US-China fresh tensions threaten the world economy

The IMF chief Christine Lagarde said on Tuesday that fresh trade tensions between the United States and China were the main threat to the world economy. Lagarde told journalists at a conference in Paris, entitled "Sustainable Debt for Sustainable Growth", that recent "rumours and tweets" made an agreement between the US and China less likely, news wires reported. President Donald Trump jolted global markets on Monday by threatening on Twitter that tariffs already imposed on $200bn in Chinese exports to US would more than double to 25% on Friday from their current level of 10%.

Also speaking at the Paris conference, French Economy Minister Bruno Le Maire warned about the impact of a trade war between the world's two biggest economies. "We are following the current negotiations very closely between China and the US and we want them to respect the principals of transparency and multilateralism," he said. He called on the two sides to "avoid taking decisions that would threaten and would undermine global growth in the months ahead." "Increasing tariffs is always a dead-end and a negative decision for the whole world, for the United States, for China, for the Eurozone, for Europe and world growth," he said.

China said Tuesday its top trade negotiator will visit the United States for talks with his American counterparts this week. The countries have been locked in talks to resolve tensions that have seen both of them impose tariffs on goods worth $360bn.

Treasury Secretary Steven Mnuchin has described the negotiations as 90% complete but told reporters that in recent days the talks went "substantially backward", which he blamed on China reneging on previous commitments.

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