Washington: International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Thursday urged countries to swiftly resolve trade disputes that threaten global economic growth. She stated that the unpredictability arising from President Donald Trump's aggressive campaign of taxes on foreign imports was causing companies to delay investments and consumers to hold off on spending. "Uncertainty is bad for business," she told reporters during a briefing at the spring meetings of the IMF and its sister agency, the World Bank.
According to News Agency of Nigeria, Georgieva's comments came two days after the IMF downgraded the outlook for world economic growth this year. The 191-country lending organizations, which seek to promote global growth, financial stability, and reduce poverty, also sharply lowered its forecast for the United States. It reported that the chances of the world's biggest economy falling into recession have risen from 25 percent to about 40 percent.
Georgieva warned that the economic fallout from the trade conflict would fall most heavily on poor countries, which lack the financial resources to offset the damage. Since returning to the White House in January, Trump has aggressively imposed tariffs on American trading partners. Among other actions, he imposed a 145 percent import tax on China and 10 percent on almost every country, raising U.S. tariffs to levels not seen in more than a century.
However, Trump has repeatedly changed U.S. policy, suddenly suspending or altering the tariffs. This has left companies uncertain about his objectives and the potential outcomes. Trump's tariffs marked a sharp reversal of decades of U.S. policy in favor of free trade, and the resulting uncertainty led to a week-long rout in financial markets. Yet, stocks rallied on Wednesday after the Trump administration signaled its openness to reducing the massive tariffs on China. "There is an opportunity for a big deal here," U.S. Treasury Secretary Scott Bessent remarked on Wednesday.