Protectionism threatens ‘vintage’ global growth

Bank of International Settlements concern trade war may trigger ‘fresh downturn’

Ayear of “vintage” economic growth could be undone by rising protectionism, the Bank of International Settlements (BIS) said yesterday, as fears of an all-out global trade war ramp up.

The BIS, often described as the central bank of central banks, credited “a decade of extraordinary monetary policy,” for leading the world out of the 2008 financial crisis.

That culminated in 2017 with “a vintage year for growth with low inflation,” the BIS said in its Annual Economic Report, which also warned of possible trouble ahead.

“An escalation of protectionist measures ... could trigger a fresh downturn,” the bank said.

The report was launched days after the European Union slapped tariffs on iconic US products including bourbon, jeans and motorcycles in its opening salvo in a trade war with President Donald Trump.

Brussels imposed the raft of duties on US products worth €2.8 billion (Dh11.9 billion, $3.3 billion) in a tit-for-tat response to Trump’s decision to slap stiff tariffs on European steel and aluminium exports.