The IMF cautioned that the unpredictable tariff policies implemented by US President Donald Trump, along with retaliatory measures by other countries, could have severe global economic ramifications. The IMF’s World Economic Outlook report projected that global economic growth will decelerate to 2.8% this year, down from 3.3% in the previous year and well below the historical average.
Furthermore, the United States is expected to experience an even more pronounced slowdown, with its economy projected to expand by only 1.8% in 2025, a significant decline from the 2.8% growth seen in 2024. According to Gourinchas, a spokesperson for the IMF, the long-term repercussions of sustained tariffs are likely to be detrimental for all regions, mirroring the negative short-term impacts already observed.
North America, just like all regions, can’t expect any upside from the tariffs further down the line.
In summary, the IMF’s warning highlights the potential negative outcomes of the current trade policies, emphasizing the need for all countries involved to consider the broader economic implications of their actions.
The latest World Economic Outlook was put together under “exceptional” circumstances, the IMF said.
Trump’s April 2 unveiling of sweeping tariffs “forced us to jettison our projections — nearly finalised at that point,” it wrote.
Underscoring the importance of trade to the economic outlook, the IMF said a ratcheting up of trade tensions, along with even more questions about where trade policies are headed, could further reduce growth, whereas “de-escalation from current tariff rates and new agreements providing clarity and stability in trade policies” could do the opposite.
