Blackstone’s Schwarzman Doesn’t See Recession Risk in Trade War
Will the trade war between the U.S. and China lead to a recession next year? Stephen Schwarzman doesn’t think so.
“It’s not that big a game to throw us into recession,” the Blackstone chairman and CEO told CNN. For one thing, he noted, trade with China doesn’t constitute that big a share of U.S. GDP.
“We have an economy that’s $20 trillion, and we sell China about $100 billion worth of goods,” Schwarzman said. “So it’s a very small percentage that we sell them.”
That being said, Schwarzman acknowledged that the two countries’ protectionist stance is having a disruptive effect, although more so on the other side of the tariff divide. “We’re seeing U.S. companies making plans to leave China,” he said. “You’ve got all kinds of bifurcation going on, which if it continues will have more and more negative consequences, particularly on China.”
The asset management giant that Schwarzman co-founded was an early adapter in terms of doing business in China, and until last year the country’s sovereign wealth fund, China Investment Corp., was a sizable investor in Blackstone Group. Schwarzman told CNN that a meeting between President Trump and Chinese President Xi at the upcoming G20 summit could help reset the relationship.
“One would hope that both countries can find a way to work together,” he said, noting that the economies of both countries will suffer if progress isn’t made.
CNN noted that Schwarzman’s view of a U.S. recessionary risk was at odds with the views of other investment professionals and economists. A survey published earlier this month by the National Association for Business Economics reported that the risk of a recession happening soon remains low but will “rise rapidly” in 2020.
The economists’ primary worry: protectionist trade policy.
And the New York Times reported that the trade war was chilling business confidence globally. “With these trade tensions, the global economy, in a sense, is getting close to a crossroads,” said Ayhan Kose, the director of the World Bank’s Prospects Group.
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
Connect CRE News
Your source for daily news covering CRE transactions and trends. Stay informed on national, regional and property sector news that matters to your business.
Connect Events
Whether digital or in-person, Connect Events set the stage to bring together relevant content with CRE’s most active players to engage, influence and inform.
Connect CREative
A full-service marketing agency dedicated to CRE clients. Combining our CRE background with our team’s business, marketing, communications, technology, to develop and execute comprehensive strategies to create, build, and and grow successful brands.