IMF warns US–China tensions pose major drag on global growth

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Krishna Srinivasan, the IMF’s Director of the Asia and Pacific Department (APD), said renewed tensions between the US and China present sizable downside risks to global growth.

In an interview with Bloomberg today, Oct. 17, he said that if these risks materialize through higher tariffs and supply-chain disruptions, global growth could fall by 0.3%. Additional flashpoints would also imply downside risks for China, he added.

Tensions have escalated in recent weeks as Washington broadened tech restrictions and proposed tariffs on Chinese vessels entering US ports, prompting reciprocal measures from Beijing.

While economic activity in Asia Pacific has held up despite bearing the brunt of U.S. tariffs and rising policy uncertainty, Srinivasan said the IMF remains concerned that trade frictions have yet to be resolved.