WASHINGTON — The leader of the International Monetary Fund (IMF) has prompted countries to rapidly address trade conflicts that pose a threat to global economic expansion.
Kristalina Georgieva, the managing director of the IMF, highlighted that the lack of predictability from President Donald Trump’s assertive escalation of tariffs on imported goods is causing investors and consumers alike to hold back on spending.
“Uncertainty is detrimental to business,” she stated during a press briefing on Thursday amid the spring meetings held by the IMF and the World Bank.
Georgieva’s remarks followed the IMF’s recent downgrade in its projections for global economic growth this year. The 191-member financial institution, tasked with fostering worldwide economic stability and reducing poverty, has significantly decreased its growth forecast for the United States. It now estimates that the probability of the U.S. economy slipping into a recession has surged from 25% to about 40%.
The repercussions of trade disputes, Georgieva warned, could hit poorer countries the hardest, as they often lack the financial resources to mitigate the impact.
Since his return to the White House in January, President Trump has energetically imposed tariffs on various nations trading with the U.S. Notably, he has implemented a 145% tariff on Chinese imports and a 10% tariff on most other countries, marking a high not seen in over a century. Yet, Trump’s shifting policies — including sudden changes or pauses in tariffs — have left businesses perplexed and uncertain about his ultimate objectives.
The abrupt policy shift favoring tariffs over the U.S.’s long-standing support of free trade has led to prolonged turmoil in the financial markets. However, there was a glimmer of optimism on Wednesday when the Trump administration indicated a willingness to potentially lessen the sizable tariffs on China.
U.S. Treasury Secretary Scott Bessent commented on the situation, expressing, “There is an opportunity for a substantial deal here,” which contributed to a market rebound.