The South Korean economy is expected to grow 2.9 percent this year, lower than an earlier estimate of three percent The International Monetary Fund said this week the growing trade confrontation is the ‘greatest near-term threat to global growth’ SEOUL: South Korea’s finance minister warned that an all-out trade war between the US and China would have grim implications for the country, as he lowered this year’s growth outlook Wednesday. The world’s 11th largest economy is expected to grow 2.9 percent this year, lower than an earlier estimate of three percent, Kim Dong-yeon said, citing slowing demand at home and abroad as well as rising unemployment. The latest estimate is also lower than last year’s figures, when the export-reliant economy expanded 3.1 percent, and comes as the South’s top two trading partners China and the US engage in a bitter spat that has seen them impose hefty tariffs on billions of dollars in goods. “The economic situation down the road does not seem to be bright,” Kim told reporters. “The situation may get worse if anxiety in the international financial markets spreads due to the US-China trade dispute... and market and corporate sentiment does not improve,” he said. Overseas shipments account for more than half of the South’s economy, with more than a quarter of exports shipped to China and about 12 percent to the US. Kim vowed to “closely monitor international trade situations including the US-China trade row” and announced measures to encourage job creation and spur domestic spending. US President Donald Trump has taken a confrontational “America First” stance on trade policy, imposing steep tariffs on steel and aluminum, which angered allies and prompted swift retaliation, as well as 25 percent duties on $34 billion of Chinese goods, with more on the way. China has matched US tariffs dollar-for-dollar and threatened to take further measures, while US exports face retaliatory border taxes from Canada, Mexico and the European Union. The International Monetary Fund said this week the growing trade confrontation is the “greatest near-term threat to global growth” and in the worst case could cut a half point off world GDP. Topics: trade economy US China South Korea Related 932 Business & Economy Some US manufacturers feeling China trade war pinch 598 Business & Economy US, China fire first shots in ‘largest trade war in economic history’ Oil prices drop amid surprise jump in US stockpiles Updated 18 July 2018 Reuters July 18, 2018 03:00 423 US West Texas Intermediate crude was down 36 cents, or 0.5 percent, at $67.72 On the demand-side, intensifying risks over trade tensions between the US and China could drag on the global economic outlook, BMI Research said TOKYO: Oil prices dropped on Wednesday after an industry group reported that US crude inventories rose last week, defying analyst expectations for a significant reduction. Brent futures were down 31 cents, or 0.4 percent, at $71.85 a barrel by 0240 GMT. They rose 32 cents to $72.16 a barrel on Tuesday, after earlier touching a three-month low. US West Texas Intermediate crude was down 36 cents, or 0.5 percent, at $67.72. It settled up 2 cents at $68.08 a barrel the session before, coming off a nearly one-month low. The benchmarks had steadied after big declines on Monday and last week as supply disruptions in Venezuela came to the fore and as analysts had been forecasting a decline of 3.6 million barrels in US inventories for the week through July 13. But the specter of oversupply quickly returned, with a rise of more than 600,000 barrels in US crude stockpiles, reported by the American Petroleum Institute late on Tuesday. Official numbers from the US Department of Energy’s Energy Information Administration are due at 10:30 a.m. EDT on Wednesday. On the demand-side, intensifying risks over trade tensions between the US and China could drag on the global economic outlook, BMI Research said. “Despite US-China trade tensions, the economic outlook is broadly positive, but a number of headwinds are emerging, not least a stronger dollar, rising inflationary pressures and tightening liquidity,” BMI said. “Slowing trade growth will weigh on physical demand for oil, with the shipping, road and air freight sectors an important pillar of demand globally,” BMI said. One US central banker added her voice late on Tuesday to those sounding caution on trade. Kansas City Federal Reserve Bank President Esther George said that uncertainty over US trade policy could slow the economy, even if the recently imposed tariffs in and of themselves are too small to have a big impact. George called trade policy a “significant” downside risk to her outlook for economic growth, even as tax cuts and other fiscal policy is an upside risk.