Sunday, June 17, 2018

IMF Critics Import Tariff President Donald Trump As Global Trade Risk

The IMF in its latest report released in Washington on Thursday (14/6) estimates that President Donald Trump's new tariff policy could undermine the global trading system and the US economy.

The report warned that sanctions on import duties imposed by the US on some countries could jeopardize the current world economic recovery by provoking retaliatory measures that eventually disrupt global supply chains.

IMF Director Christine Lagarde (photo article) urges other countries such as Canada and Germany to consider also the risk of retaliation that will adversely affect the economy.

The IMF report concludes, although the direct economic impact of tariff wars is difficult to quantify right now, large-scale commercial conflicts can undermine trust and cause businesses to withhold investment.

US is required to work constructively
Christine Lagard encouraged the United States to "work constructively" with its trading partners to resolve trade disputes and refrain from applying import tariff sanctions.

The IMF report says the adoption of import tariffs is likely to take the world away from "an open, just and rule-based trading system, with adverse impact on the US economy and for trading partners."

The IMF also expressed no optimism about the development of the US economy in the long term. The report says tax cuts will indeed help growth boost growth this year and next year, but this growth will decline from 2020 to a much lower level than White House calculations.

The Trump Government is confident of its economic agenda
The IMF projected US economic growth to reach 2.9 percent this year and 2.7 percent next year. But growth will slow and decline to 1.4 percent by 2023.

The Trump Administration responds quickly to the IMF report and defends its economic agenda. The US Treasury said their estimates differ "significantly" with the IMF.

The Ministry of Finance affirmed its confidence in the current government policy. Tax reforms and increased productivity will lead to more sustainable economic growth, it said.

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