International Monetary Fund Managing Director Christine Lagarde issued a fresh warning about the threat trade tensions pose for the world economy and said it may take time for the US and China to resolve their issues.
The comments came two days after tweets by US President Donald Trump warning of new tariffs on China, marking an escalation of hostilities amid talks aimed at brokering a solution between the two nations. The US also accused China of backpedaling on commitments made during the negotiations.
“We thought this threat was waning and relations were improving and we were moving toward an agreement,” Lagarde said in Paris. “We hope that is still the case but today rumours, tweets and comments are not very favourable.”
Speaking later in an interview with Bloomberg TV in Paris, Lagarde said there may not be a quick resolution as both sides must tackle “very important issues.”
“All the observers would like it to be done yesterday, but those matters actually take time,” Lagarde said.
China’s top trade negotiator, Liu He, still plans to visit the US this week for trade talks. Trump has said he intends to raise tariffs on $200 billion (Dh734.5 billion) of Chinese goods to 25 per cent from 10 per cent and may also impose duties “shortly” on $325 billion of Chinese goods that aren’t currently covered.
“It is imperative for trade tensions to be resolved in a satisfactory way for everyone,” Lagarde said. “Today, clearly the tensions between the US and China are a threat for the global economy.”
