Offbeat IMF warns United States against protectionist trade policies

20:26  14 june  2018
20:26  14 june  2018 Source:   reuters.com

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" We regret that the United States left us with no other option than to safeguard EU interests," EU trade Against that backdrop, China and the EU , both are the victims of U . S . trade protectionism In Topical videos: Trade war: ECB chief Mario Draghi warns that protectionist tariffs are dangerous.

He cued in on the IMF ’s stance on the perceived threat posed by a global backlash against free trade and open borders. “ Protectionism and uncertainties about policies are two factors that two factors that we are very concerned about as factors that could hold back both the U . S . and the global

The International Monetary Fund on Thursday warned that U.S. President Donald Trump's new import tariffs threaten to undermine the global trading system, prompt retaliatory responses from other countries and damage the U.S. economy.

The IMF, in a review of U.S. economic policy, also said that while the country's economic growth is expected to be strong this year and next, recent tax and spending measures could cause greater risks from 2020 onward.

Trump has riled key allies by pursuing protectionist trade policies, including the imposition of steel and aluminum tariffs on the European Union, Canada and Mexico.

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The case against trade protectionism is expected to be a major theme of the semi-annual IMF Managing Director Christine Lagarde warned last week that a “sword of protectionism ” hung over a and were “rubbish,” because the United States was less protectionist than its trading partners.

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"These measures...are likely to move the globe further away from an open, fair and rules-based trade system, with adverse effects for both the U.S. economy and for trading partners," the IMF said in its report.

Trump stunned his counterparts by backing out of a joint communique agreed by Group of Seven leaders in Canada last weekend that mentioned the importance of free, fair and mutually beneficial trade.

German Chancellor Angela Merkel has said the EU would implement counter-measures against U.S. tariffs, as did Canada and Mexico.

The IMF said a cycle of retaliation on trade would likely dampen national and international investment, interrupt global and regional supply chains and undermine a system that has supported U.S. growth and job creation.

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International Editions: United States US . United Kingdom UK. President Donald Trump has begun a pursuit of protectionist trade policies — like tariffs. The IMF chief warned against abandoning the system in favor of protectionism .

The case against trade protectionism is expected to be a major theme of the semi-annual gathering of finance officials from the IMF , the World He told the newspaper that the United States was far less protectionist than China and Europe, "and every time we do anything to defend ourselves, even

"The U.S. and its trading partners should work...to reduce trade barriers and resolve trade and investment disagreements without resorting to tariff and non-tariff barriers," the IMF said.

It added that targeting specific levels on bilateral trade balances was counterproductive.

The Trump administration's trade dispute with China has also yet to be resolved. The United States is expected on Friday to unveil revisions to an initial tariff list targeting $50 billion of Chinese goods.

China urged Washington on Thursday to make a "wise decision" on trade, saying it was ready to respond in case Washington chose confrontation.

Elsewhere in its analysis, the Washington-based international lender stuck to its April forecast that the U.S. economy will grow at a 2.9 percent pace in 2018 and 2.7 percent in 2019.

The U.S. economy is being juiced by the administration's $1.5 trillion package of corporate and income tax cuts as well has higher government spending.

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And U . S . pressure at a meeting of the Group of 20 finance ministers in Germany last month forced the group to strike the commitment against protectionist policies , in fueled by U . S . President Donald Trump’s threats to impose tariffs on countries that have trade surpluses with the United States

'Reciprocal trade '. Earlier in the week the International Monetary Fund ( IMF ) had warned that protectionist policies could choke off improving global growth. They dropped an anti - protectionist commitment after opposition from the US .

In line with the U.S. Federal Reserve, the IMF expects growth to slow considerably in 2020. It forecasts the annual pace of growth falling back to 1.9 percent.

It noted that the U.S. government's tax and spending policies during a time when the economy is already experiencing strong growth and low unemployment "increases the range and size of future risks" including higher public debt and greater likelihood of recession.

"The output gap could close more abruptly, through a policy-induced recession, with negative spillovers for the global economy," the IMF said.

The IMF also expressed concern about the growing market power of some of the largest U.S. "superstar" corporations and said that there was a "clear role" for applying antitrust policies or increased regulation.

It did not name any firms, but IMF officials in the past have cited concerns with the market concentration wielded by large technology firms such as Alphabet Inc's Google, Amazon.com Inc Apple Inc and Facebook.

The IMF said the United States needed to combat price discrimination, supply restrictions or predatory pricing that could arise from increased market concentration, and should fairly tax "supernormal" profits resulting from such power.

"It may also sometimes be appropriate for the entity providing the service to be regulated," the IMF said.

Turkey hits United States with retaliatory tariffs .
Turkey just became the latest country to strike back at the United States for its tariffs on steel and aluminum. The country's Ministry of Economy said Thursday that it's imposing tariffs worth $267 million on US goods, targeting items such as coal, paper, walnuts, tobacco, rice, whiskey and cars. The move comes after negotiations with the United States failed to yield meaningful progress, according to the ministry. "Turkey is committed to active, robust and reciprocal trade relations with the US — but with the understanding that fairness cannot be one-sided," Economy Minister Nihat Zeybekci said in a statement.

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