IMF’s Lagarde: Global trade marked by lack of trust

A brewing international trade war has the potential to derail unprecedented growth in the global economy, according to Christine Lagarde, managing director of the International Monetary Fund.

“I’m overall a bit disappointed with the evolution of trade, the trade framework around the world,” Lagarde told FOX Business’ Liz Claman during an interview Thursday. “Trade and investments both have been driving the economy and contributing significantly, more than in the past, to the growthline we are seeing.”

World economic growth is currently at 3.9%, according to the IMF. But trade tensions after President Donald Trump’s call for tariffs could hinder that growth, Lagarde warned.

Although both the U.S. and China insist they aren’t involved in a trade war, relations between the two largest economies have turned increasingly tense, with some retaliation from Beijing after the Trump administration announced tariffs.

“We are going to dent what is such a precious good in the economy, which is trust,” Lagarde said.

She suggested that countries hold multilateral talks to sort issues surrounding the protection of intellectual property, the subsidization of state-owned property and the transfer of technology.

On Tuesday, the U.S. told the World Trade Organization that while it had agreed to discuss with China the Trump administration’s plans to slap tariffs on Chinese goods, officials didn’t yield on their argument that the tariffs are justified, according to the Associated Press.

“It’s something that needs to be talked about,” Lagarde said. “And not just talked about; we need to see measures, we need to see changes.”