The Organisation for Economic Co-operation and Development (OECD) yesterday warned that protectionist trade measures pose a major risk to the world economy, just weeks before US president-elect Donald Trump is to return to the White House next month.
The Paris-based OECD did not name Trump in its updated analysis of the world economy, but it was abundantly clear that the organization was warning about Trump’s possible tariff measures on US trading partners.
While the OECD raised its global growth forecast to 3.3 percent next year, it said that “greater trade protectionism, particularly from the largest economies” poses a “downside risk” along with geopolitical tensions and high public debts.
Photo: AFP
“Increases in trade-restrictive measures could raise costs and prices, deter investment, weaken innovation and ultimately lower growth,” the OECD said in its economic outlook.
“Further increases in global trade restrictions would add to import prices, raise production costs for businesses and reduce living standards for consumers,” it added.
A recent study by the Roland Berger consultancy calculated the cost of the US measures, and likely countermeasures by China and the EU, at more than US$2.1 trillion through 2029.
Trump is far from the only risk in terms of protectionist measures. A spat has also broken out between Brussels and Beijing after the EU imposed import tariffs on Chinese electric vehicles. China has retaliated with tariffs on EU brandy, including cognac.
The OECD sees the US economy expanding 2.4 percent next year, up from its September forecast of 1.6 percent growth. It also raised its forecast for the UK’s growth next year 0.5 percentage points to 1.7 percent due to higher public spending planned by the new Labour Party government.
China’s economy is expected to expand 4.7 percent next year, an increase of 0.2 percentage points, while India’s growth forecast was raised 0.1 percentage points to 6.9 percent.
However, France and Germany saw 0.3 percentage point cuts to their growth forecasts to 0.9 percent and 0.7 percent respectively, as both countries face political crises amid mounting fiscal pressure, the OECD said.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
Taiwanese artificial intelligence (AI) server makers are expected to make major investments in Texas in May after US President Donald Trump’s first 100 days in office and amid his rising tariff threats, Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA, 台灣電子電機公會) chairman Richard Lee (李詩欽) said yesterday. The association led a delegation of seven AI server manufacturers to Washington, as well as the US states of California, Texas and New Mexico, to discuss land and tax issues, as Taiwanese firms speed up their production plans in the US with many of them seeing Texas as their top option for investment, Lee said. The
RSS