IMF Director: The divided global economy threatens to shrink 1.5% annually

International Monetary Fund director Kristalina Georgieva said the divided global economy threatens to contract by 1.5% annually.

He warned of the risks to the global economy from competition between China and the United States and described tariffs imposed by former US President Donald Trump on Chinese imports as counterproductive.

“We could walk without feeling towards a world that is consequently poorer and less secure,” said Georgieva in an interview with the Washington Post published on Saturday.

“You lived the first Cold War on the other side of the Iron Curtain. And yes, it is very cold there … and to precipitate a new generation in a second Cold War … is absolutely irresponsible “, Georgieva, who was born and raised in Bulgaria, he added in the interview.

President Joe Biden has yet to solve the main problem of his predecessor’s tariffs on Chinese goods that cost US importers billions of dollars.

Georgieva commented on the Trump-era cartoons, saying: “It is important to think carefully about the measures and possible backlashes, because once the genius is taken out of the lamp, it will be difficult to bring it back.”

Biden’s team has been fighting for months in various ways to reduce the costs of tariffs imposed on Chinese imports as the administration tries to curb inflation.

Informed sources in they previously told Reuters in August that Chinese military exercises around Taiwan had prompted Biden administration officials to rethink whether to cancel some tariffs or impose others on Beijing.

Beijing held maneuvers that month after a visit by US House Speaker Nancy Pelosi to Taipei, and has since continued to conduct military activities near it, including nearly daily fighter jets crossing a dividing line in the Taiwan Strait.

Relations between the world’s two largest economies have been strained in recent years over issues such as tariffs, Taiwan, intellectual property, cybersecurity, and the origin of the coronavirus.

Read More About: Business News