China/US standoff not the only culprit in global slowdown

There’s a lot more to the global trade slowdown than the two-year-old tariff standoff between China and the United States, according to Laurence Boon, chief economist at the Organisation for Economic Development (OECD). Presenting the latest OECD Economic Outlook in Paris recently, Boon stated ““It would be a mistake to consider that low growth is due to temporary factors that can be addressed with monetary or fiscal policy; the issues are structural”. In his comment on the outlook Boon says “trade and investment are also structurally changing, with digitalisation and the rise of services, but also with geopolitical risks. “The rise in trade restrictions is nothing new. “About 1 500 new trade restrictions have been implemented by G20 economies since the global financial crisis in 2008. “Yet, the past two years have seen a surge in traderestricting measures and an erosion of the rules-based global trading system, which is deep-rooted. “Coupled with rising government support across a range of sectors, this induces disruptions in supply chains and reallocations of activities across countries that both exert a drag on current demand by reducing incentives to invest and undermine medium-term growth.