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Rudd joins former world leaders to implore US, China to not start another Cold War

The tariff war between the US and China has hurt trade, cut world growth and added to consumer prices in a trend that is also slowing the Australian economy.

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“Beyond trade, we are anxious about the wider strategic impact of any further decoupling of the Chinese and the American economies, particularly in technology and finance,” the group wrote.

“Such a decoupling would present a long-term threat to global peace and security. It would also effectively constitute the first step in the declaration of a new Cold War.

“As with the last Cold War, many nations would be forced to choose between the two powers. And that is a choice none of us wants to make.”

Mr Trump said last month his trade war with China may not be resolved before the presidential elections in November next year.

Prime Minister Scott Morrison called on China to “take every opportunity” to settle the trade war with the US during a visit to Washington in September, after directly urging Mr Trump to do the same to avoid economic damage to Australia and the region.

But he supported the Trump administration’s plan to hold out for a sweeping trade agreement with China rather than accept a partial deal.

The group of former leaders has urged US President Donald Trump and China's leader Xi Jinping to find a solution.

The group of former leaders has urged US President Donald Trump and China’s leader Xi Jinping to find a solution.Credit:AP

The group of former prime ministers and presidents urging the pair to get back the negotiating table also includes François Fillon of France, Joe Clark of Canada, Enrico Letta of Italy, Jan Peter Balkenende of the Netherlands, Felipe Calderón and Ernesto Zedillo of Mexico, and Han Seung-soo of South Korea.

“Given our collective experience, we are not naive about the inherent complexities in negotiating international trade agreements,” the group wrote.

“The 18-month trade war between the United States and China represents the single greatest threat to global economic growth today.”

The International Monetary Fund, in a report released on Saturday morning, has also warned further escalation of the trade war between China and the United States was one of the global economy’s biggest risks.

The 18-month trade war between the United States and China represents the single greatest threat to global economic growth today.

The group letter

It said businesses had already reduced investment plans because of the dispute with signs it was now spilling over into the flow of technology, which could have “wide-ranging” consequences for productivity.

“An imposition of new bilateral trade barriers between the United States and China would have widespread repercussions, with a lasting negative impact on global output, including through the disruption of global value chains,” it warned.

US Commerce Secretary Wilbur Ross on Thursday night blamed China for a “massive” dislocation in the global economy while emphasising the strength of the trade and investment between the US and Australia at a speech in Sydney.

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