Lagarde Flip-Flops Again On Brexit, Warns Of "Disastrous" Trump-Style Protectionism

Tyler Durden's picture

Submitted by Michael Shedlock via,

Ahead of the vote on Brexit, IMF head Christine Lagarde warned of a prolonged period of uncertainty.

After the vote, Largarde said Brexit provided the EU a better opportunity for reform.

Today Largarde is certain of disastrous consequences if another large county turns protectionist. In doing so, she pointed her finger at Donald Trump.

Lagarde's Changing Tune on Brexit

Lagarde Points Finger at Trump

Please consider Lagarde Warns Trump-Style Protectionism Would Hit World Economy.

Britain’s vote to leave the EU is already casting a shadow over international growth, the International Monetary Fund chief said in an interview, adding that the imposition of new trade barriers in another large economy could have ruinous effects.


“I think it would be quite disastrous, actually. Well I don’t think I should say disastrous because that is an excessive word and I should refrain from excessive words. But it would certainly have a negative impact on global growth,” she told the Financial Times.


[Mish Comment: So is it quite disastrous or simply negative? Her meaning is uncertain]


Any uncertainty surrounding a Trump presidency would probably yield more instability in financial markets, similar to the upheaval in the wake of last month’s UK referendum, she said in response to a question. But the IMF chief took care to avoid singling out any politician or referring to Mr Trump by name.


[Mish comment: Lagarde took care to avoid singling out Trump, while singling out Trump]


Ms Lagarde said “waves of protectionism” in the past had “preceded many wars” and that protectionism “hurts growth, hurts inclusion and hurts people”.


Ms Lagarde said she did not want to get involved in the political debate in the US, the IMF’s biggest shareholder. But she made clear her dim view of the policies of Mr Trump, who has proposed punitive tariffs on goods from China and Mexico and ripping up US trade pacts such as the North American Free Trade Agreement.


[Mish comment: Lagarde does not want to get into the political debate in the US, but hands Hillary campaign talking points on a silver platter]


The IMF’s assessment of the impact of the Brexit vote on the UK economy depends heavily on what sort of trade relationship with the EU a new government would be able to negotiate, she said.


Should a deal preserve access to the single market — such as Norway now enjoys — then the UK economy would be only 1.5 per cent smaller by 2019 than would be the case if Britain remained part of the EU. Were a deal to lead to the UK’s access to the EU’s 27 other economies being subject to tariffs under World Trade Organisation rules, it would cost the UK 4.5 per cent growth.


The IMF had not modelled the economic impact of a scenario in which the UK’s exit from the EU drags on and uncertainty continues for a year or more, Ms Lagarde said, but the political crisis set off by the vote could make such events likely.


[Mish comment: The IMF warned of a prolonged period of uncertainty but did not model the result even though the “political crisis set off by the vote could make such events likely”. How likely? The following paragraph provides the answer]


“Do we have a forecast and scenario with prolonged uncertainty, total lack of clarity, no triggering of Article 50 [the official notification required to leave the EU], things staying in limbo for a long period of time? No. We don’t have that. We doubt that it would be sustainable politically, geopolitically,” she said.


[Mish comment: Prolonged uncertainty is both likely and unlikely]


For the July 19 update of the IMF’s World Economic Outlook, Ms Lagarde said the organisation was looking at presenting a variety of possible scenarios for the global economy depending on the outcome of Brexit discussions — a departure from its usual format.


[Mish comment: I can hardly wait. Until then, the uncertainty is nearly killing me]

Waves of Protectionism

If Lagarde wanted to make a positive contribution she should have embraced free trade, totally and completely.

She is correct on one thing. And it’s a very big thing: “Waves of protectionism in the past had preceded many wars. Protectionism hurts growth, hurts inclusion and hurts people“.

The solution is so simple it’s beyond Lagarde’s comprehension.

The EU, US, and Asia ought to work out a genuine free trade agreement not a mind-numbing set of rules and regulations that encompass the EU, nor secret agreements like Obama’s proposed Trans Pacific Partnership (TPP) that has little to do with free trade.

A genuine free trade agreement would consist of a single statement: “Effective immediately, all tariffs and subsidies, on all goods and services, are removed.”

For more on TPP, Tariffs, the WTO, and free trade, please see …

Lagarde finally issued a statement on trade that made sense. But it was buried in a series of flip-flops and conflicting ideas that makes it clear she really does not understand what free trade means.

Nonetheless, her warning about trade is correct. A global trade war could indeed have disastrous consequences. And it’s not just Trump who could start one.

Clinton, Trump and Sanders have all made similar statements on trade. For details, please see Today’s Quiz: Donald Trump, Bernie Sanders, Hillary Clinton – Who Said It?.

