Countries need to work together constructively to reduce trade barriers and resolve differences without resorting to "exceptional measures", the IMF chief said today, warning that trade wars not only hurt global growth but are also "unwinnable".
Ahead of the meeting of the G-20 Finance Ministers in Argentina next week, IMF Managing Director Christine Lagarde in a blog said that policymakers should ensure that import tariffs recently announced by the US do not lead to a wider escalation of protectionism.
She urged countries to steer clear of protectionism, guard against financial risks, set up economic reforms, foster more economic growth and strengthen international cooperation.
"The G20 can show leadership on all these issues. In the process, they can also secure the upswing and promote growth that is shared by everyone, Lagarde said.
"While the current global momentum remains strong, the G-20 countries need to take these concrete steps to ensure that it stays strong," she said.
Calling the policymakers to work constructively together to reduce trade barriers and resolve trade disagreements without resorting to "exceptional measures", she said they should ensure that the recently announced US import tariffs do not lead to a wider escalation of protectionist measures.
US President Donald Trump has imposed stiff tariffs on steel and aluminium, arguing that protecting domestic producers is a matter of national security, a move that has raised fears of a possible trade war. Powerful states around the world have vowed to fight back.
Urging countries to steer clear of protectionism, the IMF chief said the economic history clearly shows that "trade wars not only hurt global growth, but they are also unwinnable."
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