The IMF warns of the repercussions of the US-China competition on the world economy

International Monetary Fund Managing Director Kristalina Georgieva has warned of risks to the global economy from the competition between China and the United States. She said the tariffs imposed by former US President Donald Trump on Chinese imports are counterproductive. "We may be walking without feeling toward a world that is poorer and less secure as a result," Georgieva said in an interview with the Washington Post published on Saturday.

Born and raised in Bulgaria, Georgieva added, "I lived through the first Cold War on the other side of the Iron Curtain. Yes, it is very cold there... and to plunge a new generation into a second Cold War... is absolutely irresponsible." President Joe Biden has yet to resolve the major issue of tariffs, which his predecessor imposed on Chinese goods, which cost US importers billions of dollars.

Georgieva commented on the Trump-era cartoons, saying, "It is important to think carefully about the measures and other countermeasures that may result, because once you take the genie out of the lamp, it will be difficult to bring him back."

Biden's team has been struggling for months in various ways to reduce the costs of duties imposed on Chinese imports, while the administration has been trying to curb inflation.

Informed sources had previously told Reuters last August that China's military exercises around Taiwan prompted Biden administration officials to rethink whether to cancel some fees or impose other fees on Beijing. Relations between the world's two largest economies have been strained in recent years over issues including tariffs, Taiwan, intellectual property, cyber security and the origin of the coronavirus.

Has the United States lost the trade war with China?

Recent data shows that Chinese exports abroad witnessed a record rise in 2021, in exchange for a record deficit in the US trade balance. Does this mean the failure of the US trade war against the Asian giant?

In his report, published by the Russian newspaper "Expert", writer Igor Nedelkin says that the trade war between the two countries began a long time ago, but former US President Donald Trump inflamed it during his presidency by adopting a strict policy against Beijing, and trying to force it to sign a trade agreement under which it increases the volume of its imports from United States of America.

In theory, this strategy could have reduced the US trade deficit, but the election defeat of Donald Trump, the outbreak of the Corona pandemic, and the difficulty of fulfilling the commitments made under the joint trade agreement with China have all deepened the crisis. American economy. According to the author, the results of the third quarter of this year and new data on the volume of foreign trade for both countries show who is the winner and who is the loser in this trade war.

Record growth of Chinese exports

At the end of last week, China said that despite the difficulties it has faced recently, namely the shortage of semiconductors, the crisis in the construction sector, and electricity supply problems, the trade surplus registered a record high in October on the back of export growth.

As a result of the increase in the volume of exports compared to imports, the monthly trade balance reached a record level of 84.5 billion dollars. Although the growth of the Chinese economy has slowed in recent months due to the real estate crisis, these figures support Beijing's steps to boost the value of the yuan.

The growth of Chinese trade throughout this year has also continued to be higher than it was before the epidemic, and the volume of exports between January and October 2021 has exceeded the figures recorded over the past year. The geographical indicator for exports indicates the growth of sales to the European Union and the United States at record rates compared to the rest of the economic partners.

China's trade surplus with the United States in the first 10 months of this year rose to 2.08 trillion yuan ($325 billion), compared to 1.75 trillion yuan in 2020.

As for the United States, data released in the past days shows a record trade deficit despite Trump's strict tariff policy on a wide range of Chinese goods, measures that are still in force until now. In October of this year, the US trade deficit reached its highest level, estimated at $80.9 billion, double the figure recorded before the outbreak of the Corona virus.

Boolean pointers

The writer believes that China's record trade indicators are completely logical, because Beijing was able to adapt quickly to the Corona virus and took advantage of the beginning of the global recovery from the pandemic to raise the volume of its exports abroad at a faster pace than competing countries, which was positively reflected on the flow of foreign currencies.

According to the latest data, China's foreign exchange reserves at the end of October amounted to $3.22 trillion, and this gives it plenty of room to maneuver in the event of some economic turmoil, similar to what it experienced in the past period.

But Bloomberg Agency experts believe that Chinese exports may decline in the next few months, in light of the decline in demand for goods and the rise in demand for services, as well as the readiness of other countries in the Asian region to resume production operations, which will create more competition for Chinese products.

This is what America will lose if the trade war with China does not subside

A report published by the US-China Business Council revealed that a "even moderate" reduction in tariffs imposed on Chinese products would have a beneficial effect on economic growth and employment in the United States. The council, which includes 200 US companies cooperating with China, said, "In our perception of the de-escalation scenario