The IMF says the global economy is set for a slowdown

The sharp rise in tariffs since the start of the year marks the onset of a new era that will see most economies grow more slowly than previously expected, with the US suffering one of the largest hits to its prospects, the International Monetary Fund said Tuesday. 

President Trump has announced a torrent of new duties on imports since taking office 3 months ago, in some cases provoking counter measures from the countries that his tariffs targeted.

In its quarterly report on the outlook of the global economy, the IMF said that US tariffs now exceed the highs that they reached during the Great Depression. In its forecasts published on Tuesday, April 22, the International Monetary Fund (IMF) projected global growth at 2.8% in 2025 and 3% in 2026.

These figures take into account all tariff measures announced up to April 4 by US President Donald Trump and his administration. In just three months, the IMF has revised its 2025 and 2026 forecasts downward by 0.5 and 0.3 percentage points, respectively.

The sharpest decline is in the United States, where growth is now projected at 1.8% in 2025, down from the previously expected 2.7%. However, this drop is not due to tariffs alone. The eurozone, less severely affected, is expected to grow by 0.8% – 0.2 percentage points below earlier forecasts.

China’s growth is also revised downward, from 4.5% to 4%. Pierre-Olivier Gourinchas, the IMF’s chief economist, urges countries to “review the trade system” and develop new rules to resolve ongoing tensions.

It seems that all world economies are expected to grow slower, but that each economy has their own factors affecting their direction. Tariffs by themselves are not the singular factor.

It is possible that the IMF could be mistaken in their projections, but for now, the signs for the world’s economy look ominous.