SANTIAGO, July 11 (Xinhua) -- Chilean Minister of Economy Jose Ramon Valente said Wednesday that the current trade disputes between the United States and several other nations could weigh on global growth and cause a drop in copper price.
Chile is the world's top copper exporter, roughly accounting for a third of the total global exports. Income from the copper industry is a major contributor to Chile's national economy.
The precious metal suffered a price drop of 2 percent at the London Metal Exchange on Wednesday, closing at 2.804 U.S. dollars per pound, its lowest value since July 2017.
"The price of copper is falling basically because there is a possibility that in the future the world's economy will grow less than it is now and would therefore require less copper," said Valente at a seminar in Santiago.
The United States earlier put an additional 25 percent tariff on 34 billion U.S. dollars' worth of Chinese products and threatened to impose 10 percent tariffs on an additional 200 billion dollars of imported Chinese goods.
Washington has put up trade measures against other major trade partners in the past few months.
Many experts and industry leaders worry that the escalating trade tensions initiated by Washington is hurting the prospect of global growth and risks huge damage to the global supply chain.
"What began as threats and small trade battles could today transform into a trade war. The market is taking this direction and it's not a good one," said Valente.
"Chile must be prepared for all types of conditions and that is what the ministry has been doing by maintaining orderly fiscal accounts ... We have been generating incentives for investment and making sure that we have a productive and competitive country," he said.
The rising trade tensions coincide with expectations for higher economic growth in Chile, with the country upgraded this year's growth forecast from 3.5 to 3.8 percent.
The upward forecast is partly supported by the improvement in copper prices. However, current oscillations in the market suggest a high level of uncertainty.