China Shifts Gears to Support Economic Growth Amid Trade Conflict With U.S.

referring to BEIJING—Fall-offs in factory output and investment in buildings, machinery and such are weighing on China's growth, complicating Beijing's task in managing the world's second-largest economy amid a trade conflict with the U.S. While that rate is within Chinese leaders' comfort zone, some economists said more troubling are the drop-offs in business activity and domestic demand. Industrial output rose 6% in June from a year earlier, markedly down from a pace of 6.8% in May. The slack is partly due to a government campaign against debt that has made businesses skittish about spending. More such tweaks are likely, Mr. Hu said, unless growth veers below the 6.5% government-set growth target, necessitating more forceful remedies.

Europe Sees Trade Tensions With U.S. Eating Into Economic Growth

"An unfavorable external environment, such as growing trade tensions with the U.S., can dampen confidence and take a toll on economic expansion," said Valdis Dombrovskis, vice president for the euro at the European Commission, the EU's executive. Still, the ECB has put off interest-rate increases until after summer 2019 on the back of rising trade tensions and weak underlying inflation. Economic confidence didn't bounce back after eurozone growth slowed in the first three months of the year, which could be linked to trade tensions, Mr. Moscovici said. Mr. Trump unveiled this week additional tariffs on $200 billion of Chinese imports after an initial round of duties on $34 billion of goods from China. "A further escalation of protectionist measures is a clear downside risk," Mr. Moscovici said.

U.S. Economic Strength Gives Trump Leeway in Trade Fight With China

as mentioned in WASHINGTON—The U.S. economy's strength is emboldening the Trump administration to play hardball in its trade offensive against China. Tariffs tend to be economic downers with an impact like sales taxes, which push up costs for consumers and businesses and slow growth. But so far it is tough to argue that the spat with China is having a broad macroeconomic impact. Economic...

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