The International Monetary Fund (IMF) has recently stated that the postwar global trading system risks being torn apart amongst concerns over the tariff tension between China and the US.
Additionally, the IMF is said to have used its 6-monthly health check for the world economy in order to tell the policymakers that they are required to address the public’s worries and concerns before a better-than-expected period of growth came to an end.
The IMF’s economic counsellor, Maurice Obstfeld, claims “the first shots in a potential trade war have now been fired”.
Moreover, Trump’s tax cuts would suck imports into the US and increase the size of the trade deficit 2019 by USD $150 billion, a trend which could exacerbate trade tensions.
This comes after Donald Trump threatened USD $150 billion (£106 billion) of import tariffs on Chinese products arriving in the US. In addition, the US has a trade deficit worth USD $375 billion with China.