IMF chief warns against harming trade, investment
CHRISTINE LAGARDE URGES US AND CHINA TO RESOLVE THEIR DISPUTES THROUGH DIALOGUE
Governments must take care, even when there are disagreements, to avoid harming trade and investment which have been key drivers of the global economic recovery, IMF chief Christine Lagarde said yesterday.
Amid concerns that escalating trade tensions between the United States and China could reverberate through the world economy, Lagarde urged the sides to resolve their disputes through dialogue. “Investment and trade are two key engines that are finally picking up. We don’t want to damage that,” she said at a press briefing to open the spring meetings of the International Monetary Fund and World Bank.
Lagarde said finance officials from member governments this week during the Washington meetings would discuss the trade disputes that she said threatened to hurt economies that are interconnected by global supply chains.
Business confidence
While she acknowledged “the actual impact of growth is not very substantial when you measure in terms of GDP,” she said the dispute could erode business confidence very quickly because of the uncertainty, which would make businesses “reluctant to invest.”
In its World Economic Outlook this week, the IMF listed the trade tensions as a key downside risk to the global recovery and warned that it could harm the poorest the most through rising prices. US President Donald Trump last month imposed steep tariffs on steel and aluminium imports and threatened to impose more on tens of billions of dollars in Chinese imports, prompting Beijing to slap duties on US goods like sorghum and threaten even more sensitive US exports like soy beans.
International cooperation “has served us so well and delivered more progress for more people than at any time in history,” but is now being questioned, Lagarde said.