Please try another search
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.
The U.S.-China trade tensions squeezing the global economy will likely play out for decades to come, Australia’s top bureaucrat said.
Hearkening back to former U.S. Treasury Secretary Hank Paulson’s 2018 warning of a looming “economic Iron Curtain,” Martin Parkinson told the Asia Society Summit in Sydney Thursday that “the curtain has descended further” and the fallout will have a significant impact on Asian economies -- including Australia.
“This is not something that is with us for a year or two, it’s with us for decades and decades,” said Parkinson, who heads the Department of Prime Minister and Cabinet.
The over-reliance on supply chains is a particular thorn in the side of the Asian growth model, he said, where the current climate of increasing tariffs will stymie export-led economies. Technological advances also pose a challenge for these nations by wiping out the manufacturing sector, which was instrumental in lifting up the Asian Tigers, Parkinson said.
“Technology may even be one reason why western countries are finding it difficult to lift inflation,” he added. “Nowadays, you simply do not need as much capital to deliver the same output in manufacturing as we’ve been historically used to.”
He advocated for improvement to the international rules-based trading system to reinvigorate confidence and guard against falling foreign direct investments across the region.
“The answer to unacceptable trade practices is more effective rules, not no rules,” he said.
Still, he indicated that better commitment and more stringent rules may be no panacea to the economic outlook.
“Even if the U.S. and China drop all recently imposed tariffs, confidence in the economic, rules-based order has already been damaged,” he said.
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.