world are increasingly cautioning of an economic slowdown.
In the U.S., consumer spending — one of the primary drivers of economic growth — fell in August to just 0.1 percent growth, a sharp decline from the 0.5 percent growth in July, according to the Commerce Department's Bureau of Economic Analysis. The U.S. Federal Reserve also cut interest rates twice in recent months to spur growth and sustain expansion.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
