Protectionism could pose problems, says Schroders

Economic protectionism is moving back on to the agenda, spelling out potential problems for foreign exchange markets and industrial production, according to Schroders.

In the latest Schroders Economic Strategy Viewpoint, the asset manager highlights the recent tensions between China and the US as a signal that politicians are increasingly blaming overseas economies for domestic sluggishness.

China has recently indicated that it would prefer to levy duties on US-imported cars in order to stimulate its own domestic economy and the prediction from Schorders is that protectionist instincts such as these could well extend into other areas in 2012.

The World Trade Organisation warned as recently as September that although protectionist measures had largely been avoided during the financial crisis, further downturns could prove more testing.

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