IMF warns Trump’s tariffs will hurt US and global growth | World News
The global economy is set to grow more slowly than expected this year, largely due to trade tensions caused tariffs introduced US President Donald Trump, the International Monetary Fund (IMF) has said.
In its latest World Economic Outlook report, the IMF now forecasts global growth at 2.8% in 2025, down from its January estimate of 3.3%. Growth in 2026 is expected to reach just 3%, also below earlier predictions.
The US economy is expected to grow only 1.8% this year—almost a full percentage point lower than 2024 and sharply down from the previous forecast of 2.7%.
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“We are entering a new era,” said Pierre-Olivier Gourinchas, the IMF’s chief econom, according to AP. “This global economic system that has operated for the last eighty years is being reset.”
The IMF, a global financial body with 191 member countries, blamed widespread tariffs and the uncertainty they have created for this weaker outlook.
In early April, the Trump adminration announced new tariffs of 10% on goods from nearly 60 countries. Although these were paused on April 9 for 90 days, the IMF said the damage had already been done, as the US and China had already imposed heavy tariffs on each other.
According to AP, Gourinchas noted that the IMF made the rare decision to prepare several different forecasts due to the high level of uncertainty around future trade decisions.Story continues below this ad
Businesses, he warned, may delay investment and expansion because they are unsure of what will happen next, which could slow the economy even more.
The IMF also raised the chances of a US recession this year from 25% to 37%. Meanwhile, private economs at JPMorgan have predicted a 60% chance of recession.
China is also feeling the effects of the tariffs. Its growth is now expected to slow to 4% this year and next, about 0.5% lower than previous forecasts. The IMF said this is mainly because of falling demand from US buyers.
The report also predicts that inflation in the US will rise to about 3% the end of the year. In China, inflation is expected to remain mostly stable.Story continues below this ad
The eurozone will also see slightly weaker growth, with a forecast of 0.8% in 2025 and 1.2% in 2026—both slightly lower than earlier projections. However, the region is less affected because US tariffs on the EU are lower, and countries like Germany are increasing government spending to support their economies.
Japan’s outlook was also downgraded, with growth expected at 0.6% this year and next.
In summary, as AP reports, the IMF believes that the uncertainty caused tariffs and shifting trade policies is leading to a slowdown in economic activity around the world.
(With inputs from AP)
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