President Donald Trump’s mounting trade war could rack up quite the tab.
The International Monetary Fund said Monday that the global economy could lose $430 billion by 2020 if current trade threats — tossed back and forth between the U.S. China, Canada, Mexico and Europe — become reality and business confidence falls as a result.
“Global output could be about 0.5 percent below current projections by 2020,” the IMF said. “As the focus of global retaliation, the United States finds a relatively high share of its exports taxed in global markets in such a broader trade conflict, and it is therefore especially vulnerable.”
The IMF further advised that countries should avoid “protectionist measures” in favor of policies and reforms aimed at sustaining activity, raising medium-term growth and enhancing its inclusiveness.
Over the past several weeks, the global trade tit for tat — initiated in March when Trump signed an executive order to slap new tariffs on China — has seen thousands of products from the U.S., China, Mexico, Canada and Europe threatened with or affected by new tariffs.
While footwear has dodged the bullet so far — prior to the current trade tensions, the category was already among the most heavily tariffed — handbags and other accessories have been hit.
On July 10, the Trump administration said it identified an additional $200 billion worth of U.S. imports from China to be hit with a 10 percent tariff — among the items on the list were select handbags, travel products and other accessories.
In Monday’s World Economic Outlook Update, the IMF said it continues to project global growth rates of just about 3.9 percent for both this year and 2019.