Washington: The head of the International Monetary Fund urged countries to move “swiftly’ to resolve trade disputes that threaten global economic growth.
IMF managing director Kristalina Georgieva said the unpredictability arising from President Donald Trump’s aggressive campaign of taxes on foreign imports is causing companies to delay investments and consumers to hold off on spending.
“Uncertainty is bad for business,’ she told reporters on Thursday in a briefing during the spring meetings of the IMF and its sister agency, the World Bank.
Georgieva’s comments came two days after the IMF downgraded the outlook for world economic growth this year. The 191-country lending organisation, which seeks to promote global growth, financial stability and to reduce poverty, also sharply lowered its forecast for the United States.
It said the chances that the world’s biggest economy would fall into recession have risen from 25 per cent, to about 40 per cent.
Georgieva warned that the economic fallout from trade conflict would fall most heavily on poor countries, which do not have the money to offset the damage.
Since returning the White House in January, Trump has aggressively imposed tariffs on American trading partners. Among other things, he’s slapped 145 per cent import taxes on China and 10 per cent on almost every country in the world, raising US tariffs to levels not seen in more than a century. But he has repeatedly changed US policy — suddenly suspending or altering the tariffs — and left companies bewildered about what he is trying to accomplish and what his end game might be.
Trump’s tariffs — a sharp reversal of decades of US policy in favour of free trade — and the resulting uncertainty around them have caused a weekslong rout in financial markets. But stocks rallied Wednesday after the Trump administration signalled that it is open to reducing the massive tariffs on China.
“There is an opportunity for a big deal here,” US Treasury Secretary Scott Bessent said Wednesday.
