Overview

• IMF Deputy Managing Director Gita Gopinath warns of a potential 'new Cold War' due to increasing economic fragmentation and tensions between the US and China.
• Gopinath suggests that the global economy could lose between 2.5% and 7% of its GDP if the world splits into two trading blocs, one led by the US and Europe, and the other by China and Russia.
• The IMF official highlights that direct trade links between the world's biggest economies are already being severed, with Mexico replacing China as America's top trading partner.
• Gopinath urges countries to protect the basic tenets of free trade, warning that escalating global tensions could threaten net zero or food security.
• She also suggests that the current system to resolve trade disputes through the World Trade Organisation is no longer fit for purpose.