WASHINGTON: After the commencement of trade war between United States and China, International Monetary Fund Managing Director Christine Lagarde at the American Enterprise Institute, cautioned that the trade dispute between the United States and China could slash global GDP growth by 0.5 per cent by 2020.
Following the recent collapse of US-China trade talks, President Donald Trump announced that tariffs on about $200 billion of Chinese imports would increase from 10 percent to 25 percent. He also threatened to apply new tariffs to more than $300 billion of additional goods.
"Only dealing with China, let alone Mexico which is a more recent development... that alone would shave off the forecast that we have by 0.5 per cent," Lagarde said on Wednesday about the recent US tariffs on Chinese imports.
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Risks the IMF identified back a couple of months ago, she added, have actually begun materializing including risks associated with trade tensions.
Trump in a tweet on Wednesday said progress has been made in immigration talks with Mexican officials on his threat to impose gradual tariffs on all goods coming from Mexico.
In 2018, the United States imported nearly $540 billion worth of goods from China, according to US Commerce Department data, and around $370 billion from Mexico.