The International Monetary Fund is still very concerned about the trade war that is being ongoing between the United States and China. The Managing Director of the world body Christine Lagarde, told the international news agency Reuters during a visit to Uzbekistan that the trade war could be a risk to the world economic outlook unless it the two parties are able to soon bring an end to it.

“Obviously, the downside risk that we have is continued trade tensions between the United States and China,” Lagarde said. She was referring to the world economic outlook issued by the IMF.

“And if these tensions are not resolved, that clearly is a risk going forward,” she added.

As a reference, it should be mentioned that the growth forecast of the global economy for the entire of 2019 made by the IMF last month was brought down to 3.3 per cent from the body’s earlier forecast of a global growth rate of 3.5 per cent for the current year.

While making the earlier forecast, the IMF had also issued warning that there would could be a further slowdown in the global economy because of the trade disputes and tensions as well as the uncertainty surrounding the exit of the United Kingdom from the European Union.

“But we expect that at the end of 2019 and in 2020 it will bounce back,” Lagarde said while talking about the world economic outlook of the IMF.

The trade tensions between the US and China do not seem to be dying down any time soon. Earlier this month, United States president Donald Trump decided to increase import tariffs on Chinese goods worth $200 billion from 10 per cent to 20 per cent. And more recently last week, Trump also issued an executive order in which American telecom companies were banned from using products or technology from foreign companies that are perceived to be a threat to national security. Trough not naming any company or foreign entity, that order has effectively banned Huawei from doing business in the US following the blacklisting of the company by the US Commerce Department by placing it on the so called “Entity List” on May 15.

Those two incidents has angered China and poses threat to derailment of the ongoing trade negotiations between the US and China. Beijing has already issued warnings to the US about holding the negotiations on equal footing and not put pressure on it to agree to US terms of a trade agreement.

And added to these developments, it has been reported that on Friday that China has made a suggestion that it would be pointless to resume trade negotiations on trade between the two largest economies of the world unless things had been changed by the US.

(Adapted from EeconomicTimes.com)

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