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Lost in translation's picture

FIFM, I stand corrected ^_^


Bumpo's picture

Hey EU, feel free to make offers like any other business trying to secure a deal. So far, you have been weighed, measured, and found wanting. Let each country decide for itself. The best interests of each sovereign nation will now prevail. If that doesn't work for you, Go fuck Yourself.

nmewn's picture

"Today Largarde is certain of disastrous consequences if another large county turns protectionist."

I believe if one reads (or understands) that sentence in a different way, it means "if another large country insists on it's own sovereignty."

Doesn't it...Mzzz. Largarde? ;-) 

CuttingEdge's picture

An Orange Ogre?

Imagine if she was green like Shrek - thats the stuff nightmares are made of.

PT's picture

Dear La Gunk

You've had plenty of time now.  If your ideas worked then everyone would be happy and no-one would disagree with you.
Protectionism causes wars?  Not quite.  If anything, Globablism causes poverty causes protectionism that causes the wars.  For starters, we're supposed to be dragging the rest of the world UP, not letting the rest of the world drag us DOWN.

No-one will listen to you saying, "Jump in the boat or else you will drown" when the boat is clearly engulfed in flames.
A little salt is good for you while a jug of salt will kill you.  Stop saying that the answer is more salt.


neutrino3's picture

Ogre by night Ogress by day. Separate toilet user.

Omerta's picture

This bitch changes her tune as often as a two-bit whore needs to change her soiled panties. Oh, yeah-did I mention Fuck the IMF?

Barmaher's picture

Brexit was not supposed to happen according to the NWO.  Their unhindered lawlessness has become obvious. The implication is that they will not be stopped.

As a reminder their watershed event that took them over the top was two giant skyscrapers turning to dust in mid-air, literally disappearing from the plaza after being rammed by airplanes of unknown origin.

Lost in translation's picture

GREAT link, thanks for posting that!

cstu7011's picture

Ahh the threat! Her playground is Aspen, Hamptons, Palm Beach, Teterboro... those places should get messy first. 

OldPhart's picture

The trans-pacific partnership is no longer secret.

It's all here.

Zero Hedge, you should already be on top of this.

Shame on you.

As to laGarde, fuck her...only I'd use a thirty foot telephone pole.

Stan Smith's picture

At least she's consistently inconsistent.

Fish Gone Bad's picture

"Anything that can be destroyed... can be controlled."  Lagarde is an old lady and she is well aware of this adage.

Billybullshit's picture

She is irrelevant.

tyrone's picture

shes an arrogant i.diot.  Only thing she can do well is speak french

rondellio's picture

I hate to say something positive about her-see my post, but she is fluent in English.  This leads to a wider point: accomplishments do not necessarily = integrity or wisdom. 

BingoBoggins's picture

I think Trump's "views" on trade are, actually, the starting points of negotiation. Though not a Libertarian, his goals are what's best for his "interests". Presumably that's the US and, very likely, his ego. World domination and market destruction are not in his best interests. Reliable, consistent cash flow and, subsequently, our adulation would be.

Archibald Buttle's picture

if he can keep us out of the TPP and TTIP and most especially TISA, then practically any other outcome of a trump administration would have to be called an unequivocable success for the average american when compared to pretty much the last 103 years.

i do not relish the idea of a clinton/cheney ticket further encumbered by an as yet unknown vice presidential candidate.

Pliskin's picture

I'm trying to figure out where this wrinkly old bitch lays in the 'Twat' munching pyramid of sleaze.  We've got Albright at the top, under her Clinton, Nuland, Power, Rice, maybe under them Yellen, Lynch, Lagarde at the bottom slurping up the piss soaked slime that trickles down?  Who knows.

Fuck off and die, Lagarde, you walking skeletal, French, waste of space.


cstu7011's picture

Uh she's top puppet master for sure. 

JailBanksters's picture

Forgot, the UK Exit will increase Global Warming, increase  Global Cooling, raise ocean sea levels and decrease ocean sea levels.

Changing this will cause everything to NOT stay the same !!

huggy_in_london's picture

Says the career lawyer with no formal training or experience in finance or economics.

Panic Mode's picture

Fuck off. For you own good is not protectionism, but for ours it is. Go and fuck yourself. That's why EU is so fucked up.

rondellio's picture

Lagarde is a member of the French political elite and a lawyer by trade.  She famously and stupidly criticised the Greeks for not paying their taxes-yet her own salary is free.  Nobody, anywhere, wld be listening to her if she did not have the letters IMF after her name.  Except, perhaps the police: she is currently under investigation for a suspect payout of taxpayer's money to an ex convict. 

Archibald Buttle's picture

the clintons? oh, wait, you said ex-convict...

Batman11's picture

Protectionism does seem almost inevitable.

1920s/2000s - high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase

1929/2008 - Wall Street crash

1930s/2010s - Global recession, currency wars, rising nationalism and extremism

Already, the US has been the first to enter the coming trade wars with massive tariffs on Chinese Steel.

