WASHINGTON: Trade tensions and the exchange of tariffs between the United States and China pose a "threat to the global economy", the International Monetary Fund warned on Thursday.
Renewed tensions between the two economic superpowers were hanging over the negotiations that were set to resume later Thursday and IMF spokesman Gerry Rice renewed the call for a "speedy resolution". "Clearly tensions between the United States and China in the trade sphere are a threat to the global economy," Rice told reporters. "As we have said before, everybody loses in a protracted trade conflict."
The US-China talks seemed on the verge of collapse this week after President Donald Trump said he would more than double punitive tariffs on USD 200 billion in Chinese goods starting Friday, accusing Beijing of backtracking on commitments made during the year-long negotiations.
Beijing denied the charge on Thursday and warned of unspecified retaliation should the new 25 per cent duties take effect.
Nevertheless, Vice Premier Liu He is due in Washington for the key round of talks. Trump said Wednesday that China's negotiators were coming to "make a deal." Rice called on "all parties to seek a resolution that strengthens the international trading system." "We'd be hoping for a speedy resolution to these discussions."
The IMF last month predicted that the slowing world economy could see a modest rebound in the latter part of 2019 -- provided in part that the world's top two economies resolve their differences. Officials called the recovery "precarious."
The IMF's World Economic Outlook once again downgraded global growth to 3.3 percent for 2019, two tenths lower than the global crisis lender forecast in January and four tenths lower than October.