Nobody wins in a tit-for-tat trade war, warns IMF chief

PARIS: No one emerges victorious from a trade war, said International Monetary Fund (IMF) chief Christine Lagarde yesterday, warning that the economic impact of United States import tariffs would be serious if other countries respond with their own barriers.

“The macro-economic impact would be serious, not only if the US took action, but especially if other countries were to retaliate, notably those who would be most affected, such as Canada, Europe, and Germany in particular,” said Lagarde on French radio RTL.

Trump’s comments have sparked cries of foul play from US trading partners and warnings from US businesses of the potential for a tit-for-tat trade war that could hurt the US economy.

“In a so-called trade war, driven by reciprocal increases of import tariffs, nobody wins, one generally finds losers on both sides.”

Meanwhile, in Geneva, China yesterday led a group of 18 World Trade Organisation (WTO) members that urged Trump to scrap his planned tariffs.

The pleas from a broad coalition of members, including the European Union, Japan, Canada and Russia, came at the WTO’s General Council meeting, according to a trade official.

The Chinese representative said Trump’s intention to justify the tariffs on national security grounds would pose a systemic threat to the rules-based global trading system safeguarded by the 164-member WTO.