The International Monetary Fund (IMF) has issued a stark warning that President Donald Trump’s aggressive tariff policies are poised to significantly undermine U.S. economic growth and contribute to a broader global slowdown.
In its latest World Economic Outlook, the IMF downgraded its global growth forecast for 2025 to 2.8%, a 0.5 percentage point reduction from January’s estimate, marking the slowest expansion since 2020. The U.S. economy is projected to grow by just 1.8% in 2025 and 1.7% in 2026, down from 2.8% in 2024. The IMF attributes these revisions to heightened policy uncertainty, escalating trade tensions, and weakening consumer demand.
President Trump’s proposed tariffs include a 10% levy on all global imports, a 25% duty on goods from Canada and Mexico, and a 60% tariff on Chinese products. Additionally, he has threatened 100% tariffs on the BRICS nations if they proceed with plans to establish a rival currency to the U.S. dollar. While these measures aim to protect American industries, the IMF cautions that they could lead to an inflationary boom followed by a bust, potentially weakening the role of U.S. Treasuries as a global safe asset.
The IMF also warns that such protectionist policies may exacerbate trade tensions, reduce investment, distort trade flows, and disrupt supply chains. These developments could not only harm the U.S. economy but also have ripple effects globally, particularly affecting countries heavily reliant on trade with the United States.
Furthermore, the IMF highlights concerns over potential mass deportations of undocumented immigrants, suggesting that such actions could lead to labor shortages in key sectors like agriculture and construction, thereby increasing costs and dampening economic growth.
In light of these findings, the IMF urges the U.S. administration to reconsider its trade strategies and to engage in ‘multilateral cooperation to foster a more stable and prosperous global economic environment.’