IMF’s Christine Lagarde warns of worse trade hit to global economy | World News - Hindustan Times
close_game
close_game

IMF’s Christine Lagarde warns of worse trade hit to global economy

Washington | ByPress Trust of India
Nov 29, 2018 12:11 AM IST

Investment would be reduced further if President Donald Trump follows through on his threat to impose steep tariffs on auto imports from all countries except Canada and Mexico, which would result in retaliation from trading partners on US exports.

The impact of escalating trade tensions on global growth are worse than feared just one month ago, and threatened US auto tariffs could cut a large chunk out of the world economy, the IMF said Wednesday. Just last month, the International Monetary Fund warned of the dangers of the trade frictions -- notably between the United States and China, which have exchanged tariffs on hundreds of billions in products.

In this file photo taken on October 4, 2018 International Monetary Fund (IMF) managing director Christine Lagarde speaks during a press conference in Tokyo.(AFP)
In this file photo taken on October 4, 2018 International Monetary Fund (IMF) managing director Christine Lagarde speaks during a press conference in Tokyo.(AFP)

But IMF chief Christine Lagarde said those headwinds “could have slowed momentum even more than we had expected.” In a report for the Group of 20 leaders meeting in Buenos Aires, the IMF said auto tariffs, if imposed, could cut three fourths of a per cent off the global economy.

Hindustan Times - your fastest source for breaking news! Read now.

Emerging market economies, especially China and the euro area, are already seeing their economies slow, while a “no-deal Brexit could further dent confidence,” Lagarde said in a blog post that accompanied the report.

The report said trade and Brexit risks “remain acute,” and the uncertainty itself creates difficulties for companies by tightening credit conditions.

Investment would be reduced further if President Donald Trump follows through on his threat to impose steep tariffs on auto imports from all countries except Canada and Mexico, which would result in retaliation from trading partners on US exports.

An IMF calculation “suggests that the resulting short-term losses could lower global GDP by about 3/4 per cent.” Trump has threatened to impose tariffs on autos as part of his aggressive trade strategy focused on preserving US jobs.

He also has hit half of US imports from China with steep punitive tariffs, which has drawn retaliation from Beijing. But he is due to meet in Buenos Aires with Chinese leader Xi Jinping, and a White House official said Tuesday that Trump sees a “good possibility” for a deal to defuse the trade frictions.

Lagarde warned the G20 gathering in Argentina that “the global economy faces a critical juncture.” “We have had a good stretch of solid growth by historical standards, but now we are facing a period where significant risks are materialising and darker clouds are looming.” She again stressed that “rising trade barriers are ultimately self-defeating for all involved. Thus, it is imperative that all countries steer clear of new trade barriers, while reversing recent tariffs.”

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away! - Login Now!

Get Latest World News along with Latest News from India at Hindustan Times.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On