Donald Trump’s trade war will have a ‘substantial’ impact on the UK and global economies, the Governor of the Bank of England has warned.
Andrew Bailey told MPs that Britain must ‘dig in’ after tariffs levied by the US President on America’s major trading partners sparked tit-for-tat retaliation.
And he said Trump should be using ‘multilateral’ discussions to settle gripes over trade rather than picking fights with individual countries.
It came amid a further twist in Trump’s plans. The US President has imposed duties of 25 per cent on imports from Mexico and Canada and 20 per cent on China after he claimed America was being treated unfairly.
And he has threatened to turn his attention to the European Union next.
But yesterday Trump granted a one-month exemption on imports from Mexico and Canada by America’s car manufacturers, whose supply chains criss-cross the three countries.
Concerns: Bank of England governor Andrew Bailey (pictured) said Britain must ‘dig in’ to face up to the threat of Donald Trump’s trade war
The UK for now looks set not to fall foul of any direct tariffs.
But Bailey told MPs on the Treasury select committee: ‘It really is a big episode. There is a major shift going on there. We have to take it very seriously.
‘We have to dig in and say, “How do we address these issues satisfactorily?” We can’t ignore them, frankly.
‘The risks to the UK economy and to, indeed the world economy, are substantial.’ He criticised the White House, saying: ‘If you think the world economy is somehow out of balance, the place to address those balances is in a multilateral forum, not by bilateral action.’
Bailey said it ‘would be very damaging for the world’ if the US were to leave the International Monetary Fund and the World Bank – both suggested by some of Trump’s allies.
The comments came a day after Chancellor Rachel Reeves said even if Britain was not hit directly with tariffs, it would still mean slowing global trade and GDP growth, and higher inflation.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .