Market gyrations in response to tariff threats from political leaders show that financial traders do not grasp the intricacies of global trade, a senior UN official said Wednesday.

Arancha Gonzalez, who heads the International Trade Center (ITC), told reporters that traders have proven too sensitive in the face of "big headline announcements" and "shooting from the hip" bluster about possible protectionist moves in major economies.

"I think traders know about the global economy, but international trade procedures and rules may be a little bit too detailed for them at this point," she added.

Gonzalez, who runs a body set up by the United Nations and World Trade Organization to advise businesses, did not downplay the real impact of market swings triggered by back-and-fourth trade war threats in Washington and Beijing in recent weeks.

But she said markets have been "overreacting" to such rhetoric because they "do not understand all of (the) intricacies," especially the long journey between the announcement of a trade sanction and its implementation.

- 'Only for the weak'? -

Gonzalez said the multilateral trading system is indeed facing significant dangers, and urged global leaders to emphasise its successes in order to move forward.

"I worry a lot about the World Trade Organisation, and I worry because I see a tendency today to exaggerate its faults and ignore its success," she said. "This is not good for multilateralism."

The 164-member WTO has become one of US President Donald Trump's favourite targets.

He has called it a "disaster," a "catastrophe," and generally blamed it for giving unfairly favourable treatment to China at US expense.

"We focus on what doesn't work, and we throw away all the things that work, including all the things that make international trade work every day for everybody on this planet," Gonzalez said.

Without naming Washington, Gonzalez voiced concern over the notion that working through the multilateral system is "only for the weak," and that nations seeking to thrive in trade needed to face their rivals themselves.

Trump's trade team has expressed preference for bilateral deals while saying it would work within the WTO when it wants to and ignore WTO rulings when they violate US interests.

"I do not think that the WTO is antinomical with US interests," Gonzalez said. "The WTO is in the interest of the United States like it is in the interest of Japan like it is in the interest of China like it is in the interest of the EU."

Draghi sees little impact from trade tensions -- for now
Frankfurt Am Main (AFP) April 11, 2018 - European Central Bank chief Mario Draghi on Wednesday said the US-China trade spat has so far had little impact on the eurozone economy, but warned that the risk of further retaliation was a key concern.

"So far the direct effects of tariffs that have been imposed or announced to be imposed are not big," Draghi told students at an event in Frankfurt.

But the top central banker warned that the world had only seen "the first round" in the row between the United States and China.

"The key issue is retaliation," he warned.

US President Donald Trump last month sparked fears of a potentially devastating trade war between the world's top two economies after threatening massive tariffs on Chinese imports.

Heated rhetoric on both sides has prompted warnings of tit-for-tat measures against hundreds of billions of dollars worth of goods.

But Chinese President Xi Jinping on Tuesday soothed world markets with a conciliatory speech pledging to further open up the country's economy, ease auto tariffs and take action on intellectual property rights, all major US concerns.

In response, Trump tweeted that he was "Very thankful for President Xi of China's kind words", adding "We will make great progress together!"

International Monetary Fund chief Christine Lagarde also waded into the US-China stand-off on Wednesday, warning that protectionist trade policies would undermine global growth.

Draghi said the greatest threats to the eurozone's robust recovery came from potential new barriers to trade and geopolitical risks such as the diplomatic tensions between the European Union and Russia, and the worsening security situation in the Middle East.

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Trump sees trade deal with 'friend' Xi
Washington (AFP) April 8, 2018
US President Donald Trump on Sunday said he sees an end to the escalating trade dispute with China, after tit-for-tat retaliatory tariffs and threats that rattled markets. "China will take down its trade barriers because it is the right thing to do," Trump said in a tweet. "Taxes will become reciprocal & deal will be made on Intellectual Property. Great future for both countries!" He added that he and China's President Xi Jinping "will always be friends, no matter what happens with our dispu ... read more