The International Monetary Fund (IMF) has cited the US-China trade war as a core reason for downgrading its economic outlook for the global economy.
In September 2018, US President Donald Trump deepened the rift with China by levying a $200 billion tariff on Chinese goods coming to the US, with threats for more yet should China retaliate.
The Trade War has been ongoing since mid-2018 and both China and the US have moved to tax one another.
In its most recent ‘World Economic Outlook’, (WEO) the IMF stated that the global economy will grow by 3.7% in 2018, 0.2% down from the 3.9% it predicted in April 2018.
Maurice Obstfeld, Chief Economist at the IMF, said: “Last April, at the time of our last World Economic Outlook, the world economy's broad‑based momentum led us to project a 3.9% growth rate for both this year and next.
“Considering developments since then, however, that number now appears overoptimistic. Rather than rising, growth has plateaued at 3.7%.
“There are clouds on the horizon. Growth has proven to be less balanced than we had hoped.
“Not only have some downside risks that the last WEO identified been realized, the likelihood of further negative shocks to our growth forecast has risen.
“In several key economies, moreover, growth is being supported by policies that seem unsustainable over the longer term. These concerns raise the urgency for policymakers to act.”
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