Most notably, the trade friction between the United States and China involves significant issues beyond mere economic problems -such as the competition in advanced technologies and national security -- and it may be difficult to resolve these issues fundamentally in a short period of time. The negotiation between the two countries is still underway, so we should not be too pessimistic.
If the trade friction becomes prolonged or persistent, however, downward pressure on the global economy may heighten not only through the direct effects of the tariff hikes but also  4  deterioration in firms' fixed investment stance and financial market sentiment.3 In Europe, uncertainties over political developments including negotiations on the United Kingdom's exit from the European Union (EU) remain high, and in the Middle East, for example, geopolitical risks warrant careful attention.