Top Miner Sees U.S.-China Trade Spat Limiting Global Growth – by David Stringer (Bloomberg News – september 18, 2018)

Rising U.S.-China trade tensions threaten to curb consumer purchasing power, crimp productivity growth and limit global economic expansion, according to the world’s biggest mining company.

The confrontation between the world’s top two economies, “along with an increasingly unpredictable policy formation process” in some nations, serves to reduce consumer confidence and business certainty, BHP Billiton Ltd. said Tuesday in its annual report. Protectionist policies and political uncertainty lower the achievable ceiling for global economic growth, it said.

Melbourne-based BHP released the report before the Trump administration’s decision to impose a 10 percent tariff on about $200 billion of Chinese goods next week and to more than double the rate in 2019.

Underlying demand conditions in China remain reasonably robust, and the nation’s response to escalating trade tensions will likely be to lift infrastructure spending, a move with “potential to be quite commodity intensive and spur growth,” Olivia Markham, portfolio manager at BlackRock Inc.’s World Mining Trust, which holds BHP shares, told Bloomberg Television in an interview Tuesday.

BHP, a supplier of materials including iron ore, oil and copper, has a more positive longer-term outlook, with population growth and rising living standards expected to generate demand for energy, metals and fertilizers for decades.

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