US-China trade war could escalate despite talks on removing tariffs: Raghuram Rajan

'If there is a recession -- even half of the size of the global financial crisis in 2008 -- 40% of corporate debt will be in trouble,' he said.

Published: 08th November 2019 04:50 PM  |   Last Updated: 08th November 2019 05:30 PM   |  A+A-

Raghuram Rajan

Former RBI Governor Raghuram Rajan (File Photo| AP)

By Bloomberg

The U.S.-China trade war could still escalate despite recent discussions on removing imposed tariffs, and the Trump administration may not be able to secure a lasting deal, former Reserve Bank of India Governor Raghuram Rajan said.

“In the last few days there were some discussions of moving down the tariffs in the fights between the U.S. and China, but it’s not the end,” Rajan, who now teaches at Chicago Booth School of Business, said during a speech at a forum in Beijing Friday. “The chances of a comprehensive deal are really quite small.”

A deal good enough to restore confidence in cross-border investment is not likely “in the next year or so, and could even require a new administration in the U.S.,” he added.

Rajan said serious policy mistakes such as the trade conflicts, as well as geopolitical risk could be the trigger for a global recession, other than traditional causes in the past such as monetary tightening or a high leverage ratio in the financial sector.

“If there is a recession -- even half of the size of the global financial crisis in 2008 -- 40% of corporate debt will be in trouble,” he said.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp