red warning flag on a stormy beach
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The U.S. president’s Twitter habits increasingly represent a downside risk to the U.S. economy, suggests RBC Economics in a new report.

The ongoing trade war between the U.S. and China escalated this week, with China announcing another round of tariff increases, retaliating for planned U.S. hikes, which prompted “a late-week Twitter tirade from U.S. president Trump,” RBC reported.

The tariffs planned by China “looked relatively measured,” RBC said. “A larger concern is the increasingly unpredictable rhetoric coming from the presidential Twitter feed that appears set to send US-China trade tensions right back to a full boil.”

With Trump promising yet further U.S. retaliation against China, RBC said, “Nobody wins from a further escalation in tensions, and we continue to think that U.S. economic vulnerability may be larger than China’s.”

The report noted that, while the U.S. president doesn’t have the authority to order American companies to stop trading with China, as Trump is threatening, “Congress has to-date shown little appetite to push back against unilateral tariff imposition by the Administration.”

“Uncertainty about the economic backdrop clearly looks to be weighing on business sentiment and spending – and the international trade backdrop looks as uncertain as ever,” the report said.

Canada will also likely feel the effects of these ongoing trade concerns, RBC noted, saying that the tensions will “continue to take the shine off of what otherwise has looked like relatively solid economic data.”