IMF Chief Kristalina Georgieva Brushes Off Trump's Trade War Threats: 'Trade Is Like Water, You Put In An Obstacle, It Goes Around It'

As tensions rise between the U.S. and China over fresh tariff threats, International Monetary Fund chief Kristalina Georgieva is urging calm, arguing that global trade is far more resilient than it appears.

Georgieva Dismisses Fears Of A US-China Trade War

On Friday, speaking at Fortune's Most Powerful Women Summit in Washington, D.C., Georgieva downplayed concerns over President Donald Trump's threat of a 100% tariff on Chinese exports.

She called Beijing's new export controls "extraordinarily aggressive" and "hostile." 

"Frankly, this thing that trade is dead is completely overstated," she said. "Trade is like water. You put in an obstacle, it goes around it."

Global Trade Diversifies Despite Tariff Tensions

Georgieva highlighted that most nations have avoided retaliatory measures, with 188 out of 191 IMF member countries choosing not to respond to tariffs. 

Instead, countries are turning to regional partners, especially in Southeast Asia and the Gulf, to maintain trade growth. 

Even China has seen overall exports rise 8.3% in September, boosted by stronger ties with the European Union, despite a 27% drop in shipments to the U.S.

She also praised the private sector's adaptability, noting, "The private sector is more agile, more adaptable… an anchor of stability because you adapt, you just keep doing it."

See Also: China's Silence Is Scarier Than Tariffs—5 Ways It Could Hit Trump Hard

China-US Trade War Escalates As Tariff Threats And Export Controls Clash

China did not back down in its trade dispute with the U.S., calling on President Trump to withdraw his threat of a 100% tariff and other export control measures following stricter restrictions on rare earths, reported AP News on Monday.

Trump issued the tariff threat on all Chinese imports but took a more conciliatory tone. China's Ministry of Commerce said the U.S. was "severely damaging the atmosphere of trade negotiations."

At the same time, Foreign Ministry spokesman Lin Jian warned that China would take resolute measures if the U.S. continued its path.

U.S. Treasury Secretary Scott Bessent posted on X on Monday, stating that Trump remained scheduled to meet with Chinese President Xi Jinping in South Korea later in October to try to de-escalate tensions.

Nobel Prize-winning economist Paul Krugman warned that Trump's "Liberation Day" tariffs had backfired, giving China the upper hand.

He said the tariff announcements six months earlier were "a massive betrayal of the world’s trust" and noted Trump appeared surprised by retaliatory measures, including China's new export controls on rare earths vital to U.S. industry.

On Sunday, Vice President JD Vance asserted that the U.S. held a stronger position than China and expressed optimism that Beijing would take a "reasonable" approach.

Read More:

• Trump's Tariff-Revenue Checks Could Spur ‘Weird Feedback Loop,' Warn Economists—White House Claps Back At ‘Unsubstantiated Assumptions'

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Shutterstock/Gints Ivuskans