President-elect Donald Trump's protectionist policies would hit many regions if they led to a serious trade conflict, Bank of Japan chief Haruhiko Kuroda told CNBC at the World Economic Forum in Davos on Wednesday.
While the Bank of Japan governor struck an optimistic tone regarding Trump's fiscal policies, he was more cautious regarding the incoming President's trade platform.
"As far as his fiscal stimulus package is concerned, I think it is good because large-scale tax cuts coupled with significant investment in infrastructure would raise U.S. economic growth in coming years and that would also raise global economic growth in coming years," he enthused.
"On the other hand, the question of his somewhat protectionist trade policy could be a matter of concern," he added.
However, Kuroda said he remained confident that a full-blown trade war between the U.S. and China will not happen - meaning that, on balance, he sees Trump's proposed policies as a positive for the world economy.
"Although protectionist policy is not good for the world economy, not good for even the U.S. economy, on balance, I think fiscal stimulus would dominate U.S. economic growth and also could affect positively the world economy," he opined.
Pressed on the implications for Japan if such a trade war did develop, the central bank governor denied that it would benefit his country.
"As you know trade relationships are so multilateral and complicated due to the global supply chain. So if the U.S. and China - the world's biggest economy and the second-biggest economy - were engaged in a trade war, or some serious trade conflict, that would affect Asia, Europe, the southern hemisphere, everywhere. So that is not good at all, not good for Japan," he explained.
