International Monetary Fund’s Managing, IMF, Director, Kristalina Georgieva, has say the new US tariffs amid ongoing economic sluggishness poses a major risk to the global economy. Georgieva expressed the concerns in a statement, shortly after the Tuesday’s announcement of the tariff measures by president Trump.
She said, “We are still assessing the macroeconomic implications of the announced tariff measures”.
According to her, it is “Significant risk to the global outlook” during a period of slow economic growth. She underscored the necessity of avoiding actions that could further damage the world economy..
The IMF bass urged the United States and its trading partners to engage in constructive dialogue instead. “We appeal to the U.S. and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” she said.
She suggested that uncertainty in trade policies could further weaken investment and growth. And this is coming on the heel of concerns grow over the impact of protectionist policies.
She explained, tariffs often lead to retaliatory measures, which can disrupt global supply chains and elevate costs for businesses and consumers.
This is coming on amidst where President Trump has gone awry with his dream of slamming tariff against most countries of the world with Nigeria slammed with 14%.
Although Trump claims it was part of his broader protectionist trade policy, which has triggered uncertainty in financial markets, with Wall Street, European indices, and Asian markets all seeing turbulence.
Trump’s decision to impose new tariffs on Nigeria follows months of trade tensions, with the U.S. President arguing that Nigeria has benefited unfairly from US trade policies.
The specific levies, which took effect immediately, include duties on key Nigerian exports such as agricultural products and manufactured goods.
While the specifics of the U.S. tariffs remain under analysis, past similar measures have led to tensions with major trading partners. China, the European Union, and other nations could respond with countermeasures. The IMF has consistently warned against escalating trade restrictions.
The organisation has earlier highlighted that global trade tensions were already slowing down the global economic recovery following the COVID-19 pandemic.
Georgieva disclosed that the IMF will soon release a full assessment of the tariffs’ impact in the World Economic Outlook. This report will be published during the upcoming IMF/World Bank Spring Meetings
The meetings will be convened later this month, and will bring on board global financial experts and leaders. Trade tensions and their implications are expected to be the key topic to be thrashed at the event. Economists and financial analysts will be closely monitoring the IMF’s assessment.
More so, the report will likely provide an insight into how the tariffs could usher inflation, growth, and global trade flows as many experts are of the view that heightened trade barriers could stifle economic progress. They caution that supply chain disruptions and increased costs could put further strain on already fragile economies.
U.S. officials have defended their tariff policies, insisting they are necessary for protecting domestic industries.
However, critic warns that such move will lead to severe economic consequences.
Meanwhile, the IMF has long advocated for open trade and multi lateral cooperation, believing that removing trade barriers and resolving disputes through negotiation is for the benefit of all.
