IMF chief Christine Lagarde weighed in on the ongoing US-China trade dispute on Thursday, warning of the secondary impacts of protectionist measures on global confidence and investment, Reuters reports.
Although the direct impact may appear manageable in the short term, the real threat lies in the “erosion of confidence” that stunts global investment and growth.
Speaking in Washington ahead of the IMF and World Bank spring meetings, Lagarde said: “When investors do not know under what terms they will be trading, when they don’t know how to organize their supply chain, they are reluctant to invest.”
“Investment and trade are two key engines that are finally picking up. We don’t want to damage that,” she added.