IMF warns Trump trade war could cost global economy US$430 billion
All economies would suffer from further escalation, but the US would find itself ‘as the focus of global retaliation’, the International Monetary Fund said
Rising trade tensions between the United States and the rest of the world could cost the global economy US$430 billion, with America “especially vulnerable” to an escalating tariff war, the International Monetary Fund has warned.
Delivering a sharp rebuke for US President Donald Trump, the Washington-based organisation said that the current threats made by the US and its trading partners risked lowering global growth by as much as 0.5 per cent by 2020, or about US$430 billion in lost GDP worldwide.
Although all economies would suffer from further escalation, the US would find itself “as the focus of global retaliation” with a relatively higher share of its exports taxed in global markets. “It is therefore especially vulnerable,” the fund said.
Trump raised the stakes in his mounting trade dispute with China last week by proposing 10 per cent tariffs on US$200 billion of Chinese goods entering the country. Beijing was quick to warn of retaliation.
Trump also rattled European leaders by labelling the EU one of the greatest “foes” of the US over trade, while leaving behind a trail of political chaos in Britain from his visit last week.