A global trade war triggered by U.S. tariffs would do serious damage to the world economy and would leave no winners, International Monetary Fund Managing Director Christine Lagarde said.
"The macroeconomic impact would be serious, not only if the U.S. took action, but especially if other countries were to retaliate, notably those who would be most affected, such as Canada, Europe, and Germany in particular," Lagarde was quoted by Reuters as saying on French radio network RTL.
U.S. President Donald Trump announced March 1 plans to impose stiff tariffs on steel and aluminum imports, warning the EU it would get hit with a "big tax" for not treating the U.S. well in trade, the report said. This prompted the bloc to promise retaliatory tariffs which, in turn, led to a Trump threat to implement tariffs on cars imported from Europe.
"In a so-called trade war, driven by reciprocal increases of import tariffs, nobody wins, one generally finds losers on both sides ... We recommend an agreement between the different parties, and talks, talks," Lagarde reportedly said, adding that she hoped Trump would not push through with the tariffs threat.
But Lagarde indicated that Trump might have a case for his threat to slap tariffs on some imports.
"There are some countries in the world that do not necessarily respect the World Trade Organization agreements, and which impose technology transfers. China is a case in point but it is not the only country with such practices," she said.
