No country would be willing to risk everything by getting involved in a full blown trade war, opined KV Kamath.

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Speaking in an interview to CNBCTV 18, the president of New Development Bank said that the entire issue should lead instead to negotiations.

Kamath made the statement when asked whether the US decision to impose tariffs could pave way for a trade war between the US, China and European Union.

“I would think that we need to watch the situation a few more days to understand what (will be) the next steps (by China and EU)… retaliation or no retaliation or negotiation. My own view is that this whole move has to lead to negotiation because I do not think anybody would be prepared to go down and start looking at a full blown trade war, which throws everything into chaos…it will be bilateral negotiations that will be held between various trade partners to sort out whatever are their current issues,” he said.

The former Chairman of Infosys also added that while markets across the globe initially reacted to the tariff decision nervously, they soon recovered."If you see initially when there was this announcement, global markets went into a nervousness but then they recovered.”When asked whether China will be forced now to cut down its production, Kamath said that the response could come through a variety of measures. “There could be tariffs on other side…each country will look at its own needs and priorities in taking decision. So we will see a very interesting new equation development.”

The statements comes after the US on Friday imposed tariffs on the import of steel and aluminium. While countries such as Canada and Mexico have been exempted from it, the tariff is expected to hit China and European Union most.

While there still exists fear that the decision may lead to similar response from other economies, the response till now has been not that severe. And with China’s Minister of Commerce stating that there will be no winners in a trade war, hopes are high that the issue could be solved amicably.

First Published:Mar 12, 2018 7:17 AM IST