IMF warns of ‘major negative shock’ from Trump’s tariffs

Donald Trump’s tariffs have unleashed a “major negative shock” into the world economy, the International Monetary Fund has said, as it cut its forecasts for US, UK and global growth. Publishing the latest edition of its World Economic Outlook, the Washington-based IMF cut its forecast for global GDP growth to 2.8% for this year – 0.5% weaker than it was expecting as recently as January. The IMF said that while its forecasts had been prepared on the basis of current trade policy, “intensifying downside risks dominate the outlook”. Given the lack of clarity about the future direction of the policy, it predicted that companies throughout the global economy were likely to respond by cutting spending. The IMF expressed concern in the report about the shock waves unleashed in financial markets by Trump’s trade policies – and said worse may be to come.