US Tariffs: A Looming Threat to Global Economic Stability

The IMF warns that US tariff hikes could weaken the global economy and boost inflation. Managing Director Kristalina Georgieva predicts slower growth, increased global uncertainty, and volatile financial markets, stressing the need for reduced trade barriers. Tariffs, especially with China, further complicate economic projections.

The International Monetary Fund (IMF) has raised alarms about the potential impact of rising US tariffs on the global economy, forecasting increased inflation and slower growth. These projections, set to be unveiled next week, suggest that the ongoing trade tensions under the Trump administration are creating significant uncertainty worldwide.

Kristalina Georgieva, the IMF's Managing Director, highlighted the effects of sharp import duty hikes, noting these measures are testing the resilience of the global trading system. While the IMF does not predict a global recession, the implications for financial markets, particularly Wall Street, are considerable as volatility has become a common occurrence.

Georgieva also urged nations to lower tariffs and other trade barriers, actions that have stagnated since WWII. The narrative of inconsistency in playing by trade rules fuels perceptions of unfairness. With tariffs continuing to complicate global supply chains, their impact ripples across economies, particularly visible in the US-China trade tensions.

(With inputs from agencies.)