The International Monetary Fund (IMF) says the US-China Trade War is already having a negative effect on trade and business confidence in Asia, according to Reuters.
The trade war, which has waged since April 2017, could lead the IMF to cut its January forecast for global growth.
According to Changyong Rhee, director of the IMF’s Asia and Pacific Department, said Japan and South Korea could be among the countries hardest hit due to their reliance on trade with China.
Quoted in Reuters, Rhee said this: “Investment is much weaker than expected. My interpretation is that the confidence channel is already affecting the global economy, particularly Asian economies.
“We see global growth a little bit slower than we forecast in October.”
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In October, the IMF predicted the global economy would grow by 3.7%, a cut of 0.2% from its July prediction of 3.9%.
It expects Asia’s economic growth to slow to 5.4% in 2019 from 5.6% it is expected to grow by in 2018.
Hopes were raised in December 2018 following the G20 Summit in Buenos Aires, Argentina, when the US and China agreed to announce any fresh tariffs on each other’s goods for 90 days.
That was followed up on December 11 when US Treasury Secretary Steven Mnuchin and China’s Vice Premier Liu He confirmed they’d held talks on the possibility of a new trade deal.
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