The US economy is obviously slowing down, and trade policy may become the biggest risk.

　　Since the beginning of this year, under the background of weak global economic growth, the trade situation has brought downward pressure and persistent risks to the American economy, and the American economy has shown an obvious slowdown trend. The Federal Reserve cut interest rates for three times this year, totaling 75 basis points, providing "buffer" and "insurance" for the American economy. The analysis believes that the US economy will still face many challenges next year, and trade policy is the biggest risk, which may bring great uncertainty to the US and even the global economic prospects.

　　The economy maintained expansion, but the growth slowed down.

　　Statistics released by the US Department of Commerce show that the real gross domestic product (GDP) of the United States increased by 3.1%, 2% and 2.1% at an annual rate in the first three quarters of this year respectively. In the fourth quarter, the US economy is expected to maintain moderate growth, but the forecast recently released by the National Association for Business Economics (NABE) shows that the median GDP growth forecast in the fourth quarter of this year is 2.1%, which is lower than the 2.5% in the same period last year. This year, the US economic growth rate may slow down to 2.3%, compared with 2.9% last year. Overall, it is difficult for the US economic growth rate to reach the 3% growth target set by the government.

　　At the same time, data from the US Department of Labor showed that the unemployment rate in November dropped by 0.1 percentage point from the previous month to 3.5%, which was the same as the lowest point in 50 years. In the third quarter of this year, personal consumption, which accounts for about 70% of the US economy, increased by 3.2%, which was lower than the increase of 4.6% in the previous quarter. Non-residential fixed assets investment, which reflects the investment situation of enterprises, fell by 2.3% compared with the previous quarter, and fell for two consecutive quarters, dragging down the economic growth of the quarter by 0.31 percentage points. In addition, net exports in the third quarter dragged down economic growth by 0.14 percentage points.

　　The Federal Reserve issued a statement on December 11th, saying that information since October showed that the US job market remained strong, economic activities expanded moderately, and the unemployment rate remained at a low level. Despite the strong growth of household consumption, fixed investment and exports of enterprises are still weak. In the last 12 months, the overall inflation rate and the core inflation rate excluding food and energy prices in the United States were both below 2%.

　　According to the data released by the American Institute of Supply Management on December 2, the purchasing managers’ index (PMI) of American manufacturing industry fell by 0.2 to 48.1 in November, shrinking for four consecutive months. The manufacturing industry continues to shrink, exacerbating concerns that the economic growth rate of the United States may slow down significantly in the fourth quarter of this year. At present, the manufacturing industry in the United States has fallen into a moderate recession, and there is little possibility of recovery in the short term. The weak manufacturing industry will continue to drag down employment growth and capital expenditure in the coming months.

　　Fed cuts interest rates three times to resist risks.

　　Affected by the global economic slowdown, tight trade situation and multiple uncertainties, the Fed’s interest rate policy has taken a "big turn" this year. After the last interest rate hike in December 2018, the Federal Reserve suspended interest rate hikes in January this year, and cut interest rates for three consecutive times in July, September and October, with a rate cut of 75 basis points.

　　On December 11th, the Federal Reserve ended its last monetary policy meeting this year, announcing that the target range of the federal funds rate would remain unchanged at 1.5% to 1.75%, ending the "three consecutive declines" in interest rates since July, and releasing a signal to the outside world that it would "stay put" in the future. Federal Reserve Chairman Powell stressed that there is no predetermined path for interest rate policy, and if there is a "significant change" in the economic outlook, the Fed will respond. Powell also said that the US economy faced a series of major challenges in the past year. In order to provide "buffer" and "insurance" for the US economy, the Federal Reserve adopted the interest rate reduction strategy.

　　The data shows that as of October 31, the size of US Treasury bonds exceeded $23 trillion for the first time. At the same time, in fiscal year 2019, the fiscal deficit of the US federal government increased by about 26% year-on-year to about 984.4 billion US dollars, the highest level since 2012, and the proportion of deficit in GDP rose from 3.8% in the previous fiscal year to 4.6%. The Congressional Budget Office estimates that the average annual federal fiscal deficit from fiscal year 2020 to fiscal year 2029 will be $1.2 trillion, which will be between 4.4% and 4.8% of GDP, higher than the average of 2.9% in the past 50 years. The severe fiscal deficit of the federal government and the increasing debt burden will limit the ability of Congress and the government to cope with the potential economic recession.

　　In the Financial Stability Report released last month, the Federal Reserve pointed out that the debt burden of American enterprises is also at a historical high, and the growth rate of corporate debt still exceeds the economic growth rate. Low interest rates and low credit costs make investors tend to take greater risks, which may increase the fragility of financial markets.

　　The International Monetary Fund (IMF) pointed out in its latest World Economic Outlook Report in October this year that "the global economy has fallen into a synchronized slowdown." The IMF predicts that the world economy will grow by only 3% this year, the lowest level since the international financial crisis in 2008. Among them, the economic growth rate of developed economies will slow down to 1.7%, and the growth rate of emerging markets and developing economies will slow down to 3.9%. The sharp slowdown in manufacturing and global trade has become the most remarkable feature of the world economy in the past year.

　　Trade policy becomes the biggest risk.

　　At present, the uncertainty related to trade has had a negative effect on investment. The National Association of Business Economics believes that trade policy will be the biggest risk facing the American economy.

　　According to data from the US Department of Commerce, the added value of US manufacturing accounted for 11% of the US real GDP in the second quarter of this year, dropping to a 72-year low. According to Bloomberg News, the United States imposed tariffs on goods from major trading partners, which was an important reason why the American manufacturing industry fell into recession earlier this year. The protectionist policies in the United States have disrupted the supply chain of enterprises, hindered enterprise investment and slowed down recruitment.

　　The national economic situation survey report released by the Federal Reserve at the end of November shows that the cost of American retailers has increased due to the increase in tariffs. Overall, American companies expect the price level to continue to rise. According to the analysis of the National Retail Federation of the United States, tariffs and the uncertainty they bring will bring "headwinds" to small and medium-sized enterprises, especially to small and medium-sized independent retailers. Imposing new tariffs will drag down the US economic development and push up the unemployment rate.

　　On December 19th, the House of Representatives of the United States Congress approved the revised US-Mexico-Canada Agreement by a vote of 385 votes in favor and 41 votes against, which is expected to be passed by the Senate next year. However, when the US-Mexico-Canada agreement came into effect, Trump’s trade vision turned to the EU. US Trade Representative Robert Wright Heze recently said that changing the trade situation between the United States and Europe will be one of the priorities of the Trump administration in 2020, and is currently considering imposing tariffs on EU products exported to the United States.

　　If the trade friction between Europe and the United States escalates, it will impact the bilateral trade with a scale close to 1.3 trillion US dollars. The persistent trade tension is also the main factor affecting the world economy. The Organization for Economic Cooperation and Development warned that the trade conflict is damaging the manufacturing industry, destroying the global value chain and causing serious uncertainty. Not long ago, the WTO drastically lowered the growth forecast of global merchandise trade in 2019 to 1.2%, far lower than the growth forecast of 2.6% in April.