International Monetary Fund forebodes significant deceleration in U.S. and worldwide economies, attributing it to Trump's tariffs.
Rewritten Article:
Donald Trump's volatile trade policies, marked by steep tariffs, are stirring up a storm, potentially dealing a devastating blow to global economies, warns the International Monetary Fund (IMF). In its recent World Economic Outlook, the IMF forecasts a gloomy scenario, predicting global economic growth to slow to 2.8% this year, significantly below its historical average.
The United States, on the receiving end of this testing time, faces some of the toughest consequences. The IMF anticipates a steep decline in US growth, with its economy projected to expand by a mere 1.8% in 2025, a marked decrease from the 2.8% expansion in 2024.
These dismal predictions are more pessimistic than the fund's January projections, mainly due to Trump's sudden wave of tariff announcements, pushing America's average import tax to a century-high.
"The rapid surge of trade disputes and sky-high levels of policy uncertainty are expected to take a heavy toll on global economic activity," the Washington-based institution stated bluntly. The IMF also noted that the risks to the global economy are "predominantly skewed towards the downside."
Trump's new tariffs account for almost half of the IMF's sharp downgrade in the U.S. growth forecast for this year, according to the IMF's chief economist, Pierre-Olivier Gourinchas. He stated in a blog post that uncertainty over policy dampened demand in the US even before the recent tariff announcements.
Much like all regions, North America can't hold out hope for any benefits from the tariffs down the line. "The long-term impact of the tariffs, if they are maintained, will be negative for all regions, just like the short-term impacts," Gourinchas told reporters.
The latest World Economic Outlook, the IMF said, was compiled under "extraordinary" circumstances. Trump's April 2 announcement of sweeping tariffs "forced us to scrap our projections - almost finalized at that point," the IMF wrote.
Underpinning the importance of trade to the economic outlook, the IMF stated that a further escalation of trade disputes, coupled with even more unknowns regarding future trade policies, could lead to a further reduction in growth. On the other hand, "de-escalation from current tariff rates and new agreements providing clarity and stability in trade policies" could have the opposite effect.
Last updated on [insert date here]
- The International Monetary Fund (IMF) predicts a slowdown in the global economy with economic growth projected to slow to 2.8% this year due to Donald Trump's volatile trade policies, which include steep tariffs.
- The IMF warns that Trump's tariffs may deal a devastating blow to global economies, with the US expected to face some of the toughest consequences, such as a projected 1.8% economic growth in 2025.
- The IMF's latest predictions are more pessimistic than earlier projections, largely due to Trump's recent tariff announcements, which have pushed America's average import tax to a century-high.
- The IMF's chief economist, Pierre-Olivier Gourinchas, stated that uncertainty over these trade policies has dampened demand in the US even before the recent tariff announcements.
- The IMF suggests that a further escalation of trade disputes and unknowns regarding future trade policies could lead to a further reduction in growth. However, de-escalation from current tariff rates and new agreements providing clarity and stability in trade policies could have the opposite effect.
