Gita Gopinath, chief economist at the International Monetary Fund (IMF), told Reuters that a trade war triggered by US auto tariffs would affect exports from many countries and force many trading partners to retaliate against US goods. tariff. “When the global economy is recovering, we are concerned about the impact that US auto tariffs may have on the global economy,” she said.
If the trade conflict extends to the automotive industry, Gopinath believes that this will also significantly affect the global manufacturing supply chain. She believes that the impact of this result on the global economy is greater than the Sino-US trade war. Earlier, US President Trump had threatened to impose a 25% tariff on imported cars and auto parts on the grounds of national security. He also confessed that the decision was to force trade partners including Japan and the European Union to start trade negotiations with the United States. However, he also recently threatened to impose a vehicle tariff on Mexico if it did not properly control the border.
The US Department of Commerce has conducted research on the “232 clauses” related to imported cars and shared their recommendations with the White House. This clause is mainly about whether imported car and vehicle parts will threaten national security for investigation, and Trump can consider whether to adjust its vehicle tariff strategy for the Ministry of Commerce before May 17.
Once Trump decides to impose tariffs on imported cars and auto parts, this decision will seriously affect the global economy in the second half of 2019. Previously, according to the Global Economic Outlook report released by the IMF on Tuesday (April 9), the IMF has expected that the global economy is expected to start recovering due to the US Federal Reserve System and other central banks stopping interest rate hikes, which is expected to continue until 2020. . However, the IMF also warned that the magnitude of the economic recovery may be affected by different risks.
Gopinath said that as companies and sovereign debt continue to rise, and some large emerging markets will feel more pressure, coupled with the chaos created by Brexit, trade will be the biggest risk to the global economic recovery. However, she also said that if China and the United States cancel all existing tariffs through trade agreements, the global economy has the opportunity to grow. She said: “If China and the United States cancel all current tariffs, this will be a positive development for the global economic outlook.”
Gopinate said that the content of the Sino-US trade agreement will be the main factor affecting the growth of the global economy. If the agreement reached between China and the United States cannot resolve the long-standing trade conflict, investors will have doubts about the next global economic outlook. She stressed: “We are constantly calling on China and the United States to reach a lasting trade agreement, rather than an agreement that must be revised from time to time.