PARIS, May 7 — The head of the International Monetary Fund said today that fresh trade tensions between the United States and China were the main threat to the world economy.

"Clearly the tensions between the United States and China are the threat for the world economy,” Christine Lagarde told journalists at a conference in Paris, adding that recent "rumours and tweets” made an agreement between the countries less likely. 

President Donald Trump jolted global markets yesterday by threatening on Twitter that tariffs already imposed on US$200 billion (RM830 billion) in Chinese exports to US would more than double to 25 per cent on Friday from their current level of 10 per cent.

Also speaking at the Paris Forum event, French Economy Minister Bruno Le Maire warned about the impact of a trade war between the world’s two biggest economies.

"We are following the current negotiations very closely between China and the United Staters and we want them to respect the principals of transparency and multilateralism,” he said.

He called on the two sides to "avoid taking decisions that would threaten and would undermine global growth in the months ahead.”

"Increasing tariffs is always a dead-end and a negative decision for the whole world, for the United States, for China, for the eurozone, for Europe and world growth,” he said.

China said today its top trade negotiator will visit the United States for talks with his American counterparts this week.

The countries have been locked in talks to resolve tensions that have seen both of them impose tariffs on goods worth US$360 billion.

Treasury Secretary Steven Mnuchin has described the negotiations as 90 per cent complete but told reporters that in recent days the talks went "substantially backward”, which he blamed on China reneging on previous commitments. — AFP