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Open trade policies serve the American economy better than increasing tariffs on China
Increasing criticism
The Executive Director of the International Monetary Fund, Kristalina Georgieva, said last month: “All eyes are on the United States.” In light of the Fund’s increasing criticism of its largest and most influential contributing country due to the global influence of its policies. This includes Washington’s high debt levels, trade restrictions and targeted industrial policies China and even the impact of the Federal Reserve’s tight monetary policy, which led to the weakening of currencies against the dollar globally.
Last Tuesday, President Joe Biden revealed the imposition of significant increases in customs fees on a range of Chinese imports, in an effort during an election year to boost local manufacturing in vital industries. The White House described the move as a necessary measure to protect American workers and companies from alleged fraud.
IMF research shows that fragmentation of the global economy could lead to a variety of consequences, including potential losses to global GDP, of up to 7% in the case of “severe fragmentation,” equivalent to the combined output of the German and Japanese economies. . Kozak said the cost would be higher if there was a collapse in trade and availability of technology.
She added: “We also call on the United States and China to work together to reach a settlement that addresses the fundamental concerns that have exacerbated trade tensions. More broadly, we urge all countries to work within the multilateral framework to resolve their differences.”
