IMF chief Georgieva warns on US-China rivalry, calls high tariffs counterproductive

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The head of the International Monetary Fund warned of risks to the global economy from the rivalry between China and the United States, while describing tariffs put on Chinese imports under then-President Donald Trump as counterproductive.

“We may be sleepwalking into a world that is poorer and less secure as a result,” IMF Managing Director Kristalina Georgieva
told the Washington Post in an interview published on Saturday.

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“I lived through the first Cold War on the other side of the Iron Curtain. And, yeah, it is quite cold out there,” Georgieva, who was born and raised in Bulgaria, said in the interview. “And to go in a second cold war for another generation is ... very irresponsible.”

President Joe Biden has yet to resolve the key policy issue surrounding tariffs on Chinese goods established by his predecessor that cost US importers billions of dollars.

“It is important to think through actions and what they may generate as counter actions carefully, because once you let the
genie out of the bottle, it’s hard to put it back in,” Georgieva said of the Trump-era tariffs.

Biden’s team wrestled for months with various ways to ease the costs of duties imposed on Chinese imports as it tries to tamp down inflation.

China’s military exercises around Taiwan led Biden administration officials to recalibrate their thinking on whether to scrap some tariffs or potentially impose others on Beijing, people familiar with the matter told Reuters in August.

Beijing staged the war games that month after US House Speaker Nancy Pelosi visited Taipei, and has since continued military activities nearby including almost daily fighter jet crossings of the sensitive median line in the narrow Taiwan Strait.

Relations between the world’s two largest economies have strained in recent years over issues like tariffs, Taiwan, intellectual property, cyber security, the removal of Hong Kong’s autonomy and the origins of the COVID-19 outbreak, among others.

Read more: US president Biden says lines of communication to stay open with China

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