IMF: Trade war escalation could trigger global financial crisis

Complacent investors

Tom Eckett
clock • 2 min read

The International Monetary Fund (IMF) has warned an escalation in trade tensions between the US and China could lead to a global financial crisis.

The IMF's latest Global Financial Stability report said near-term risks had increased over the past six months but added investors were "complacent" to the potential for a market correction. In particular, the report said global growth would be "significantly" harmed by any further increase in trade tensions. Last month, Washington imposed a 10% tariff on around $200bn worth of Chinese imports with President Donald Trump threatening to increase this to 25% by the start of next year if no solution was found. Beijing retaliated with an additional $60bn of imports. "A further escalati...

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