Tags: citi | buiter | trade | war | global | recovery

Citi's Buiter: Trade War Would Be 'End of Global Recovery'

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By    |   Friday, 20 April 2018 11:26 AM

Willem Buiter, Citigroup's special economic adviser, warns that if China and the United States actually tumble into a "serious trade war" it would drive the global economic recovery right into a financial brick wall.

“It would be the biggest self-inflicted wound since the great financial crisis,” he recently told CNBC.

"It would be the end of the global recovery," he said, with CNBC citing that he noted problems beginning in the United States and China, but eventually spilling over into Europe, Japan and other countries.

"It would be very disruptive, both for importers and exporters," Buiter said. "And it would be a major cyclical downturn, depending on how intense and how long-lasting this episode would be."

For its part, China will retaliate if the United States insists on initiating a trade war, China’s ambassador to the United States was quoted as saying by the state news agency Xinhua on Friday.

Speaking at an event held by the Fairbank Center for Chinese Studies at Harvard University this week, Cui Tiankai said any dispute should be worked out through dialogue and a trade war would poison the atmosphere of overall China-U.S. relations, Reuters reported.

Cui also urged the United States to abandon a cold war and zero-sum mentality, Xinhua reported.

Friday on Wall Street, stocks fell as worries about a global slowdown in smartphone demand dented the technology sector while oil prices fell after U.S. President Donald Trump said prices were artificially high, Reuters reported.

A strong earnings season could offset fears of slowing global growth and help stock markets recover from a turbulent first quarter which saw a spike in volatility, increased trade tensions between the United States and China, and spiking geopolitical tensions in the Middle East over Syria.

“While fundamentals remain robust, geopolitics and trade war fears, concerns over slowing global growth, and idiosyncratic issues in the tech sector have all weighed,” Deutsche Bank strategists wrote in note to clients, noting that a full-blown trade war between the U.S. and China was a major risk.

“In equities we see the recent correction as overdone, and the first quarter earnings season could act as the needed circuit breaker.”

(Newsmax wire services contributed to this report).

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Citigroup's Willem Buiter warns that if China and the United States actually tumble into a "serious trade war" it would drive the global economic recovery right into a financial brick wall.
citi, buiter, trade, war, global, recovery
365
2018-26-20
Friday, 20 April 2018 11:26 AM
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