Potential Increase in US Tariffs on Chinese Goods to Harm Russian Economy - Kremlin Aide
The possible increase of US tariffs on Chinese goods will decelerate global economy and provoke capital outflows from emerging markets, thus adversely affecting the Russian economy, Russian presidential aide for economy, Andrei Belousov, said on Thursday
MOSCOW (Pakistan Point News / Sputnik - 09th May, 2019) The possible increase of US tariffs on Chinese goods will decelerate global economy and provoke capital outflows from emerging markets, thus adversely affecting the Russian economy, Russian presidential aide for economy, Andrei Belousov, said on Thursday.
On Sunday, US President Donald Trump said that he would increase import tariffs on $200 billion worth of Chinese goods from 10 to 25 percent. The measure is set to go into effect on Friday. Subsequently, US media expressed concerns that the Chinese side might cancel the upcoming trade talks in Washington, but the Chinese Commerce Ministry said on Tuesday that Vice Premier Liu He would visit the United States on May 9-10 to continue consultations even despite Trump's threats.
"Undoubtedly, it will have an adverse impact on the global economy. Accordingly, the impact on the Russian economy will be twice as strong. Firstly, due to the fact that the the global economy growth will most likely decelerate. And secondly, the capital outflow may begin. These two factors will, in principle, have a negative impact," Belousov told journalists.
He noted that the most important thing in this story is that the world trade rules were falling apart from both sides.
"This is now being discussed at the G20. It seems that even the WTO [World Trade Organization] gave up on it, the IMF [International Monetary Fund] is also in a rather deep crisis, because they have not agreed on quotas. All this is very sad and has negative consequences not only for our country, but also for all countries," Belousov said.
The ruble may also weaken if the United States raises duties on a number of Chinese goods, but the Russian authorities are ready for this, he added.
"Of course, this can all lead [to the weakening of the ruble]. I don't see big problems in a slight weakening of the ruble, because it objectively enhances the competitiveness of our economy. Much more dangerous are the unpredictable volatility of the ruble - this is what the Central Bank and the government, primarily the Finance Ministry, are now fighting rather successfully. The risks are not very big yet, they are not great, but, nevertheless, they always exist, and I think we will cope with this misfortune," Belousov said.