Global stocks sank Wednesday after US President Donald Trump said he was not satisfied with talks that are aimed at averting a trade war with China. Equities were also dented by poor eurozone economic data, and as Trump cast doubt on a planned summit with North Korean leader Kim Jong Un. “Trump (is) continuing to drive uncertainty over global trade,” said analyst Joshua Mahony at trading firm IG. “European markets are following their Asian counterparts lower, as a pessimistic tone from Trump is compounded by downbeat economic data,” he added. Markets had surged Monday after US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He said they had agreed to pull back from imposing threatened tariffs on billions of dollars of goods, and continue talks on a variety of trade issues. However, Trump has declared that he was “not satisfied” with the status of the talks, fuelling worries that the world’s top two economies could still slug out an economically pain
Kristalina Georgieva speaks during her solemn undertaking before the Court of Justice of the European Union in Luxembourg on December 10, 2014. AFP PHOTO / JOHN THYS
The chief executive of the World Bank urged US President Donald Trump on Thursday to be “careful” before imposing controversial steel and aluminium tariffs, warning that they could affect global trade.
Kristalina Georgieva said Trump should “assess the implications” before going ahead with a plan that has sparked fears of a trade war with China and Europe and spooked world markets.
The Bulgarian former EU commissioner said that her message to Trump, who is expected to sign off on the tariffs later Wednesday, was to make a “careful assessment before taking any further step”.
“If you take a step for a reason then you need to project on a couple of steps for the implications,” Georgieva told a small group of media outlets including AFP in Brussels. “Assess what are the implications and then advise about these implications.”
The EU has vowed to retaliate against the tariffs with its own measures targeting not only US steel but also products such as bourbon whiskey, jeans, motorcycles, orange juice and cranberries.
Georgieva, whose organisation specialises in lending money to poor countries, added that Trump should take a “carefully calibrated approach to what happens in world trade”.
“When trade shrinks it has implications for the poorest populations in rich countries. The goods are more expensive and poor people spend more of their money buying these goods,” she said.
Trump himself appeared to hint at carve-outs on Thursday, vowing that the tariffs which he says are aimed at saving the US steel industry and cutting its deficit would show “great flexibility” to “real friends.”
European Commission Vice-President Jyrki Katainen said during the same interview that Trump’s actions risked causing a shock to the global economy.
“There are no winners in this trade war,” he said.
“The rest of the world must adapt to the situation and try to influence the US administration’s behaviour.”
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