When everything is going well, before the bankers bring an end to the good times with reckless behaviour, everyone shares in the spoils.

When the going gets tough everyone is looking to avoid losses, remember the “wealth creators” that were responsible for the boom times, where are they now?

Policymakers look to national institutions, Governments for fiscal stimulus and central banks for monetary stimulus, the private sector isn’t interested in potential losses it likes easy profits.

When the mess is sorted out the private sector will be back to reap the rewards.

Just look at the treatment of Greece in the Euro-zone, it’s everyone for themselves.

The globalists are nowhere to be found in the difficult times, it’s everyone for themselves.

History shows that globalisation phases are followed by retrenchment into nationalism as everyone tries to avoid any losses.

When everyone is sharing the spoils everything works just fine.


Batman11's picture

"I made my billions in the good times and I have no intention of helping out now.

I will be shorting any potential failures to increase my own personal fortune" typical one-time globalist.


Archibald Buttle's picture

nicely put. you have summed up history, not only in the words of the "typical one-time globalist," but more importantly those of the multi-generational globalists.

EddieLomax's picture

By protectionism she means the people making their own laws up rather than a third party "trade" body issuing diktaks on immigration, standards,etc

Really not afraid of tariffs since they are just another tax, if we pay less in one tax but more in another we are no better or worse off, I can only look with envy at the people who used to only have tariffs as taxes.

TeraByte's picture

Who the heck would care of financial markets, should an honest day´s job provide means of decent living..
This elite leftist Ms from Strauss-Kahn School is worried about plebs uprising against the chosen ones and
is too afraid of saying let them eat cakes ( Marie Antoinette 1775  "Qu'ils mangent de la brioche".)

artichoke's picture

DSK was a lot better than Lagarde.  That's why they swept DSK out of the way with a non-scandal to put in Lagarde.

Theremustbeanotherway's picture

Disastrous for you, Lagarde and your cronies, the tapeworms of the modern world.  Together you live tax free at the precariat's expense!   You are ciphers of the billionaire/trillionaire class touting toxic loans to impoverished countries as a prelude to subsequent asset stripping! 

Ghordius's picture

so Mish Shedlock is pro free trade. and thinks that "Lagarde finally issued a statement on trade that made sense. But it was buried in a series of flip-flops and conflicting ideas that makes it clear she really does not understand what free trade means"

Mish Shedlock also thinks that the free trade case is simple:

"The solution is so simple it’s beyond Lagarde’s comprehension. The EU, US, and Asia ought to work out a genuine free trade agreement not a mind-numbing set of rules and regulations that encompass the EU, nor secret agreements like Obama’s proposed Trans Pacific Partnership (TPP) that has little to do with free trade. A genuine free trade agreement would consist of a single statement: “Effective immediately, all tariffs and subsidies, on all goods and services, are removed.”"

nope, Mish. yes, I agree that TTP, TTIP and CETA have little to do with free trade. All three are, btw, "anti-sovereignty", they aim to get rid of the so-called "country risk" by giving "investment protection", meaning that if a country changes laws any foreign investor can sue them in a non-national court. As such I am completely opposed to them. Sovereignty first, investment from abroad second. It's just my preference

but this single statement? it's utterly ridiculous in it's radical simplicity. first tariffs: that's the least of the issues, then there are very few left, worldwide

second... subsidies. now, have you any clue how many kinds of subsidies there are? and their volumes? all in all, the subsidies on fossil fuels alone, worldwide, amount to the incredible sum of 5'000 billion per year. As comparison, "green energy" is being subsidized in the ballpark of 200 billion per year

it's nice to hear the argument that all subsidies should go. the more intelligent argument about subsidies, one that allows sovereignty, btw, is that we, humans, ought to learn something about subsidies, including from how we raise children: i.e. that subsidies ought to be part of a plan, and that plan ought to consider the end of the subsidies. Subsidizing your children, i.e. raising them, is something you do in order to make them self-sufficient. And then you stop

this, btw, is something that the US did very well, in earlier times. Industrial policy was set to protect "infant" industries from competition from abroad, with both tariffs and subsidies. Then, as those industries became more mature, they were released into the greater competition battle, and the policy turned from protectionistic to "laissez faire"

those were times when the gold standard was used, note. today, the biggest form of subsidy is central bank "quantitative easing". today, we have countries on the markets like China, which is btw a huge creditor of the US gov and it's perfectly willing to subsidize the growth of it's industries in any direction and any amount, given the chance or possibility

so... no, Mish

first, I will continue to support our european style of regulations. the truth about the current EU regs is often completely disregarded: most of it was national regulation, in a dozen countries. and somehow brought to one set. and GMO Frankenfood is one of the best examples why I will continue to support them. Does it make sense to feed any continent from imported food of dubious value from a completely different continent? Does it make sense that european agriculture ought to become like the humungous megacorporate Agri-Biz that the US sports and that reminds me of Soviet Combines with capitalistic claws? My answer is no

