The International Monetary Fund warned on the 5th of June, 2019 that Current and threatened U.S.-China tariffs could slash global economic output by 0.5% in 2020.
The world finance leaders prepare to meet in Japan this weekend. The IMF Managing Director Christine Lagarde said in a blog and briefing note for G20 finance ministers and central bank governors that taxing all trade between the two countries, as President Donald Trump has threatened, would cause some $455 billion (358 billion pounds) in gross domestic product to evaporate – a loss larger than G20 member South Africa’s economy.
“These are self-inflicted wounds that must be avoided,” Lagarde said in an IMF blog post. “How? By removing the recently implemented trade barriers and by avoiding further barriers in whatever form.”
The IMF also added that U.S. tariffs and Chinese retaliatory measures put in place thus far, including a recent increase in U.S. tariffs to 25 percent on a $200 billion list of Chinese imports, could cut 2020 growth by 0.3 percent. More than half of that impact comes from negative effects on business confidence and financial market sentiment.
“The fact is that protectionist measures are not only hurting growth and jobs, but they are also making tradable consumer goods less affordable – and disproportionately harming low-income households,” Lagarde said.