IMF chief Christine Lagarde today cautioned against any measure that may stifle international trade, saying any such step would undermine the recovery in global economic growth.
Speaking at a session on remaking of global finance here at the World Economic Forum (WEF), Lagarde said, "We are certainly seeing two clear engines of growth. One is investment which is growing pretty well and the other is international trade that is growing even faster than the global economic growth."
She said there is a need to fire on all cylinders for sustained growth and trade is a very important part of that and any measure that seeks to restrict trade will hurt growth in a big way.
Asked whether she was being diplomatic by not directly mentioning the steps underway in the US, Lagarde said, "Who will agree with measures that impacts trade adversely? Opening barriers under a rules-based system is what is always a welcome step."
US Treasury Secretary Steven Mnuchin said the foremost economic agenda of President Donald Trump has been to ensure sustained economic growth and one can see the positive reaction from the stock markets.
"Our objective is to ensure wage growth and that is a big focus of what we are doing," he said. Besides, the US is getting a great response from international companies and everyone knows the country is open for doing business and we could not be more pleased with this, he added.
He also brushed aside any suggestion that the US is in a so-called race to the bottom on tax rates.
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