The International Monetary Fund (IMF) has warned of the potential negative impact of US President-elect Donald Trump's economic plans on the global economy, saying that the tariffs he has threatened could exacerbate trade tensions, reduce investment and disrupt supply chains around the world.
In its latest global economic growth forecast, whose risks section is dominated by Trump's impending return to the White House, the IMF also warns that "tremendous uncertainty" about the future US president's policies is already affecting stock markets around the world, according to the BBC.
The IMF states that introducing tariffs, tax cuts and deregulation could boost the US economy in the short term, but could ultimately have the opposite effect.
The possibility of increasing tariffs on imports into the US is worrying many world leaders because it will make it more expensive for companies to sell their goods in the world's largest economy, it added.
Tariffs, which are a central part of Trump's economic vision, he sees as a means of growing the American economy, protecting jobs and increasing tax revenue, and he is threatening to impose them on China, Canada and Mexico on the first day of his new term, January 20.
When he first took office (2017-2021), Trump started a trade war with China. He is now proposing tariffs of 25 percent on global imports, 60 percent on imports from Canada and Mexico, and XNUMX percent on Chinese goods.
Trump also said he would impose 100 percent tariffs on the BRICS group of nine countries if they created a currency that would compete with the US dollar.
The IMF warns that such policies could open the door to a spike in inflation in the US, which could be accompanied by a slowdown in economic growth, potentially weakening the strength of US Treasury bonds, in which investors generally have great confidence.
The deportation of illegal immigrants, which Trump is also announcing, could "permanently reduce potential output" and increase inflation, the IMF added.
The World Bank also warned yesterday that new US tariffs could affect trade and reduce global growth in 2025.
It predicts global growth of 2,7 percent in 2025, which would be the weakest result since 2019, not counting the sharp decline at the height of the coronavirus pandemic.
On the other hand, the IMF predicts "steady, albeit weak" global growth of 3,3 percent in both 2025 and 2026, while the historical average is 3,7 percent.
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