The IMF has warned of ‘major negative shock’ from Trump’s tariffs.
Donald Trump’s tariffs have unleashed a “major negative shock” into the world economy, the International Monetary Fund has said.
The IMF said: “We expect that the sharp increase on 2 April in both tariffs and uncertainty will lead to a significant slowdown in global growth in the near term.”
The IMF is now predicting that growth across the world economy will fall to 2.8% this year, down from 3.3% in 2024, followed by 3% growth next year. Back in January, the Fund had forecast 3.3% growth in both 2025 and 2026.
They continue: “Ratcheting up a trade war, along with even more elevated trade policy uncertainty, could further reduce near- and long-term growth, while eroded policy buffers weaken resilience to future shocks.
“Divergent and rapidly shifting policy stances or deteriorating sentiment could trigger additional repricing of assets beyond what took place after the announcement of sweeping US tariffs on April 2 and sharp adjustments in foreign exchange rates and capital flows, especially for economies already facing debt distress.
“Broader financial instability may ensue, including damage to the international monetary system.”
Meloni
It comes as the Italian prime minister Giorgia Meloni was the latest world leader to meet with Donald Trump at the White House.
She was the first European leader to have a face-to-face with President Donald Trump since he announced, and then suspended, 20% tariffs on European exports.
“We know we are in a difficult moment,” Meloni said last week in Rome. “Most certainly, I am well aware of what I represent, and what I am defending.”
The EU is defending what it calls “the most important commercial relationship in the world”, with annual trade with the US totaling 1.6 trillion euros ($1.8 trillion).
Meeting
When Trump began to bang on about tariffs Meloni gave a look for the ages.
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