Lagarde Flip-Flops Again On Brexit, Warns Of "Disastrous" Trump-Style Protectionism
By Tyler Durden
Submitted by Michael Shedlock via MishTalk.com,
Ahead of the vote on Brexit, IMF head Christine Lagarde warned of a prolonged period of uncertainty.
After the vote, Largarde said Brexit provided the EU a better opportunity for reform.
Today Largarde is certain of disastrous consequences if another large county turns protectionist. In doing so, she pointed her finger at Donald Trump.
Lagarde Points Finger at Trump
Please consider Lagarde Warns Trump-Style Protectionism Would Hit World Economy.
Britain’s vote to leave the EU is already casting a shadow over international growth, the International Monetary Fund chief said in an interview, adding that the imposition of new trade barriers in another large economy could have ruinous effects.
“I think it would be quite disastrous, actually. Well I don’t think I should say disastrous because that is an excessive word and I should refrain from excessive words. But it would certainly have a negative impact on global growth,” she told the Financial Times.
[Mish Comment: So is it quite disastrous or simply negative? Her meaning is uncertain]
Any uncertainty surrounding a Trump presidency would probably yield more instability in financial markets, similar to the upheaval in the wake of last month’s UK referendum, she said in response to a question. But the IMF chief took care to avoid singling out any politician or referring to Mr Trump by name.
[Mish comment: Lagarde took care to avoid singling out Trump, while singling out Trump]
Ms Lagarde said “waves of protectionism” in the past had “preceded many wars” and that protectionism “hurts growth, hurts inclusion and hurts people”.
Ms Lagarde said she did not want to get involved in the political debate in the US, the IMF’s biggest shareholder. But she made clear her dim view of the policies of Mr Trump, who has proposed punitive tariffs on goods from China and Mexico and ripping up US trade pacts such as the North American Free Trade Agreement.
[Mish comment: Lagarde does not want to get into the political debate in the US, but hands Hillary campaign talking points on a silver platter]
The IMF’s assessment of the impact of the Brexit vote on the UK economy depends heavily on what sort of trade relationship with the EU a new government would be able to negotiate, she said.
Should a deal preserve access to the single market — such as Norway now enjoys — then the UK economy would be only 1.5 per cent smaller by 2019 than would be the case if Britain remained part of the EU. Were a deal to lead to the UK’s access to the EU’s 27 other economies being subject to tariffs under World Trade Organisation rules, it would cost the UK 4.5 per cent growth.
The IMF had not modelled the economic impact of a scenario in which the UK’s exit from the EU drags on and uncertainty continues for a year or more, Ms Lagarde said, but the political crisis set off by the vote could make such events likely.
[Mish comment: …read more
Source: Lagarde Flip-Flops Again On Brexit, Warns Of "Disastrous" Trump-Style Protectionism
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