U.S. economic growth will slow steadily in coming quarters after touching a four-year high in April-June, according to a Reuters poll of economists, who expect President Donald Trump's trade war to inflict damage.
Boosted in part by $1.5 trillion of tax cuts passed late last year, the U.S. economy expanded at an annualized rate of 4.1 percent in the second quarter, its strongest performance in nearly four years.
But the latest poll of more than 100 economists taken Aug. 13-21 showed they expect the U.S. economy to lose momentum and to end next year growing at less than half that rate.
The U.S. economy was forecast to grow 3 percent in the current quarter and 2.7 percent in the next, a slight upgrade from the previous poll.
But the short-term boost to growth from tax cuts was expected to wane. Economists trimmed their growth projections across most quarters next year leaving the outlook broadly unchanged and vulnerable to the trade conflict with China.
"The trade measures taken by the U.S. so far and the retaliation by foreign governments will probably slow down the economy only marginally," noted Philip Marey, senior U.S. strategist at Rabobank.
"However, that could change in the case of a global trade war in which a range of foreign countries take protectionist measures aimed at the U.S., which is after all the party that is trying to change the status quo."
Nearly two-thirds of 56 economists who answered an extra question said they have considered the impact of Trump's expanding trade war in their U.S. growth predictions. That was a nearly identical proportion to a poll of economists covering the euro zone published on Wednesday.