World Bulletin / News Desk
The US economy is "especially vulnerable" to damage from the burgeoning global trade war, which could shave hundreds of billions of dollars off global GDP, IMF chief Christine Lagarde said Wednesday.
The International Monetary Fund on Monday called the increasing trade restrictions "the greatest near-term threat" to the world economy.
Through 2019, the IMF estimated the world economy should grow by 3.9 percent but "this may be the high-water mark," Lagarde said in a blog post.
"Already growth is beginning to slow in the Euro Area, Japan, and the United Kingdom," she said, adding that recent US fiscal stimulus would soon wane.
IMF economists prepared a report for the G20 ministers with simulations showing the worst-case scenario, where all the tariffs threats and retaliation are implemented, and business confidence erodes, could cut a half point or $430 billion off global GDP in 2020.
"While all countries will ultimately be worse off in a trade conflict, the US economy is especially vulnerable because so much of its global trade will be subject to retaliatory measures," said Lagarde.
Because US President Donald Trump launched the current trade war, retaliation and negative impact will be focused on the US economy, leaving other regions to continue trading amongst themselves.
Trump, who said trade wars were "good and easy to win," imposed steep tariffs on all steel and aluminum imports, angering key allies and prompting swift retaliation.
He also hit China with 25 percent duties on $34 billion in goods, with another $16 billion on the way. And $200 billion more could be targeted as soon as September.Güncelleme Tarihi: 18 Temmuz 2018, 15:58