US/China trade war high on IMF/World Bank spring meetings agenda

BY: By Charles Benoni Okine, Washington DC
Christine Lagarde
Christine Lagarde

The 2018 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (Bank) opened on Monday at the headquarters of the Breton Woods Institutions in Washington District of Columbia (DC), the capital of the United States of America (USA).

The meeting has brought together once again, central bankers, ministers of finance and development, private sector executives and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

It will also feature high profile seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world's financial system.

At the heart of the gathering will be meetings of the IMF's International Monetary and Financial Committee and the joint Development Committee, which will discuss progress on the work of the IMF and the World Bank Group.

Dominant topic
At this year’s event, the present trade war fears are expected to dominate the meeting. Again, the IMF and World Bank meetings in Washington, first-quarter results from Unilever and three of the big six US banks will be a major highlight. The rising debt levels in the world will also catch the attention of discussants while the end of an era in Cuba, as Raul Castro steps down as president of that country is also expected to feature prominently.

Experts have warned that the present trade war between the USA and China was in a bad state and could trickle down to affect others if steps were not taken to address the impasse.

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Jim Yong Kim

IMF Chief on trade war
The seriousness of the trade has compelled the Boss of the IMF, Christine Lagarde to warn that the trade war could rip apart the global economy.

According to her the growing threat of a trade war alongside rising debt levels were great matters of concern to the Breton Wood institutions.

She said the rules that underpin global trade were “in danger of being torn apart” by protectionist forces in what she said would be “an inexcusable, collective policy failure”.

Speaking at the University of Hong Kong, Ms Lagarde, last week, warned of the gathering threats of a trade war and the rapid rise in public and private debt around the world.

But she stressed that the global economy continued to grow strongly and remained optimistic about the remainder of 2018 and 2019.

Tit-for-tat tariffs announced by the US and China have sparked fears of a damaging trade war between the world’s two largest economies.

“The multilateral trade system has transformed our world over the past generation. But that system of rules and shared responsibility is now in danger of being torn apart. This would be an inexcusable, collective policy failure,” she warned.

The IMF chief said there were “darker clouds are looming” on the horizon. Let us redouble our efforts to reduce trade barriers and resolve disagreements without using exceptional measures.

Ms Lagarde criticized the thinking of Donald Trump’s administration, while also directing her ire at Germany’s trade imbalances and the lack of proper protection of intellectual property and inefficient state subsidies in China.