Fundamental Analysis IMF Warns That Trade War Is In Nobody’s Interest IMF Warns That Trade War Is In Nobody’s Interest Thursday, 19 July 2018 12:25 Share 0 Tweet 0 Pin it 0 +1 Donald Trump’s current fixation is that the USA has trade deficits with many nations. He has determined that this is because of “unfair” trading practices that his predecessors signed up to; yet the US economy is the biggest in the word. Something like two-thirds of US output is consumed within the USA. Levying tariffs on goods from overseas, of course, pushes the prices up for those goods in the US market, meaning consumers must pay more. The logic is that if imports are dearer, consumers will turn to US producers for their needs, but this is not always possible or desirable. Mr Trump is of the opinion that the US will easily win a trade war and that to have one is a “no brainer”. This rhetoric is remarkably similar to the claims of Brexiteers that nations would be queuing up to sign trade deals with the UK and that the EU needs the UK far more than it needs them. The latest body to differ with the opinion of the President is the IMF who, quite reasonably, point out that a trade war is in nobody’s interest and will hurt global growth. The body is maintaining forecasts for 2018, but thinks that trade wars are the “greatest near-term threat”. It sees the prospect as already dampening future growth: The possibility for more buoyant growth than forecast has faded somewhat. Downside risks, on the other hand, have become more salient." The IMF is suggesting that an escalation of the current dispute to a wider base could knock 0.5% of global trade by 2020 – global trade is worth something like $15.6 trillion (exports), so the sum is very significant. The IMF points out that the US economy is vulnerable to countermeasures to its tariffs on imported goods in its own export markets. It is unlikely that any trade war will be the quick, easy and decisive US victory that Mr Trump has predicted. Dr. Mike Campbell Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.