Trump ignores IMF’s warning of a 5% shrink in global economic growth due to trade war

IMF issues DIRE warning for Eurozone and warns TRADE WARS set to ESCALATE
THE International Monetary Fund (IMF) has warned Eurozone growth could be derailed by escalating trade wars and the threat of more tariffs on goods from the US.
PUBLISHED: 19:55, Mon, Jul 16, 2018 | UPDATED: 20:15, Mon, Jul 16, 2018
The fund said it had cut its 2018 growth forecasts for Eurozone countries, including Britain, because of softer-than-expected first quarter performance coupled with tighter financial conditions due to political uncertainty. It has now reduced the Eurozone’s growth forecast for this year from 2.4 percent to 2.2 percent, with Britain cut to 1.4 percent from 1.6 percent. US President Donald Trump has continued to threaten the European Union with tariffs on a number of goods which has sparked fierce retaliation from trading partners … for more, go to 

Trump ignores IMF’s warning of a 5% shrink in global economic growth due to trade war

KUALA LUMPUR (July 2018): The International Monetary Fund (IMF) last week warned President Donald Trump that his US-China trade war could cost the global economy US$430 billion, shrinking growth by at least 5%.

But Trump responded with a threat to impose tariff on all Chinese goods and also other US imports from Canada and the European Union (EU).

I Love Malaysia-China Silk Road finds the egoistic Trump’s response as the clearest sign that he was prepared to rock the global economy and face a global economic backlash.

The trigger-happy tariff and sanction slapping Trump ignores the economic misery of Americans and the rest of the world.

It sure looks like Trump will not stop his “Make America Great Again” policy and agenda that must be achieved at all costs.

Trump is blinded by his power as US president and the fact that his actions are actually alienating the US domestic and international economy as the rest of the world respond with retaliatory measures.

Here’s The Guardian’s news report on the IMF report warning Trump:

"IMF warns Trump trade war could cost global economy $430bn
US could find itself ‘focus of global retaliation’ in tariff dispute, says WEO report

Richard Partington
Economics correspondent
Mon 16 Jul 2018 15.22 BSTLast modified on Mon 16 Jul 2018 18.45

The trade war began when Donald Trump introduced tariffs on imported steel and aluminium. Photograph: Julian Smith/EPA
Rising trade tensions between the United States and the rest of the world could cost the global economy $430bn (£324bn), with America “especially vulnerable” to an escalating tariff war, the International Monetary Fund has warned.

Delivering a sharp rebuke for Donald Trump, the Washington-based organisation said the current threats made by the US and its trading partners risked lowering global growth by as much as 0.5% by 2020, or about $430bn in lost GDP worldwide.

Although all economies would suffer from further escalation, the US would find itself “as the focus of global retaliation” with a relatively higher share of its exports taxed in global markets. “It is therefore especially vulnerable,” the fund said.

Trump raised the stakes in his mounting trade dispute with China last week by proposing 10% tariffs on $200bn of Chinese goods entering the country, on top of $34bn of tariffs that were officially imposed on Beijing at the beginning of the month. The Chinese government, which hit back at the first wave of US tariffs with similar measures, was quick to warn of further retaliation on Monday.

The US president also rattled European leaders by labelling the EU one of his greatest “foes” over trade, while leaving behind a trail of political chaos in Britain from his visit last week.

IMF growth chart

Issuing its latest World Economic Outlook report on Monday amid the rising tensions, the IMF said there were greater risks emerging for the global economy since its last assessment in the spring. Although world growth remains strong, the expansion is “becoming less even, and risks to the outlook are mounting”, it said.

Warning that the broad expansion for the world economy that began about two years ago has plateaued, Maurice Obstfeld, the IMF’s economic counsellor, said: “Countries must resist inward-looking thinking and remember that on a range of problems of common interest, multilateral cooperation is vital.”

Beyond the immediate threat from weaker levels of international trade, the IMF said greater use of protectionist measures could hinder business investment, disrupt global supply chains, slow the spread of productivity-boosting technologies and raise the price of consumer goods.

Despite highlighting greater risks for the world economy, the fund left its global growth forecast of 3.9% for both this year and next unchanged. However, it unveiled sharp slowdowns for the EU, UK and Japan amid weaker growth and increasing political tension.

Growth in the UK this year is forecast to slow to 1.4%, compared with an estimate of 1.6% made in April, as a consequence of weaker economic growth in the first quarter of 2018. The British economy ground to a halt in March amid freezing weather and heavy snowfall, although has since staged a modest rebound.

The fund also highlighted the risk attached to Westminster and Brussels failing to make further progress on the terms of Brexit, despite several months of negotiations between the two sides.

Germany, France and Italy were among European nations receiving the sharpest downgrades for growth this year, of as much as 0.3% compared with forecasts made in April, amid rising political risks in the single currency area triggered by the Italian election earlier this year. Growth across the eurozone this year is forecast to slow to 2.2%, compared with an earlier forecast for an expansion of 2.4%.

The IMF said China would continue to grow at the slower rates it forecast back in April, of about 6.6% this year. While the US faces greater risks from trade, the fund said Trump’s tax cuts would also mean the American economy continuing to grow in line with its previous estimates, of around 2.4% this year.

The Japanese economy is forecast to cool to 1%, marking the slowest growth rate among advanced nations – a downgrade of 0.2% – following weak private consumption and investment in the first quarter of the year.

The IMF also warned of risks as the Federal Reserve prepares to raise interest rates. Alongside the threat of greater trade disputes, Obstfeld said: “Financial markets seem broadly complacent in the face of these contingencies.
Trump is back to threatening tariffs against Canada and the European Union. Photo by SAUL LOEB / AFP.
Here's How The Economy Gets Whacked In A Trade War
Kenneth Rapoza


Jun 5, 2018, 09:17am 3,743 views #ForeignAffairs

President Donald Trump was back at it last week, threatening tariffs and getting old allies riled up. From Canada to Germany, Trump is an affront to the post-World War II Atlantic trading alliance. Yet despite rumors of trade wars and tariffs on Russian, Chinese and Brazilian steel and aluminum, global growth forecasts by Barclays Capital anyway is still 4.2%, besting last year's growth of 3.9%. “I think the Chinese economy is doing even better than people think it is,” says Mike Reynal, an emerging markets fund manager for Sophus Capital in Des Moines. Brazil is doing worse. But that’s their fault, not Trump’s steel tariffs. The latest round of OECD forecasts published last week all point to growth. The trade war everyone is up in arms about has not leveled anybody just yet. OECD numbers show upgraded growth prospects, greater investment and—get this one—a rebound in trade, not to mention tighter labor markets, especially here at home. The unemployment rate is projected to decrease to its lowest level since the 1980s. It is under 4% in the U.S., though many European countries are still faced with double-digit unemployment, as is the case in Italy and perennial basket case Greece … for more, go to