International Monetary Fund (IMF) chief Christine Lagarde on Thursday issued a renewed warning against protectionism, saying moves to restrict trade threatened to slow the current global economic expansion.
The remarks come as the White House intensifies its confrontations with trade partners, announcing a new trade dispute with India and warning that additional import tariffs could be announced soon.
Lagarde statement comes ahead of Monday’s Group of 20 finance ministers meeting in Buenos Aires, where ministers and central bankers will gather from market economies now contending with new US tariffs on steel, aluminum, washing machines and solar panels.
Fears of a trade war have drawn rebukes from US lawmakers and sent global stocks tumbling since last week.
“We know that the self-inflicted harm of import tariffs can be substantial even when trade partners do not retaliate with tariffs of their own,” Lagarde said in written remarks.
“We also know that protectionism is pernicious because it puts the biggest strain on the poorest consumers who buy relatively more low-priced imports. In other words, harming trade is bad for the economy and bad for people.”
Lagarde said the IMF had raised its global GDP growth forecasts in January to a robust 3.9 percent for 2018 and 2019.
But she warned this would not last, calling on member countries to resist protectionism and reduce economic risks by enacting reforms and cutting debt levels to prepare for sudden increases in inflation — “creating more room to act in the next downturn.”