MOSCOW, May 15. / TASS /. The direct effect the US-China has on the global economy will be seen later, Russia’s Economic Development Minister Maxin Oreshkin told reporters.
"The trade relations between the United States and China are a kind of an "anchor" element in the entire world trading system. It is clear that if we see a full-fledged trade war between these two countries, it will affect the whole world without exception," he told reporters.
"It is clear that despite all the current rhetoric and introduction of certain duties that have already been announced, de-facto these latest decision have no direct effect on trade," Oreshkin added.
This is due to the fact that it concerns only the goods which have not been shipped before the date when the new duties become effective, he said. There are few weeks to bring the situation back to normal, the minister noted.
"In this regard, the point of no return has not yet been passed. I think that the coming G20 summit in Osaka and the possible talks between China and the US that can take place there can be called such a point," the minister said.
"I repeat once again that, according to our estimates, the trade war will not have irreversible consequences before the G20 summit in Osaka. After that, the situation can, of course, develop under a negative scenario," Oreshkin stressed.
He noted that it is a full-fledged trade war between China and the United States with duties of about 25% that will destroy the value chain and the value added itself in the global economy. This, in turn, will affect the growth rate of the global economy, first of all industrial production, which will be under serious blow, Oreshkin said.
The impact of trade war on global GDP
"Under a negative scenario, the global economy may lose up to several percent of global aggregate GDP," Oreshkin said. How soon it may happen will depend on how intensive the trade war is, he said.
"This can happen quite quickly if the escalation is very serious. That is, we can immediately lose a few percent from the base trend. That does not mean negative values, but the growth may be 1-2% instead 3-3.5%," he explained.
Possible decline in prices for Russian exports
"It is clear that this whole story will have a negative impact on the demand for Russian products. This also applies to commodities, so this scenario, of course, will mean lower prices for key resources: oil, metals, coal - Russian exports," Oreshkin said.
In addition, there will be a deterrent effect on non-oil-and gas exports from Russia due to weakened global demand, he added.