US-China trade war draws rebuke from world leaders at UN event

Heads of state gathered on the sidelines of the United Nations General Assembly in New York on Monday had more on their mind than North Korea’s nuclear program and impending US sanctions on Iran: the impact of a global trade war.

Leaders from Latin America, Africa and Asia expressed concerns about rising tensions between the world’s two largest economies after Washington and Beijing levied billions of dollars in additional tariffs on each other and signalled little inclination for productive talks until after the US midterm elections.

"The rise of trade protectionism threatens the multilateral trading system that was agreed upon in Marrakesh in 1994 as well as in Doha in 2001," President Cyril Ramaphosa said at the Council on Foreign Relations on Monday.

"We need to strengthen the rules-based international trading system and move with speed to transform other multilateral institutions and global governance structures to be in line with the current realities of the 21st century."

Trade concerns are seldom raised at the annual UN General Assembly, which attracts nearly 200 world leaders more focused on domestic political issues and major global crises such as the war in Syria and the refugee crisis in Europe. But trade appears to be breaking through.

The International Monetary Fund warned in July that global economic output would be 0.5% less in two years if the US follows through on all its tariff threats, other countries retaliate and tightening financial conditions lower business investment.

Argentine President Mauricio Macri told Bloomberg that friction between the US and China was among the factors this year to hurt emerging markets, including his nation.

Meanwhile, a senior South Korean official said he believes the trade conflict will go on for several decades as both countries continue to misjudge each other.

It wasn’t all bad news for trade. A day before he addresses the General Assembly, President Donald Trump finally signed a revised trade pact with South Korean President Moon Jae-in that the White House opposed in its original form under the Obama administration.

Still, trade analysts say it will have a limited impact as Trump limited the scope of talks by declining to invoke US trade law that would have required congressional approval on a final deal.