IMF Warns: U.S.-China Tariff War to Weaken Global Economy, Heighten Uncertainty
Washington, D.C. – April 22, 2025
The International Monetary Fund (IMF) has issued a stark warning about the impact of the ongoing tariff war between the United States and China, projecting a significant slowdown in global economic growth as a result of rising trade tensions and mounting policy uncertainty.
In its latest World Economic Outlook released Tuesday, the IMF downgraded its global growth forecast for 2025 to 2.8 percent, a sharp decline from the 3.3 percent projected in January. The report attributed the downward revision largely to the escalation in tariffs between the world’s two largest economies and the uncertainty surrounding their economic standoff.
“If sustained, the increase in trade tensions and uncertainty will slow global growth significantly,” said Pierre-Olivier Gourinchas, the IMF’s Chief Economist. “The surge in policy uncertainty is a major driver of the economic outlook.”
The economic outlook also forecasts sluggish growth for both the United States and China. The U.S. economy is now expected to grow by 1.8 percent, down from 2.7 percent, while China’s growth projection has been revised to 4 percent, down nearly half a percentage point from earlier estimates.
These revisions mark a concerning trend for the global economy and pose heightened risks for vulnerable economies, particularly in Africa and other developing regions. Many of these nations, heavily reliant on trade and foreign investment, are already feeling the ripple effects of the tariff dispute.
The IMF also noted that the U.S. has increased its average import tariffs to about 25 percent, the highest level in a century. These steep duties have disrupted international supply chains, increased costs for businesses and consumers, and created a volatile environment for global markets.
The organization further projected that by 2026, global growth could remain 3 percent, below the previous 3.3 percent estimate, should current conditions persist.
As the geopolitical tension continues to mount, the IMF emphasized the need for diplomatic resolution, urging the U.S. and China to de-escalate their trade conflict and work collaboratively to stabilize the global economy.
