IMF Criticizes Joe Biden's Ramping Up Chinese Import Tariffs, Says US Should Work With China to Resolve Disputes

By Jace Dela Cruz

May 17, 2024 08:38 AM EDT

The International Monetary Fund (IMF) is urging the United States (US) to maintain its open trade system instead of imposing new punitive duties on goods from China.

TOPSHOT-US-CHINA-DIPLOMACY-APEC-SUMMIT — TOPSHOT - US President Joe Biden (R) and Chinese President Xi Jinping walk together after a meeting during the Asia-Pacific Economic Cooperation (APEC) Leaders' week in Woodside, California on November 15, 2023.
(Photo : BRENDAN SMIALOWSKI/AFP via Getty Images)

IMF Says US, China Should Work Together to Resolve Trade Tensions

The IMF encouraged the US and China to work together to resolve their trade tensions. This recommendation follows President Joe Biden's recent announcement of trade restrictions.

On Tuesday, Biden announced new tariffs on Chinese electric vehicles, solar cells, steel and aluminum products, and other goods. In a news briefing on Thursday, IMF spokesperson Julie Kozack said that trade restrictions could impair trade and investment, fragment supply chains, and provoke retaliatory measures.

She underscored that the IMF supports open trade policies, which have been vital to economic growth and stability. Kozack also cited the increase in trade restrictions in recent years, noting that they have grown from 1,000 in 2019 to around 3,000 in 2023.

She warned that these restrictions could lead to economic fragmentation or decoupling that "can be very costly for the global economy." Studies by the IMF show that global losses from such fragmentation could range from 0.2% to 7% of global GDP.

IMF Criticizes Joe Biden's Decision to Raise Tariffs on Goods From China

Julie Kozack criticized Joe Biden's decision to raise tariffs on Chinese goods. She warned that tensions between the two countries risk hurting global trade and growth. Instead, the IMF official suggested that the US should maintain open trade policies that have been vital to its economy and work with China to address trade tensions.

"With respect to the tariffs, our view is that the US would be better served by maintaining open trade policies that have been vital to its economic performance," Kozack said.

"We also encourage the US and China to work together toward a solution that addresses the underlying concerns that have exacerbated trade tensions between the two countries. And more broadly, we urge all countries to work within the multilateral framework to resolve their differences," she added.