Washington: Christine Lagarde, Managing Director of the International Monetary Fund (IMF), has urged global policymakers to guard against trade protectionism in the wake of US proposed tariffs on steel and aluminium.
“Policymakers need to work constructively together to reduce trade barriers and resolve trade disagreements without resort to exceptional measures,” Lagarde said in a blog post on Thursday, Xinhua news agency reported.
“They should ensure that the recently announced US import tariffs do not lead to a wider escalation of protectionist measures,” she said, warning that trade wars will hurt global growth and they are also “unwinnable”.
Her warning comes as finance ministers and central bank governors from the Group of 20 (G20) prepare to meet in Buenos Aires, Argentina, next week.
“Their focus will be on the policies needed to protect this (global economic) upswing against downside risks and bolster growth going forward,” said the IMF chief.
As “harming trade is bad for the economy and bad for people,” it’s critical to use fiscal means to address global economic imbalances rather than raising new obstacles to trade, she added.
Lagarde’s remarks also comes after US President Donald Trump announced last week that the US would slap a 25-per cent tariff on imported steel and a 10-per cent tariff on imported aluminium on the grounds of national security.
These unilateral protectionist measures have sparked widespread criticism and provoked threats of retaliation from major trading partners, raising the prospect of escalating global trade conflicts that threaten the global recovery.
