WASHINGTON: The partial trade deal between the United States and China is welcome news but does not undo the trade war's negative impact on the global economy, IMF chief Kristalina Georgieva said on Thursday.
"It's really good news that the US and China are talking to each other," she told reporters at the start of the International Monetary Fund annual meeting. But "it's not good enough".
The IMF calculates that the full effect of the tariffs and retaliation, already imposed and threatened, would cut the global economy by 0.8 per cent. But Georgieva said the truce, which could forestall another round of import taxes, "could very well reduce the loss by 0.2 per cent."
"What we need is to reach, not just truce, we need to have trade peace," so that trade can "return to its role of an engine of the world economy." US President Donald Trump last week announced a "substantial" phase one deal with China to put an end to the trade frictions now in the second year.
However, besides promises to more than double purchases of American farm products, details of the accord remain scarce. And comments from China are far less optimistic, indicating more talks are needed to finalize a pact.
Washington did hold off on plans to increase punitive tariffs on USD 250 billion in Chinese imports, which had been due to take effect earlier this week.
But another round of duties that are set to hit December 15 remains in question. Trump said that the deal is being "papered" and he expects to sign with China's President Xi Jinping in mid-November at the APEC summit in Santiago, Chile.