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Renewed trade tensions between the world’s two biggest economies, China and the US, are a threat to the global economy, head of the International Monetary Fund (IMF) Christine Lagarde says.
“For us at the IMF it’s imperative that trade tensions are resolved in a way satisfying for everyone because clearly tensions between the United States and China are the threat to the global economy,” Lagarde told journalists on the sidelines of a conference at France’s Finance Ministry.
The IMF chief stressed that the latest “rumors and tweets” are not conducive to any agreement. According to Lagarde, it’s vital for the parties to eliminate the current uncertainty over the issue, and move to “adoption of a clear legal and regulatory framework,” allowing the affected corporations to keep doing business.
The warning comes shortly after the ongoing spat between Beijing and Washington entered a new stage as the US President Donald Trump threatened further tariffs on Chinese imports, citing current stagnation in talks over mutual trade. The measure will include increasing import levies on $200 billion of Chinese goods from 10 to 25 percent. Trump’s comment came ahead of an official visit by a Chinese delegation to Washington scheduled for Wednesday.
The extensive trade clash between the economic superpowers started in early 2018 after the Trump administration raised tariffs on imports from China and a number of other countries in a bid to address America’s growing trade deficit. So far, the US introduced tariffs on nearly $250 billion of Chinese imports. Beijing retaliated with levies on $110 billion of US goods.
Earlier this year, experts from the Washington-based agency cautioned that US steps towards building barriers for correcting trade imbalances would not be effective. Back then, the IMF warned that tariffs imposed on imports from one partner would be eliminated by changes in the trade balances with other ones.