2 days Ago By N/A (Associated Press)
Surging United States (US) tariffs will weaken the global economy and push up inflation this year, according to projections to be released next week by the Washington-based multilateral lender International Monetary Fund (IMF). The IMF’s Managing Director, Kristalina Georgieva, said Thursday, April 17, that the Trump administration’s sharp increases in duties have caused global uncertainty to spike. The import taxes will slow global growth but not cause a worldwide recession, she added.
The details of the IMF’s outlook will be issued Tuesday, April 22. The world economy’s resilience is being tested “by the reboot of the global trading system” that threatens to cause turbulence in financial markets, Georgieva said. That turbulence has been playing out in financial markets for weeks now, especially on Wall Street, which has experienced wild swings from day-to-day and often times even hour-to-hour.
The IMF chief also echoed some Trump administration concerns. She called on countries to reduce their tariffs and lower other barriers to trade, a process that she said had stalled out in the past decade after making steady progress for many years after World War II. “Trade distortions—tariff and nontariff barriers—have fed negative perceptions of a multilateral system seen to have failed to deliver a level playing field,” she said.
“This feeling of unfairness in some places feeds the narrative: we play by the rules while others game the system without penalty.” More pessimistic than the IMF, the United Nations Trade and Development (UNCTAD) deems that the global economy is veering towards a recession amid intensifying trade disputes and rising uncertainty, mainly wrought by US President Donald Trump’s tariff spree. According to UNCTAD’s “Trade and Development Foresights 2025 - Under pressure: Uncertainty reshapes global economic prospects” report, published on April 16, the Geneva, Switzerland-based UN agency expects global economic growth will slow to 2.
3 percent this year, pushing the world on a “recessionary path.” The UNCTAD report highlighted several destabilizing factors such as trade policy shocks, financial instability, and heightened uncertainty, which collectively threaten to derail the global economic outlook. A key concern raised in the report is the rapid escalation of global trade tensions.
UNCTAD pointed out that recently announced tariff actions—initiated by the US under Trump and countered by retaliating economies—are not only disrupting supply chains but also diminishing the reliability of trade systems. “Trade policy uncertainty is at a historical high, and this is already translating into delayed investment decisions and reduced hiring,” UNCTAD said in an emailed statement. While the global economic slowdown is expected to impact all countries, UNCTAD expressed particular concern for developing, poor, and the most vulnerable economies.
UNCTAD noted that many low-income countries are already grappling with a “perfect storm” of deteriorating financial conditions, unsustainable debt levels, and sluggish domestic growth. As such, these poorer nations face significant risks to their development gains, economic growth, and investment, the report warned. Still, UNCTAD identified sources of resilience, particularly the growing trade among developing nations—South-South trade.
“The potential of South-South economic integration offers opportunities for many developing countries,” UNCTAD said, citing that it currently comprises around one-third of global trade activities. In response to these growing risks, UNCTAD called for renewed efforts to foster international as well as regional cooperation, dialogues, and negotiations. “Coordinated action will be essential to restore confidence and keep development on track,” according to UNCTAD.
(With a report from Ben Arnold de Vera).
