The Strategist

Lagarde: Trade war is the biggest threat to the global economy

09/24/2019 - 10:00

Christine Lagarde, who is preparing to take the post of chairman of the European Central Bank, considers the trade war between the US and China the biggest threat to the global economy.

Adam Tinworth
Adam Tinworth
Lagarde, who has been heading the International Monetary Fund since 2011, and will head the ECB on November 1, said the mutual duties between the United States and China would reduce global economic growth by 0.8% in 2020.

“Those are huge numbers,” Lagarde told CNBC. “It means fewer jobs. Less business. Less investment. It means more uncertainty. It puts pressure on the global economy like a big dark cloud.”

"I think that trade is a threat to trade at the moment; this is the biggest obstacle to the global economy," she added.

"The longer this continues, the greater the uncertainty. And if you are an investor, if you are an enterprise, whether small, medium or large, you will not invest, you will wait. You will sit and wonder where the supply chains will be organized," said Lagarde.

The trade war between the United States and China has been going on for more than a year. During this time, the parties introduced mutual duties worth hundreds of billions of dollars.

At the end of August, the international rating agency Fitch Ratings noted that since mid-2018, 20 countries with the largest GDP have experienced a simultaneous slowdown in economic growth. One of the main reasons for this, according to Fitch experts, was a sharp deterioration in the situation in world trade.

US Treasury Secretary Steven Mnuchin said that he and US Trade Representative Robert Lighthizer will hold trade talks with Chinese Deputy Prime Minister in two weeks.

According to Mnuchin, the negotiators of the two countries have made some progress in easing trade tension during meetings last week.


< >

Thursday, July 11th 2024 - 05:52 Argentina sets to become LNG exporter in 2027