The United States and China are negotiating behind the scenes to ease trade tensions, the head of the OECD said Friday, stressing that ‘nobody wins’ in a high-level trade war.
Angel Gurria said Chinese officials had told him this week that they were talking to their US counterparts, despite official denials.
‘Everybody is very alarmed by these announcements (of tariffs), but at the same time, they are talking… there seems to be a series of conversations going on,’ added Gurria, who heads the Organisation for Economic Cooperation and Development.
On Thursday, China’s Commerce Ministry spokesman Gao Feng told reporters that ‘up to now China and the US have not carried out negotiation at any level on the trade frictions’.
China has warned it will hit back at any US protectionist moves after President Donald Trump last week threatened fresh levies on billions of dollars of Chinese goods.
‘There has not yet been a single increase in tariffs adopted by either side,’ noted Gurria.
‘Nobody wins in a war when the largest economies in the world are involved,’ added the former Mexican finance minister.
He also warned there would be ‘negative spillover effects’ from any trade war between the US and China. ‘It’s not just them’ that would be hit, he cautioned.
The threat of the trade war comes as the global economy has finally reached the level of growth – four percent – achieved before the debt crisis sparked by the collapse of US investment bank Lehman Brothers in 2008, noted Gurria.
‘It took 10 years to get back to the level of growth in the world economy from before the crisis. This is the size of the crisis. This is the impact of the crisis. This is how broad and deep the crisis was,’ said Gurria.
‘But right now, we are back where we were before the crisis in 2008.’