Trump's tariffs a threat to global economy, IMF warns
23 Apr 2025

The International Monetary Fund (IMF) has warned that US President Donald Trump's sweeping tariffs could negatively affect the global economy.

The body claimed that Trump's measures could trigger a full-blown trade war.

To note, in its latest report, the IMF has downgraded its forecast for global economic growth from 3.3% in 2024 to an estimated 2.8% in 2025.

IMF lowers US growth forecast
Predictions

The IMF has also revised the growth forecast for the United States, predicting a rate of 1.8% this year, down from an earlier estimate of 2.8%.

The adjustment comes as Trump continues to implement various tariffs including those on steel and aluminum imports.

The US has maintained a 10% tariff on all imports and imposed an additional 145% tariff on Chinese goods.

IMF's chief economist comments on economic uncertainty
Expert opinion

Speaking at a news conference, Pierre-Olivier Gourinchas, the IMF's Chief Economist, said, "We're entering a new era as the global economic system that has operated for the last 80 years is being reset."

He added, "Beyond the abrupt increase in tariffs, the surge in policy uncertainty is a major driver of the economic outlook."

Gourinchas warned that if trade tensions and uncertainty persist, it could significantly slow down global growth.

Global markets react to Trump's tariff announcements
Market response

In light of Trump's recent tariffs, global markets have fallen.

There are increasing fears that foreign investors could pull back their investments in the US, no longer considering it a safe haven for their money.

One of the biggest fears among investors is that countries hit by Trump's tariffs could retaliate, further escalating trade tensions.

Countries retaliate against US tariffs
Retaliatory measures

So far, China has retaliated to the US's tariffs with its own. The European Union has also signaled its readiness to retaliate but is open to negotiations.

Trump has temporarily suspended most of the reciprocal tariffs he had imposed on other countries, except China, as his administration looks to negotiate new trade deals.