The century-high tariff levels imposed by President Trump are expected to bite against global economic growth this year, International Monetary Fund economists said Tuesday.
The IMF has reduced its forecast for global gross domestic product (GDP) growth for 2025 from its January forecast of 3.3%.
The US growth forecast marked growth of 1.8% from 2.7%, while expectations for production of developed economies have been reduced from 1.9% to 1.4%.
Markdown reflects “customer tariff rates and a very unpredictable environment for levels not seen in the first century,” IMF economists said.
Following the announcement of Trump’s “liberation day” tariffs on April 2, additional China-specific tariffs on April 9, and various other trade taxes that came into effect since January, the effective tariff rate in the US is around 25%.
The IMF said global economic situation has been nearly normalized after the pandemic turmoil that began in 2020, following the waves of global inflation and political unrest, but trade policies have led to a new era of uncertainty.
“Top policy changes are causing uncertainty that is resetting the global trading system and re-testing the resilience of the global economy,” said IMF economists.
Other economic organizations have made similar observations in recent weeks, including the Federal Reserve, predicting slower growth and faster price increases as a result of US tariff policies.
In the latest summary of the economic forecast, the Fed has downgraded its US growth outlook from 2.1% to 1.7% for 2025. The unemployment forecast has been raised from 4.3% to 4.4%, and inflation expectations have been raised from 2.5% to 2.7%.
“The levels of tariff increase announced so far are significantly greater than expected, and the same applies to the economic impact.
United Nations economists have also been paying attention to the blow to growth, observing that the rise in protectionism reflects public dissatisfaction with globalization.
“Trade tensions, housing sharing and supply chain securitization reflect public dissatisfaction with economic competition and globalization,” he wrote in his Trade Development Report earlier this year.
“The losses to global GDP due to economic fragmentation are substantial,” they said.[it’s]It is important not to stress the degree of deglobalization. ”
