IMF highlights impact of US tariffs on global economy

Containers are stacked on a cargo ship at the port of Miami, Florida, USA on April 15 - Photo: AFP

On April 22, the International Monetary Fund (IMF) predicted that the global economy would slow down sharply this year, due to the impact of US President Donald Trump imposing the highest import tariffs in more than a century, along with the wave of instability that followed, according to the Washington Post .

They forecast global growth will slow to 2.8% this year, half a percentage point lower than their January forecast and a “significant slowdown”.

The IMF sees global growth rebounding slightly to 3% in 2026, leaving the world economy well below its long-term average of 3.7% for the second year in a row. Progress on bringing inflation under control will also be affected.

The IMF assessed that Mr Trump's tariffs - including a 10% levy on almost everything the US imports each year, plus significantly higher tariffs on goods from dozens of countries - would harm the US and Washington's trading partners.

But the slowdown will be particularly pronounced in the US economy, which is forecast to grow 1.8% this year, a third lower than forecast in January and a full percentage point below last year's growth.

"The landscape has changed rapidly. We are entering a new era where the global economic system that has operated for the past 80 years is being re-established," said Pierre-Olivier Gourinchas, chief economist of the IMF.

As the world enters 2025, the United States is initially expected to continue to outpace other advanced economies, as it has for years. The Federal Reserve has largely managed to achieve a “soft landing”—keeping inflation in check without triggering a recession. Meanwhile, the global economy is expected to grow steadily, if unimpressively.

But Mr Trump's campaign of high tariffs has upended that outlook.

High tariffs make foreign products more expensive for American consumers, reduce competition for domestic companies, and weaken the incentive to innovate. Across the U.S. economy, productivity will fall, while prices will rise.

Meanwhile, America’s trading partners will lose orders. China, which faces tariffs of up to 145% imposed by the US, will see growth slow to 4%, down 0.6 percentage points from the January forecast. Countries that use the euro are expected to grow by just 0.8%.

Most mainstream economists oppose high tariffs and question President Trump's approach to international trade.

Earlier this week, economists at JPMorgan Chase said Mr Trump's trade war could be enough to push the US and global economies into recession, by creating so much uncertainty that businesses and consumers delay spending.

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Source: https://tuoitre.vn/imf-neu-ro-tac-dong-cua-thue-quan-my-den-kinh-te-toan-cau-20250423101051813.htm