Paris [France]: Fresh trade tensions between the United States and China are a “threat to the world economy,” said International Monetary Fund (IMF) Managing Director (MD) Christine Lagarde on Tuesday.
Speaking at the sidelines of a conference at Finance Ministry, Lagarde said: “For us at the IMF, it’s imperative that trade tensions are resolved in a way satisfying everyone because clearly, tensions between the United States and China are the threat to the global economy.”
US President Donald Trump on Sunday had warned that he would lift tariffs on $200 billion of Chinese goods to 25 per cent from the current threshold at 10 per cent, as well as tax nearly all of the Chinese exports in the United States.
In a pair of tweets, the US President wrote: “For 10 months, China has been paying tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday.”
“325 Billion dollars of additional goods sent to us by China remain untaxed but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” he added.
The IMF chief stressed that the latest “rumors and tweets” made the agreement between the two countries less likely, reported Russia Today.
The renewed threats by the US come ahead of a critical week of negotiations between the two countries to end a longstanding trade war.
Following this, Trump on Tuesday alleged that the US loses US $500 billion dollars in trade with China every year, adding that they were not “going to be doing that anymore.”
The US had earlier abstained from enforcing an increase in tariffs on Chinese imports in March, citing the progress made in trade negotiations — an approach which seems to be changing in present times.
Both Washington and Beijing had agreed to hold negotiations to resolve the trade war on the sidelines of the G20 summit in Argentina last year. Honouring this, the two countries have since held multiple rounds of talks, with Trump, until recently, commending the progress made by the two countries in working on a deal.
The US Administration has been reluctant both privately and publicly to remove tariffs on China as a way to provide leverage that Beijing will keep its promises as part of any negotiation.
Trump’s recent tweets are being perceived as a bid to ratchet up pressure on Beijing, as there are major sticking points which are yet to be hammered out by the two sides when they meet for negotiations again this week.