Rising trade tensions between the United States and the rest of the world could cost the global economy $430 billion (£324bn), with America “especially vulnerable” to an escalating tariff war, the International Monetary Fund has warned.
Delivering a sharp rebuke for Donald Trump, the Washington-based organization said the current threats made by the U.S. and its trading partners risked lowering global growth by as much as 0.5% by 2020, or about $430 billion in lost GDP worldwide.
Although all economies would suffer from further escalation, the U.S. would find itself “as the focus of global retaliation” with a relatively higher share of its exports taxed in global markets. “It is, therefore, especially vulnerable,” the fund said.
Trump raised the stakes in his mounting trade dispute with China last week by proposing 10% tariffs on $200 billion of Chinese goods entering the country. Beijing was quick to warn of retaliation. The president also rattled European leaders by labelling the EU one of his greatest “foes” over trade, while leaving behind a trail of political chaos in Britain from his visit last week.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.