Economic growth in the US is expected to have slowed down in the third quarter of this year on account of ongoing trade tensions impacting both consumer spending as well as business confidence. According to a recent Reuters poll, Q3 2019 GDP is expected have grown at 1.6% YoY vs. 2.0% growth seen in Q2 2019.

Higher tariffs are likely to have reduced imports, narrowing the trade deficit, but also impacting overall consumer spending in the process. Meanwhile, domestic spending is also anticipated to have reduced as a result of an overall weakening in the global economy which has been exerting pressure on the US economy as well.

There is a high likelihood that the GDP outlook put out by the Commerce Department could reveal the slowdown in the US economy, although a recession still seems a long way off. In addition to the trade war with China, the US economy is likely to have been impacted by the receding impact of the $1.5 trillion tax cut package that was rolled out in 2018.

Any slowdown in the Q3 GDP will take the economy further from the Trump administration’s target of 3% GDP growth annually. While the US economy managed to grow at 3.1% in Q1 2019, economic growth has continued to slow down as a result of the escalating tariff war with China.