The so-called ‘economic Cold War’ is extremely worrying, French business chief says

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The president of France’s main business lobby group said the current global trade war was “extremely worrying” and could reverse years of rising standards.

Speaking at a meeting of major business federations in France, MEDEF President Geoffroy Roux de Bezieux told CNBC’s Annette Weisbach that free trade had created “enormous wealth.”

“It has taken hundreds of millions of people out of poverty. The current, so-called ‘economic cold war’ is extremely worrying for us,” he said Friday, before adding “We call for more multilateralism.”

The U.S. has so far slapped a 25% tariff on $250 billion of Chinese goods, and Beijing has also raised tariffs on billions of dollars’ worth of American products. China said Thursday that the U.S. must lift all the tariffs placed on Chinese goods if there is to be a trade deal. This week, the U.S. government ratcheted up pressure on Europe by threatening tariffs on $4 billion of additional EU goods. Roux de Bezieux told CNBC that he was “very worried” about any escalation of the conflict toward Europe.

Also speaking to CNBC at the event Friday was Pascal Cagni, chairman of Business France who said President Trump’s targeting of European trade was a “clear concern.”

He argued that as the United States had retrenched, it had created an atmosphere which had led to a big cut in foreign direct investment into major European countries.

Cargi said that the world needed to find a middle way between the state capitalism of China and the new stance of the U.S on trade which was to be “very aggressive.” 

Meanwhile, Europe has seen “Yellow Vest” protests in France, a populist government in Italy and Brexit in the United Kingdom. MEDEF’s president said all were rooted in the “same phenomenon” where people didn’t feel included in the growth and prosperity.

Roux de Bezieux said that was the main theme of the B7 meeting in Aix-en-Provence and business needed to ensure that a greater part of the population enjoyed a rise in living standards.

Now watch: “Open and fair” trade is needed says French labor minister

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