Dialing back globalization and increasing protectionism would undermine decades of economic progress around the world, Bank for International Settlements head Agustín Carstens said Saturday.
Speaking to an audience of global central bankers including top Federal Reserve officials, Mr. Carstens zeroed in on President Trump’s trade policies as an example of the sort of measures that threaten to drive up inflation and unemployment in the U.S. and around the world. He also cited the U.K.’s exit from the European Union and nationalist movements in parts of Europe.
“It’s paradoxical that the United States is starting to put obstacles in the road at a time when its economy is firing on all cylinders,” said Carstens, general manager of the BIS, which serves as a central bank for the world’s central banks.
“But in the long term, protectionism will bring not gain, but only pain. Not just for the United States, but for us all,” said Carstens, who previously served as chief of Mexico’s central bank.
Uncertainty over U.S. trade policy has become a growing concern of policy makers at the Fed and a major subject of discussion on the sidelines of its annual symposium in Jackson Hole, Wyo. Since the beginning of this year, the Trump administration has imposed tariffs on tens of billions of dollars’ worth of imports from a host of countries, including close U.S. allies and key trading partners like China.
An expanded version of this article appears at WSJ.com
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