The investment firm believe the trade war could continue past a 2020 US general election and Goldman Sachs went on to say it has “increased it’s estimate of the growth impact of the trade war”.

“We expect tariffs targeting the remaining $300billion of US imports from China to go into effect,“ the bank said in a mail sent to clients.

Recent events have seen the trade war escalate. Trump has imposed a 10% tariff on a further $300bln worth of Chinese goods and China retaliated by trying to halt purchases on US agricultural products. The US has also made accusations against China manipulating its currency.

Goldman Sachs said it had lowered its fourth-quarter US growth forecast by 20 basis points to 1.8% on a larger than expected impact from the developments in the trade war. The situation does have the potential to cause US dollar weakness, but Brexit seems to outweigh the current situation in the US.

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