Joseph Stiglitz, a Nobel-prize winning economist, speaks in a pre-recorded special conversation with Institute for Global Economics (IGE) Chairman Jun Kwang-woo, during an international conference co-hosted by IGE and KB Financial Group in Seoul, Thursday. Captured image from IGE's YouTube account

U.S. President-elect Donald Trump could spark stagflation in America if he implements higher tariffs and other economic pledges in his second term, a Nobel Prize-winning economist said Thursday.

Joseph Stiglitz, chair of the Committee on Global Thought at Columbia University and 2001 Nobel laureate in economics, said a second Trump presidency may also usher in a new Cold War, driven by an increasingly unstable world order.

"The tariffs will result in inflation, and if inflation goes up, the Fed is going to raise interest rates," he said in a pre-recorded special conversation with Institute for Global Economics (IGE) Chairman Jun Kwang-woo.

Stiglitz was referring to Trump's pledge for blanket tariffs of at least 10 percent on all U.S. trading partners, including a 60 percent tariff on Chinese imports.

He did not rule out the possibility of retaliatory measures from the trading partners, saying, "You combine the higher interest rates and the retaliation from other countries, you're going to get a global slowdown."

He added, "Then you have the worst of all possible worlds: inflation and stagnation or slow growth."

Moreover, Stiglitz warned against a new Cold War, where the countries will be pressed to choose a side between the U.S. or China as Trump is likely to deepen a trade and technology row following his first term.

Participants listen to Institute for Global Economics (IGE) Chairman Jun Kwang-woo deliver a welcome speech during an international conference co-hosted by IGE and KB Financial Group in Seoul, Thursday. Korea Times photo by Yi Whan-woo

The Nobel laureate's conversation with Jun came during an international conference co-hosted by IGE and KB Financial Group in Seoul to address global challenges in the post-U.S. presidential election.

The "2024 Sustainability Global Summit" attracted more than 20 experts who joined in person or online from Korea and abroad. They ranged from public servants to scholars and industry leaders.

Under the theme, "Navigating the New Waves of Global Transformation and Policy Pivot: Towards a More Resilient and Sustainable Future," the participants explored the impact on global macroeconomics and geopolitics over Trump's return and how it can reshape the course of policies amid climate change and demographic crisis worldwide.

In his welcome address, Jun assessed that the conference serves as "a crucial platform for discussing the recent and prospective developments in sustainable finance and fostering solution-driven collaborations for a more innovative future."

Jun's speech was followed by a congratulatory address from three guests — Rep. Na Kyung-won of the ruling People Power Party, Presidential Committee on Aging Society and Population Policy Vice Chairman Joo Hyung-hwan and Financial Services Commission Chairman Kim Byoung-hwan.

Also the president and founder of a think tank, "Population and Climate, Tomorrow," Na said Trump's return to the White House could be an opportunity, although many countries are concerned about his "America First" policies.

"I think Korea possibly can be the best partner for the U.S. in its reshoring of the manufacturing sector," she said, referring to Korea's expertise in manufacturing.

Joo said the presidential committee is committed to establishing countermeasures against low birth rates and a dwindling population by the beginning of 2025.

In particular, he viewed Korea and Japan as "having a lot to collaborate" concerning population policy. He accordingly lauded the joining of Seike Atsushi, the chairman of Japan's Policy Studies Group for an Aging Society, who later gave a keynote speech.

Joo deemed the topics of the conference should be dealt with "cooperation and alliance to result in concrete outcome."

He added, "For instance, cooperation between the government and enterprises, as well as between nations, is crucial to finding solutions for Trump's trade protectionism."