For the first time in four years, the US economy soared to great heights in the second quarter of 2018. The Trump administration couldn't be happier with this financial report but economists are seeing some unwanted scenarios that could take place in the world's largest economy.
According to recent reports, the Gross Domestic Product (GDP) of the US increased at an annual rate of 4.1 percent - the fastest rate registered by the country since 2014, and reportedly the strongest when compared to other industrialized nations.
Factors like "robust consumer spending, solid business investment, surging exports and increased government outlays" attributed to the country's GDP growth, as indicated in this report.
Moreover, the nation's economy was further bolstered in part with the tax cuts imposed by Trump and his allies in the GOP earlier this year. The consumers were given more money to spend and coupled with the decreasing unemployment rate, the situation couldn't be more favorable for America.
"We'll take anything with a four in front," the POTUS was quoted as saying during an event in Iowa on Thursday.
This highly accelerated growth rate offers the White House the much-needed breathing room after the sweeping tax cuts in December 2017.
Despite these recent developments, some economists are quite pessimistic that the US could maintain this performance at a yearly rate, the LA Times said.
One of the largest reasons accounting for this impending plummet is Washington's trade spat with China.
Between January and June, the Commerce Department saw a mind-blowing rate of 13.3 percent on exports of US products. This was, however, credited to the escalating US-China trade war which reportedly was instigated by Trump's protectionist policies.
It turns out that the US business sector has never felt a much greater need to dispose of their products long before other nations could begin enforcing steep levies on them.
In a previous report, the US Meat Export Federation admitted that the new tariff China slapped on pig and pig products placed the country's meat industry in a very compromising situation.
China is one of the biggest exporters of pork products from North America.
"This is not amazing," Mark Zandi, Moody's Analytics' chief economist said.
According to the expert, "It doesn't take a genius to figure out how to juice up growth: you borrow money and cut everyone a check."
On the other side of the coin, Treasury Secretary Steven Mnuchin believes that the trend will continue for the years to come.
"...I think we're well on this path for several years, so I don't think this is a one- or two-year phenomenon," the White House official said.
