Since the beginning of this year, against the background of weak global economic growth, the trade situation has brought downward pressure and sustained risks to the us economy. The us economy has shown a significant slowdown. The us economy still faces many challenges next year, with trade policy the biggest risk, according to the analysis, which could bring great uncertainty to the us and global economic outlook.

The economy continued to expand but growth slowed

Commerce Department statistics show real gross domestic product grew at an annual rate of 3.1 per cent, 2 per cent and 2.1 per cent in the first three quarters of the year. The us economy is expected to keep growing at a moderate pace in the fourth quarter, but the national association for business economics (NABE) recently released a forecast for GDP growth of 2.1 per cent, down from 2.5 per cent in the same period last year. The us economy may slow to 2.3 per cent growth this year, compared with 2.9 per cent last year, with overall growth struggling to meet the government's 3 per cent target.

Meanwhile, labor department data showed the unemployment rate fell 0.1 percentage point from the previous month to 3.5% in November, unchanged from a 50-year low. Personal consumption, which accounts for about 70 per cent of the us economy, grew by 3.2 per cent in the third quarter, down from 4.6 per cent in the previous quarter. Non-residential fixed-asset investment, a proxy for business investment, fell 2.3 per cent from the previous quarter, the second consecutive quarter-on-quarter decline, dragging 0.31 percentage point off growth. In addition, net exports subtracted 0.14 percentage point from growth in the third quarter.

The fed said in a statement December 11 that information since October suggests the U.S. job market remains strong, economic activity is expanding modestly and the unemployment rate remains low. Despite strong growth in household consumption, business fixed investment and exports remained weak. Both headline and core inflation, which excludes food and energy prices, have been below 2 per cent over the past 12 months.

On December 2nd the institute for supply management said its purchasing managers' index (PMI) for the manufacturing sector fell 0.2 points in November from the previous month to 48.1, the fourth straight month of contraction. Manufacturing has continued to shrink, adding to concerns that the us economy may slow sharply in the fourth quarter of this year. With the U.S. manufacturing sector already in a mild recession and little prospect of a near-term recovery, weakness in the sector will continue to weigh on job growth and capital spending in the coming months.

The federal reserve has cut interest rates three times to ward off risks

The us federal reserve has made a u-turn on interest rate policy this year because of the global economic slowdown, trade tensions and multiple uncertainties. After the last rate hike in December 2018, the fed suspended interest rate hikes in January and cut rates three times in a row by 75 basis points in July, September and October.

The federal reserve ended its last monetary policy meeting of the year on December 11, leaving its target range for the federal funds rate unchanged at 1.5 percent to 1.75 percent, ending a "triple series" of rate cuts since July and signaling that it would "hold fire" in the future. Fed chairman colin Powell stressed there was no set path for interest rate policy and the fed would respond if there was a "significant change" in the economic outlook. Powell also said the fed has cut interest rates in an effort to "cushion" and "insure" the U.S. economy against a series of major challenges over the past year.

As of Oct. 31, the national debt exceeded $23 trillion for the first time, according to the data. Meanwhile, the us federal deficit rose about 26 per cent year on year to about $984.4bn in fiscal 2019, the highest since 2012, and rose to 4.6 per cent of GDP from 3.8 per cent in the previous fiscal year. The congressional budget office estimates that the average annual federal deficit between fiscal 2020 and 2029 will be $1.2 trillion, or between 4.4% and 4.8% of GDP, higher than the average of 2.9% over the past 50 years. The severe federal deficit and rising debt burden will limit the ability of congress and the administration to cope with a potential recession.

The federal reserve noted in its financial stability report last month that U.S. corporate debt burdens are also at historically high levels, and that corporate debt is still growing faster than the economy. Low interest rates and cheap credit make investors more willing to take on more risk, which could increase the fragility of financial markets.

The international monetary fund noted in its latest world economic outlook in October that "the global economy is in the grip of a synchronised slowdown." The IMF expects the world economy to grow at just 3% this year, its slowest pace since the 2008 global financial crisis. Among them, growth in advanced economies will slow to 1.7 per cent and in emerging markets and developing economies to 3.9 per cent. A sharp slowdown in manufacturing and global trade has been the most striking feature of the world economy over the past year.

Trade policy poses the greatest risk

At present, trade-related uncertainty has had a negative effect on investment. The national association for business economics sees trade policy as the biggest risk to the U.S. economy.

In the second quarter of this year, manufacturing's share of real gross domestic product fell to a 72-year low of 11 per cent, according to Commerce Department data. Tariffs on goods from major U.S. trading partners were a big reason U.S. manufacturing fell into recession earlier this year, bloomberg reported. Protectionist us policies disrupt corporate supply chains, hamper business investment and slow hiring.

The federal reserve's survey of national economic conditions, released at the end of November, showed higher costs for us retailers as a result of higher tariffs. Overall, U.S. companies expect price levels to continue to rise. The NRF analysis said the tariffs and the uncertainty they create will create "headwinds" for small and medium-sized businesses, with small and medium-sized independent retailers hit hardest. The new tariffs will drag down the U.S. economy and push up unemployment.

The U.S. house of representatives voted 385 to 41 on December 19 to approve the revised u.s.-mexico-canada agreement, which the senate is expected to pass next year. But with significant progress being made in bringing the us-mexico deal into effect, Mr Trump's trade sights are turning to the European Union. Robert lighthizer, the us trade representative, said recently that changing trade between the us and Europe would be one of the trump administration's priorities for 2020 and that it was considering imposing tariffs on eu exports to the us.

Trade frictions between Europe and the us, if they escalate, could hit bilateral trade worth nearly $1.3tn. Continuing trade tensions are also a major factor affecting the world economy, with the organisation for economic co-operation and development warning that trade conflicts are damaging manufacturing, undermining global value chains and creating serious uncertainty. The wto recently slashed its forecast for global merchandise trade growth in 2019 to 1.2 per cent, down from 2.6 per cent in April.