International Monetary Fund chief Christine Lagarde has called on China and the US to resolve their looming trade disputes through the use of existing multilateral provisions and organizations.
Both countries have been locked in a war of words and threats over US President Donald Trump’s decision to impose substantial tariffs on Chinese goods entering US markets. China has responded by doing the same, largely focused on agricultural industries in the American heartland.
Trump responded by increasing the scope of Chinese products to be hit with tariffs – to $150 billion – in a tit-for-tat exchange between the two economic powers.
In recent weeks, however, both countries have hunkered down with neither moving forward on their threats as economists warn that a trade war would be a lose-lose scenario for both countries.
A trade war would be disastrous for global economies as well; these have only now started to show sustained growth following the global financial crisis on the back of the sub-prime mortgage crisis in the US.
Lagarde said that the United States and China should work on the basis of free trade and within the framework of the rules-based multilateral institutions.
Meanwhile, Chinese officials with the Ministry of Commerce have welcomed reports that the U.S. Treasury Secretary Steven Mnuchin is considering making a trip to China to discuss economic and trade issues.
“I did meet with the Chinese here. The discussions were really more around the governor’s actions at the PBOC (People’s Bank of China) and certain actions they’ve announced in terms of opening some of their markets, which we very much encourage and appreciate,” Mnuchin told reporters on the sidelines of an IMF meeting in Washington on Saturday.
The BRICS Post with inputs from Agencies