The International Monetary Fund (IMF) is urging the United States to work with its trading partners to ease trade restrictions. That is one of the conclusions of the IMF's review of the world's largest economy, which covers the first year of Donald Trump's second term.
Trump has imposed sweeping tariffs on both allies and competitors in the past year in an effort to reduce the US trade deficit and boost domestic production. But Trump's frequent use of the tariff hammer has created turmoil in supply chains and financial markets around the world.
- Where trade and investment measures (including tariffs and export controls) are imposed for national security reasons, such policies should be applied narrowly, the IMF urges.
Over the year, the Trump administration also sought to reduce reliance on unauthorized foreign labor and reduce the federal government's role in the economy, the IMF notes in the new report.
Report written before the Supreme Court ruling
IMF Managing Director Kristalina Georgieva says the report was prepared before the US Supreme Court on Friday struck down many of Trump's tariffs.
Since his defeat in the Supreme Court, Trump has used another law to impose a new global tariff of 10 percent, which he has also threatened to raise to 15 percent.
The IMF shares the Trump administration's concerns that that the US trade deficit is too large. The increase in public debt remains a major problem that should be kept in mind, according to the IMF.
The IMF expects US gross domestic product (GDP) growth to reach 2.6 percent in 2026, an increase of just over two percent from last year.
GDP is an expression of the size of a country's economy and is the most widely used key figure to measure it. Increases or decreases show whether the economy is growing or shrinking.
/ritzau/AFP
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