The governor of the Bank of England has warned Donald Trump that further escalation of US trade disputes around the world would damage the American economy most, with potential to lower US growth by around 5%.
Mark Carney said the tariffs announced so far by the president on goods from China, the EU and several other countries, combined with their retaliatory measures, had already slowed the global economy.
Carney believes any additional measures would have a significantly more damaging impact. Delivering a speech in Newcastle on Thursday, he said: “At the moment, protectionism is largely just talk (and tweets). But what if rhetoric becomes reality?”
Revealing forecasts made by Threadneedle Street, the governor said the American economy would suffer a 2.5% drop in GDP as a result of falling trade volumes alone over three years, should the White House increase US import tariffs by about 10 percentage points on all of its trading partners.
