The International Monetary Fund has released a stark warning about the potential consequences of escalating trade tensions under Donald Trump’s presidency. The IMF’s latest World Economic Outlook report paints a grim picture of the global economy, with growth expected to slow to 2.8% this year from 3.3% last year. The US is expected to be hit particularly hard, with growth projected to drop to 1.8% from 2.8% last year.
Trade War Fallout
The IMF’s dire forecast is largely attributed to Trump’s tariff policies and the retaliatory measures taken by US trading partners. The fund’s chief economist, Pierre-Olivier Gourinchas, notes that nearly half of the 1% decline in US economic growth is due to the new tariffs and policy uncertainty. The tariffs announced by Trump on April 2 forced the IMF to scrap its previous projections.
The report highlights the critical role of trade in shaping economic prospects. If trade tensions escalate further, growth could take another hit. On the other hand, if tariffs are rolled back and trade agreements are reached, growth could get a boost. The IMF’s warning is clear: the current trade environment is unsustainable and poses significant risks to the global economy.
Some key statistics from the report include:
- Global economic growth: 2.8% (down from 3.3% last year)
- US economic growth: 1.8% (down from 2.8% last year)
The IMF’s report is based on data and analysis from various sources, including CNN.