IMF: Tariffs on China won’t have much effect
WASHINGTON — China appears able to bear the cost of the Trump administration’s tariffs on imports, with little evidence of an economic slowdown, according to a survey by the International Monetary Fund.
The IMF found that the U.S. tariffs so far on imports from China would shave only about 0.2% from growth, forecasting GDP growth of 6.2% in 2019. The strength of China’s economy and the government’s ability to respond to the tariffs may call into question President Donald Trump’s assertion that China would be hurt by the levies.
Kenneth Kang, a deputy director in the Fund’s Asia and Pacific department, said China’s efforts to provide economic stimulus to offset the impact of 25% tariffs have been successful. He said that if tariffs remain at current levels, no further stimulus would be necessary to keep growth in the targeted range.
Kang spoke at a press conference in Beijing in Wednesday. A transcript was made available Thursday.
“If trade tensions escalate, for example, if U.S. were to impose additional tariffs, it’s true that growth could be significantly affected,” Kang said. “And in this situation some temporary stimulus could be appropriate.”
The administration imposed tariffs of 25% on some $50 billion of China-origin imports in mid-2018, and it increased the pressure with a 10% tariff on an additional $200 billion in imports in September of last year. The U.S. raised the 10% to 25% in midMay in response to alleged backtracking by China in negotiations.