The International Monetary Fund has warned about the consequences of a recent wave of trade war waged by the US on global economic growth.
The warning by the IMF Managing Director Christine Lagarde came one day after US President Donald Trump threatened to escalate a dispute with China over economic issues.
Lagarde said she would present the G20 finance ministers and central bank governors meeting in Buenos Aires during the weekend with a report detailing the impacts of the restrictions already announced on global trade.
"It certainly indicates the impact that it could have on GDP (gross domestic product), which in the worst case scenario under current measures...is in the range of 0.5 pct of GDP on a global basis," Lagarde said.
Earlier, the top US Treasury Secretary Steven Mnuchin said there was no "macroeconomic" effect yet on the world's largest economy.
Trump expressed readiness to intensify his trade war with China by imposing tariffs on all $500 billion of imports from the world's second largest economy.
The US president said that Washington is “down a tremendous amount” in terms of trade with Beijing, reiterating his views that China's trade surplus with the US amounts to “unfair” trading practices.
In early July, Washington imposed 25 percent duties on $34 billion of imports from China in the first in a possible series of increases that Trump says could affect up to $550 billion of Chinese goods. China announced that its retaliatory tariffs had also taken effect on $34 billion of US goods that included soybeans, pork and electric vehicles.
The US administration recently announced that it would impose 10 percent tariffs on an extra $200 billion worth of Chinese goods after China retaliated. Beijing, in response, blasted American unilateralism and filed a complaint with the World Trade Organization (WTO) against the new US-proposed tariffs.
Beijing files a complaint with the World Trade Organization against the new US-proposed tariffs on Chinese goods.
China also warned the US that it would have no choice but to take “the necessary countermeasures” against Washington.
Trump has also accused Beijing of intellectual property theft, obstructing US businesses, and being responsible for America’s 375-billion-dollar trade deficit with China.
The Trump administration has also imposed tariffs on steel and aluminum imports from China and other North American and European countries in an effort to protect US producers.
The US tariffs are just the first step in a long strategy meant to shift the US manufacturing supply chain away from China, which is increasingly seen as a geopolitical rival.
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