US-China trade war: IMF’s Christine Lagarde warns of ‘self-inflicted wounds’ to global economy
- IMF calculates that the tit-for-tat tariffs will cost US$455 billion in lost output next year – more than the size of South Africa’s economy
- Donald Trump has so far ignored warnings from the IMF and other international organisations about the impact of his trade measures
The global economy is at a “delicate juncture” which will require central banks to maintain stimulus and governments to resolve trade disputes quickly, the International Monetary Fund warned.
“The immediate priority is to resolve the current trade tensions,” IMF chief Christine Lagarde urged in a blog post aimed at the Group of 20 finance ministers and central bankers as they prepare for a meeting in Japan this weekend.
She said the exchange of tariffs between the United States and China would put the brakes on growth in both countries and cut a few points off global growth as well.
“These are self-inflicted wounds that must be avoided,” she said.
“How? By removing the recently implemented trade barriers and by avoiding further barriers in whatever form.”
The G20 finance officials are meeting just weeks after US-China talks collapsed amid accusations of broken promises and an exchange of punishing tariff increases.