CEO of ANZ, Shayne Elliott, says the need for trade will ensure the bubbling tensions between the world's two biggest economies won't result in the collapse of the global trading system.
The trade war that is brewing between the US and China is likely to negatively impact economic growth globally, a scenario that is “not good for anybody”, but the CEO of one of Australia’s big four financial institutions insists it’s not panic stations yet.
As ANZ chief, Shayne Elliott has overseen the bank’s shift in focus to corporate and institutional clients in Asia, which more closely aligns ANZ to the global trading system.
So he is well-positioned to argue that the need for trade is too strong for the international system governing it to be torn apart by Donald Trump and Xi Jinping’s tariff slapping.
“The reality is China’s still going to be importing iron ore, people are still going to be eating food and need to import dairy products and beef, and Australia and New Zealand and the rest of Asia’s still going to be importing cars and washing machines and all those things,” he told CNBC‘s Oriel Morrison.
“So there will be a fundamental need to continue trade.”
He says his bank has been left largely unaffected by the trade tensions thus far, but agrees that economic growth — particularly in countries that heavily rely on trade like Australia — is likely to take a hit if protectionism gathers steam.
“I don’t think businesses like any kind of conflict, trade war because it really raises the level of uncertainty and makes people really cautious,” Elliott added.
I don’t think businesses like any kind of conflict, trade war because it really raises the level of uncertainty and makes people really cautious.
Elliott’s comments follow those from Christine Lagarde, managing director of The International Monetary Fund, who told the Global Asia Institute that the global system was in danger of breaking down.
“That system of rules and shared responsibility is now in danger of being torn apart,” she said.
“This would be an inexcusable, collective policy failure.”