Germany's Scope Warns of US Credit Negative Outlook

In a recent report, Germany-based credit rating agency Scope highlighted the potential for the United States to face a credit negative outlook if the ongoing trade war undermines global trust in the dollar. Alvise Lennkh-Yunus, Scope's head, emphasized the US's vulnerability as the epicenter of this policy shift.

Three Potential Scenarios Outlined

Lennkh-Yunus outlined three possible outcomes of the trade war. The first scenario involves light tariff implementation, which could lead to investment uncertainty, credit risk, and a technical recession in the US. The most severe scenario, characterized by permanent duties, threatens a multi-year recession for Americans and poses a risk to global financial stability.