Donald Trump’s new import tariffs threaten to global trade, U.S. economy: IMF

Vastavam web: The International Monetary Fund warned on Thursday that U.S. President Donald Trump’s new import tariffs threaten to undermine the global trading system, prompt retaliation by other countries and damage the U.S. economy. “Let us not understate the macroeconomic impact,” IMF Director Christine Lagarde said, saying the tariffs will have a larger economic toll if they prompt retaliation from trading partners like Canada and Germany.

The IMF, in a review of U.S. economic policy, also took a much less optimistic view on America’s economic growth potential than that of the Trump administration. Trump has riled key allies by pursuing protectionist trade policies, including the imposition of steel and aluminum tariffs on the European Union, Canada and Mexico.

“These measures are likely to move the globe further away from an open, fair and rules-based trade system, with adverse effects for both the U.S. economy and for trading partners,” the Washington-based international lender said. Trump stunned his counterparts by backing out of a joint communique agreed by Group of Seven leaders in Canada last weekend that mentioned the importance of free, fair and mutually beneficial trade.

The Trump administration’s trade dispute with China has also yet to be resolved. The United States is expected on Friday to unveil revisions to an initial tariff list targeting $50 billion of Chinese goods.China on Thursday urged the United States to make a “wise choice,” saying it was ready to respond if Washington chose confrontation. Elsewhere in its analysis, the IMF stuck to its April forecast that the U.S. economy will grow at a 2.9 percent pace in 2018. It forecasts economic growth rates over the long term of 1.7 percent while the Trump administration sees them closer to 3 percent.