second, the "down with all regulations" cry of die-hard radical free-traders is not something that brought good results in a lot of industries, lately. the best example is what happened when around 1999 all sensible post-1929 regulations were scrapped for banking. the division of banking into a down-to-earth small-customer-friendly retail banking and a go-there-if-you-dare speculative investment banking was regulation, too. the bans on several forms of derivatives, too. but you extreme free-traders thought they were among those "mind-numbing set of rules and regulations", and scrapped them. the result: Enron-like idiocies and of course the rise of the megabanks and their derivatives-fuelled tentacles, the hedge-funds

third... jobs. good jobs, note. there is a very small voice there saying: what does this increased productivity of the world economy mean for me... if this means I am practically competing with Asians on the labour market that can out-compete me any time just because their living expenses are a fraction of mine? that small voice... it's millions, Mish. and growing louder

Mish, have a look at the world, would you? we are in the middle of a currency war that is the equivalent of a funding war, and it is also a kind of trade war, as they often do. also have a look at realities like the EU. what is the best way to prevent trade wars? well, the size of... potential retaliation. China, for example, realizes that any inroads into certain markets, as it happened with things that everybody was "pumping up" like solar panels, can be contrasted. no, it's not nice. no, it's not the economic textbook of simplicity that many use when calling for free markets. it's just... reality

"Nonetheless, her warning about trade is correct. A global trade war could indeed have disastrous consequences. And it’s not just Trump who could start one."

fine. but again, your side is Lagarde's side. you both push for free trade, simple and completely. In a way, I prefer Lagarde because she does not assume that the world is so simple as you do. Nevertheless, you are both what the less-idotic Left of this world calls free-traders and champions of globalization

I often rant on this blog about the word "globalism", note. but if you define it, for example as anti-sovereignty, then globalization in the form of TTIP or CETA treaties is both "globalism" and globalization

so no, Mish, I oppose you. your simple recipy of "moar free trade, regardless" cannot be applied to this world as it is. your current position is radical and is extreme

your side is devoid of moderation and introspection. your model is too simple, and while applying it you end up stripping sovereignty away so that your model can work

your side is the "globalism" that kind-of happens while pushing and lobbying for globalization because globalization fits your simple worldview that was already too idealistic in the 19th Century... a century when your country was actually among the most protectionistic

your extreme side is what brought us the back-lash of potential trade war as promised by Trump. to which, again, my answer is the very EU which you despise so much: if Trump intends to sit at a table threatening with tariffs and embargos, I prefer to have our countries united, with a smile on their face and able to elencate the potential retaliation we could bring. and, who knows, this very bargaining starting position might even bring us what the world, or at least the West, really needs: a grown-up conversation about balanced trade, with a win/win solution for all sides

because Mish, your country still has the most imbalanced trade of the whole world, at a tune of 40-50 billions per month. it's time you have a look at this decade-long affair with disregarding reality, courtesy of financialization built on deregulated megabanking, "moar is good, always", and "the dollar is our currency and the rest of the world's problem"

so, two words: reality and moderation. bitchez

rant end

artichoke's picture

Mish isn't really simple.  In good time when it no longer becomes good for him to have even more free trade, he would have a "change of heart" and call for targeted protections.

I can't say I prefer Lagarde though, she's insidious and has the bully pulpit.

Escapedgoat's picture

It is the ONLY rant of yours Ghordius that I agree so far in relation to Mish's Demands.

There! that was not bad, was it. Now IF you only allow Sovereign States their OTHER TOOL,  their CURRENCY, we will get along nicely.

Flabio's picture

Just lock this woman  back in the Barn or send her to the house of Spies at the UN

medium giraffe's picture

It's nice that she took the time out to share her thoughts during a busy schedule of embezzlement and spray-tans.

PT's picture

I was hoping she could enlighten us with some more riveting, profound information about the number seven.

cstu7011's picture

Bring it on evil witch! 

samsara's picture

"After the vote, Largarde said Brexit provided the EU a better opportunity for reform."

Did you hear that ? If we elect Trump. We too will miss our opportunity for "Reform"

south40_dreams's picture

If that bitch hates it, I love it!

vesna's picture

She wants to be the Joan of Arc. You are not a virgin stupid satanistic cow!!!

vesna's picture

She wants to be the Joan of Arc. You are not a virgin stupid satanist cow!!!

Jimmy Twinkle's picture

After the menopause Lagarde's normal cycle of bullshit moved from a lunar calender to a system only she fully understands but is beleived to be based on the number 7.

Whilst then her comments appear to contradict themselves when one understands the cycle of 7's ( as well as some knowledge of her prescription-non prescription drugs regime ) then these comments can only then be seen in context.