NUSA DUA, Indonesia – The United States and China brought their ongoing trade war to the annual meetings of the International Monetary Fund and World Bank, which came to a close on Saturday.
South African Reserve Bank Governor Lesetja Kganyago, who is chair of the IMF’s policy advisory committee, highlighted the escalated trade tensions as well as tighter global financial conditions that are affecting many emerging economies.
IMF Director General Christine Lagarde spoke about the need to ease tensions and made a call to reform the global trade system.
“Sail together and we will be stronger. Don’t drift and let’s cooperate as much as we can because we will be better off together,” the IMF chief said.
On Tuesday, the International Monetary Fund lowered its forecasts for global economic growth this year and next to 3.7 percent, citing rising trade protectionism and instability in emerging markets.
Meanwhile, US Treasury Secretary Steven Mnuchin said that his country’s “robust” growth, which is expected to end the year with a growth of 2.9 percent, was “positive” for the global economy and dismissed protectionism claims against Washington.
Mnuchin told an exclusive group of reporters that the US was in favor of a “free, fair and reciprocal relationship.”
Mnuchin, who met China’s central bank Governor Yi Gang on the sidelines of the annual meetings, described the meeting as “productive” but said that the US will continue its efforts amid what he called restrictive trade practices and also make currency manipulation – which Washington accuses Beijing of – a part of trade discussions between the two countries.
In an address to the International Monetary and Financial Committee, Yi said that China will not use the exchange rate as a tool to deal with trade fictions but echoed concerns that the trade dispute was one of the main risks for the global economy.