IMF’s Lagarde: US-China trade tensions are threat to global economy

Stock futures fall as uncertainty keeps investors on edge

Christine Lagarde of the International Monetary Fund. “For us at the IMF, it’s imperative that trade tensions are resolved in a way satisfying for everyone,” she said on Tuesday. Photograph: Andrew Harrer/Bloomberg

Christine Lagarde of the International Monetary Fund. “For us at the IMF, it’s imperative that trade tensions are resolved in a way satisfying for everyone,” she said on Tuesday. Photograph: Andrew Harrer/Bloomberg

 

International Monetary Fund (IMF) head Christine Lagarde said on Tuesday that China and the United States must resolve their trade tensions because they threaten the global economy.

“For us at the IMF, it’s imperative that trade tensions are resolved in a way satisfying for everyone because clearly tensions between the United States and China are the threat to the global economy,” said Ms Lagarde, on the sidelines of a conference at France’s finance ministry.

US stock index futures fell on Tuesday as uncertainty of a trade deal being reached between the United States and China kept investors on edge.

Chinese Vice Premier Liu He will visit the United States this week for trade talks, Beijing said on Tuesday, playing down a sudden increase in tensions after US President Donald Trump vowed to impose new tariffs.

In a surprise tweet on Sunday, Mr Trump said the higher levies would go into effect on Friday if no deal with China was sealed. His comments triggered a global sell-off in stocks and inflamed fears of a slowdown in global growth, fears of which have periodically roiled markets over the past year.

Premarket trading

Tariff-sensitive Boeing Co fell 1.4 per cent in premarket trading, while Caterpillar Inc dipped 0.6 per cent. Boeing’s stock was also pulled down by report of a Barclays downgrade to “equal weight”.

Investors pulled back from riskier bets, as hopes of a trade deal between the world’s two largest economies helped a rally in stocks recently, with the S&P 500 and the Nasdaq hitting record highs last week. The benchmark index is nearly 1 per cent away from its all-time high of 2,954.13. – Reuters