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Global economy 'under threat as tariff war bites

Global economy 'under threat as tariff war bites
04 Jul

Global economic growth is under threat as the world's economic super powers trade tit-for-tat trade sanctions, according to the World Trade Organization.

In its most sober assessment of the growing tariff war between the US, European Union and China, the WTO said the global system of agreed trade rules was at "potentially large risk".

It said world economic growth was "in jeopardy" and pleaded for a "de-escalation".

The threat of a tariff war was sparked after US President Donald Trump ordered tariffs on steel and aluminium imports from the EU and China.

The President said he was acting to protect American jobs and that global free trade deals had been "very, very bad" for the US.

Both China and the EU responded with the threat of import tariffs on US cars and agricultural goods totalling hundreds of billions of pounds.

Economists have warned that previous trade wars - such as during the 1930s recession - have exacerbated economic problems and that they lead to higher prices and lost jobs.

"The worrying trend is the increase in trade restrictive measures which has come at a time of increasing trade tensions and associated rhetoric," the WTO said in its report on trade between the 20 largest economies in the world - including the UK, the US, China and India, a group of countries also known as the G20.

"This should be of real concern to the international community."