The IMF warning: “major negative shock” for the global economy due to Donald Trump's tariffs. Unprecedented commercial barriers in a century

The customs tariffs of US President Donald Trump have unleashed a “major negative shock” on the world economy, said the International Monetary Fund, which has reduced its forecasts for economic growth in the US, the United Kingdom, but also globally, The Guardian reports.

In a hard evaluation of the impact that the President of the US President has, the IMF warned: “We expect that sudden increase of April 2, both rates and uncertainty, to lead to a significant slowdown in the short-term economic growth.”

Publishing the latest edition of the report on the world economic prospects, the IMF, based in Washington, has reduced its forecasts for growing global GDP to 2.8% for this year, by 0.5% under the January estimates.

The IMF said that, although its forecasts have been developed on the basis of current commercial policy, “the risks of increasingly intense decline dominate the prospects”.

The forecasts of the institution show that each major economy will be affected. In the case of Great Britain, it expects an increase of 1.1% this year, compared to the one of 1.6% that it estimates in January, and in the US case is expected at a more pronounced damage, from 2.7% to 1.8%.

On the other hand, in the case of Great Britain, the IMF claims that the “internal factors” were the main responsible for relegating the forecast, even if the rates, and the uncertainty created will affect the economy.

IMF: Commercial barriers are at the highest level in the last century

The international financial institution said that even after the “break” announced by Trump in applying customs tariffs for a number of countries, commercial barriers are still at the highest level of the last century.

Given the lack of clarity on the next direction of politics, the IMF anticipates that companies from all over the global economy will probably react by reducing expenses.

“Faced with increased uncertainty about access to markets – their own markets, but also those of their suppliers and customers – the initial reaction of many companies will be to interrupt the activity, reduce investments and reduce purchases. Also, financial institutions will re -evaluate their credits to enterprises,” the report shows.

“The increase of the combined uncertainty and the tightening of the resulting financial conditions is a global negative shock and will affect the activity,” the report shows.

According to the IMF, emerging economies could be particularly affected, because “unfavorable global conditions” make their debt repayment difficult – a situation that could be aggravated by reducing external financial aid.

“An international assistance for more limited development could increase the pressure on low-income countries, pushing them even deeper into debts or requiring significant fiscal adjustments, with immediate consequences on economic growth and living level,” the IMF said.

Call to coordinated actions

The IMF has appealed to coordinated actions to reduce commercial tensions, to restructure the debts of low -income countries and to “address the common challenges”.

In particular, the report indicates the risk of a “powerful volatility” on foreign currency markets, which “could be difficult to manage, especially for emerging market economies.”

The dollar increased by 0.5% Tuesday, after previously reached the lowest level of the last three years in the context of new critics launched by Trump, the president of the federal reserve, calling him “too late” because he did not reduce the interest rates.

Also on Tuesday, the actions of the Wall Street scholarship also increased, after the US Treasury Secretary suggested that a commercial war with China is unsustainable and that the main two savings of the world will have to find a way of disassembling. According to Bloomberg, Scott Bessent made the remarks during an event with closed doors.