Trade wars 'could shipwreck global economy'

Imports and Exports | | MIC Customs Solutions |

Trade wars could be more damaging than most people realise, Mark Carney has said.

The trade wars resulting from US president Donald Trump's protectionist tactics could 'shipwreck' global economic growth, governor of the Bank of England Mark Carney has warned.

In a speech at the UK's Local Government Association, he said the effects of the spats with China, the European Union and Mexico are being underestimated.

However, he pointed out, they are coinciding with sharp declines in trade, manufacturing and production, with the quality of economic growth declining as a result.

"The longer current tensions persist, the greater the risk that protectionism becomes the norm. Once raised, tariffs are usually slow to be lowered," Mr Carney commented.

His remarks came after Mr Trump agreed to restart talks with China following a meeting with Chinese president Xi Jinping at the G20 conference in Japan last week.

However, Mr Carney said this has occurred before, only for negotiations to once again stall amid more tit-for-tat levies.