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TEHRAN, March 7 - The head of Australia’s central bank is upbeat about domestic economic growth despite a disappointing end to last year, but fears the specter of a trade war calling threatened U.S. tariffs “highly regrettable.”
TEHRAN,Young Journalists Club (YJC) - President Donald Trump intends to slap duties on imports of steel and aluminum, a pledge that has met with warnings of retaliation from the rest of the world and spooked financial markets.
Reserve Bank of Australia (RBA) Governor Philip Lowe’s comments on Wednesday come as data showed growth in Australia’s A$1.8 trillion ($1.40 trillion) economy slowed last quarter as bad weather hit exports, although a pickup in spending helped it extend its 26-year run without recession.
Lowe slammed the tariffs on Wednesday at a business summit in Sydney, saying a tit-for-tat move from other countries would be very damaging.
“The recent announcement on tariffs by President Trump was highly regrettable,” Lowe said, strong words for a typically measured policymaker. “History shows protectionism is bad.”
Australia’s export-driven economy relies heavily on international trade and capital. It is particularly vulnerable to a U.S.-led trade war, which threatens the outlook for global growth and the demand for commodities.
Those concerns have been reflected in global financial markets, with investors dumping shares for the safety of gold, cash, the Japanese yen and Swiss francs.
The Australian dollar, considered a risky asset, has been volatile since the start of February, losing 3.6 percent that month alone.
On Wednesday, it slipped 0.6 percent to go as low as $0.7772, not far from a recent two-month trough of $0.7713. It was last down 0.4 percent at $0.7797.
To add to the uncertainty a key advocate for free trade in the White House announced his resignation on Wednesday, fanning fears Trump would go ahead with tariffs and risk a trade war.
Source: Reuters
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