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A Cold War-type rift is putting trade and investment at risk, a top IMF official has warned

As the world moves toward an increasingly bipolar order, the growing divide between US-led and China-oriented blocs is taking a toll on the global economy, as trade and investment flows are redirected along geopolitical lines in ways not seen since the Cold War. War no longer occurred.

After years of shocks, including the COVID-19 pandemic, countries are now “reevaluating their trading partners based on economic and national security considerations,” said Gita Gopinath, first deputy managing director of the International Monetary Fund.

In a speech Tuesday at Stanford University, the IMF official noted that while policymakers’ increasing focus on building economic resilience is not necessarily a bad thing, “we could see a broad retreat from global rules of engagement and with it a significant reversal of the achievements of economic integration” if the trend continues.

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