- IMF Chief Warns Trade War Could Rip Apart Global Economy
Christine Lagarde warned on Wednesday that the rules that underpin global trade were “in danger of being torn apart” by protectionist forces in what the IMF managing director said would be “an inexcusable, collective policy failure”.
Speaking at the University of Hong Kong, Lagarde warned of the gathering threats of a trade war and the rapid rise in public and private debt around the world. But she stresses that the global economy continued to grow strongly and remained optimistic about the remainder of 2018 and 2019.
Tit-for-tat tariffs announced by the US and China have sparked fears of a damaging trade war between the world’s two largest economies, according to Financial Times.
“The multilateral trade system has transformed our world over the past generation. But that system of rules and shared responsibility is now in danger of being torn apart. This would be an inexcusable, collective policy failure,” she warned.
Her concerns came in the week before finance ministers from around the world gather in Washington to discuss what the IMF chief said were “darker clouds looming” on the horizon.
Let us redouble our efforts to reduce trade barriers and resolve disagreements without using exceptional measures
Lagarde criticised the thinking of Donald Trump’s administration, while also directing her ire at Germany’s trade imbalances and the lack of proper protection of intellectual property and inefficient state subsidies in China.
Tariffs “not only lead to more expensive products and more limited choices, but they also prevent trade from playing its essential role in boosting productivity and spreading new technologies” Ms Lagarde said, as she called on countries to “steer clear of protectionism in all its forms”.
