The market power of corporations has been increasing, with the highest price markups being imposed by a “small number of highly dynamic companies,” a trend that is especially pronounced in the digital economy, Lagarde said.
Market Power
“I am not saying that we currently have a ‘monopoly problem.’ But I am saying that we should take appropriate measures -- so that it does not become a problem,” she said.
Lagarde reiterated her warning for countries to avoid imposing new tariffs on each other. An increase in tariffs by 25 percentage points on all goods traded between the U.S. and China would reduce annual output in the U.S. by up to 0.6 percent, and up to 1.5 percent in China, she said.
“These are potentially self-inflicted wounds that should be avoided,” Lagarde said.
High-level trade talks between the U.S. and China resume this week in Washington amid hopes the world’s two biggest economies can reach a deal to end their trade war.
This article provided by Bloomberg News.