IMF Warns of Global Economic Slowdown Due to US Tariff Policies
The International Monetary Fund (IMF) has issued a formal warning about the serious impact of high-rate US tariff policies on the global economy. In its latest World Economic Outlook (WEO) report released in April 2025, the IMF has downgraded its global economic growth forecast for 2025 from 3.3% to 2.8%, a reduction of 0.5 percentage points. This represents the lowest growth rate since the COVID-19 pandemic.
Global Economic Growth Forecasts Revised Downward
The IMF's revised growth forecasts for major economies are as follows:
- United States: Reduced from 2.7% to 1.8%, a drop of 0.9 percentage points
- China: Reduced from 4.5% to 4.0%, a drop of 0.5 percentage points
- Eurozone: Reduced from 1.0% to 0.8%, a drop of 0.2 percentage points
- United Kingdom: Reduced from 1.6% to 1.1%, a drop of 0.5 percentage points
- Japan: Reduced from 0.9% to 0.6%, a drop of 0.3 percentage points
- Mexico: Dramatically reduced from 1.4% to -0.3%, a drop of 1.7 percentage points
The IMF forecasts a slight rebound in global economic growth to 3.0% for 2026, but this remains significantly below the 2000-2019 average of 3.7%.
Key Factor: US Tariff Policies
The IMF clearly identified US tariff policies as the primary cause of these downward revisions. On April 2, 2025, US President Donald Trump announced a 10% tariff on virtually all imports and tariffs exceeding 145% on Chinese products. This represents the highest tariff levels in a century, causing significant disruption to the global trading system.
The IMF analyzed that these tariff policies would have the following impacts:
Demand and Supply Shocks
Tariffs transfer higher costs to US importers and consumers, increase production costs, and reduce productivity. This can particularly affect global supply chains, amplifying the ripple effects of cost increases.
Policy Uncertainty
Abrupt changes in tariff policies and the 90-day "reciprocal tariff" suspension period delay corporate investment decisions, worsen consumer and business sentiment, and exacerbate uncertainty. The IMF cited a previous case where uncertainty during the Trump administration in 2018 reduced US investment by 1.5%, expressing concern about similar effects now.
Regional Impacts
United States
The US is projected to see its growth rate fall to 1.8% while inflation rises to 3%. The IMF has increased the probability of a US recession from 25% to 37-40%, although it still considers recession avoidable. The main causes are reduced demand and decreased consumer confidence due to tariffs.
China
China's growth rate has been revised down to 4%, with the reduction in bilateral trade with the US expected to burden global trade growth. However, the Chinese government's fiscal stimulus measures may provide some buffering effect.
Eurozone
The Eurozone growth rate has been slightly reduced to 0.8%, with polarized outlooks showing 0% growth for Germany and 2.5% for Spain. While the impact of tariffs is relatively small, fiscal easing and consumption recovery are expected to contribute to growth.
United Kingdom
The UK's growth rate has been revised down from 1.6% to 1.1%, but it maintains the highest growth rate among G7 European countries. Domestic factors (increased government borrowing costs, reduced consumption) and tariff uncertainties have contributed to this adjustment.
Additional Risks and Inflation
Intensified Trade War
If tariffs and retaliatory measures expand, global trade growth could plummet to 1.7% in 2025, which is 1.5 percentage points lower than the January forecast.
Inflationary Pressures
US inflation is expected to rise from 2% to 3% due to tariffs, while global headline inflation is forecast to gradually decrease to 4.3%. If tariffs are not temporary, central banks' efforts to control inflation may become more difficult.
Financial Market Volatility
Following the tariff announcements, the S&P 500 fell by 9-10%, while long-term Treasury yields (US 10-year at 4.4%) maintain an upward trend. This could lead to asset revaluation and changes in capital flows.
IMF Recommendations
The IMF urged the reduction of trade tensions and the implementation of transparent trade policies to decrease uncertainty. Pierre-Olivier Gourinchas, IMF Chief Economist, emphasized that "if clarity and stability in trade policy are restored, economic prospects could improve immediately." He also warned that without a cooperative approach, growth and innovation could be hampered in the medium to long term.
Limitations and Critical Perspectives
The IMF's forecasts are based on data up to April 4, 2025, and do not reflect subsequent tariff suspensions and smartphone tariff exemptions, limiting the accuracy of the projections. Some economists suggest that tariffs could potentially drive domestic investment and create jobs in the short term, although the IMF warned of reduced productivity and competitiveness in the medium to long term.
Furthermore, tariff policies should be understood not merely as economic measures but as part of the US strategy to maintain global hegemony and compete geopolitically with China.
Conclusion
The IMF's warning clearly demonstrates the ripple effects of US tariff policies on the global economy. The world economy is likely to slow to a growth rate of 2.8% in 2025, with trade tensions centered on the US and China continuing to create uncertainty in financial markets and investment.
However, there is room for improvement in the outlook if temporary adjustments to tariff policies or cooperation between nations occur. The IMF noted that "we are entering a new era where the global economic system that has operated for the past 80 years is being reset," emphasizing the importance of international cooperation in responding to these changes.
