Bank of England's Bailey urges US to step back from trade wars

Bank of England Governor Andrew Bailey. (Source: Bloomberg)

Bank of England Governor Andrew Bailey urged the United States on Wednesday to settle its concerns about the global economy through dialogue rather than the kind of import tariffs that U.S. President Donald Trump has imposed this week.

Bailey, speaking to British lawmakers, said he had addressed the importance of open trade at a meeting of Group of 20 central bankers and finance ministers last week in South Africa which was not attended by new U.S. Treasury Secretary Scott Bessent.

”If you think the world economy is somehow out of balance, the place to address those balances is in a multilateral forum, not by bilateral action,” Bailey said.

Trump ordered 25% tariffs on imports from Mexico and Canada which took effect on Tuesday, along with fresh duties on Chinese goods, raising fears of a hit to global economic growth as well as a rise in inflation in the United States.

Bailey, speaking to the Treasury Committee in parliament, said China was running a ”very large” current account surplus and he highlighted the ”quite radical” announcement by Germany – another big surplus country – of a major infrastructure and defence investment plan on Tuesday.

”The US has to answer the question: yes, you’ve got a current account deficit. You’ve also got a very big fiscal deficit, and you’re financing that current account by external capital,” he said.