According to The Guardiantariff measures and Trump’s protectionist approach could cause a loss of up to a billion dollars in world production.
This alarming figure is based on the impact that the «United States first» policies could have when clashes with already fragile financial systems, generating fears in the markets, leakage of investors and chaos in developing nations.â € ‹‹ ‹
The domino effect of tariffs
The IMF has indicated that Trump’s commercial policies, especially the tariffs that it would impose on various countries, have raised the effective tariff rate of the United States at the highest level in more than 100 years.
This situation has generated a significant volatility in financial marketswith US debt and actions, particularly technological, overvalued.
The coverage funds have made great bets that have gone wrong, forcing them to sell US Treasury bonds for cash, which deepens chaos in bond markets.
The IMF compares this situation with the «Cash» of March 2020 during the Covid-19 pandemic, When the Federal Reserve had to intervene directly in the US Treasury markets.
Impact on developing economies
Developing nations, which already face the highest indebtedness costs in a decade, could be forced to get even more expensive debts to cushion the blow of the new Trump tariffs. This increases the risk of a «sudden stop» in capital flows to these countriesexacerbating its economic vulnerability.â € ‹
In addition, the IMF has warned that the world economy will grow only 2.8% this year, below its previous prognosis of 3.3%, due to the uncertainty caused by Trump’s tariffs and the reprisals of some countries.
Internal and external reactions
Within the United States, a coalition of twelve states has filed a lawsuit before the International Trade Court to block tariffs imposed by Trump, arguing that these measures will negatively affect their economies and citizens.
On the other hand, the US Treasury Secretary, Scott Besunt, has criticized the IMF for its focus on issues such as climate change and gender equality, urging the institution to focus on monetary stability and balance of payments.
An uncertain panorama
The combination of aggressive tariff policies, volatility in financial markets and tensions with international institutions such as the IMF has created an uncertain global economic environment. The risk of a global recession increases, and the most vulnerable economies could suffer the most severe consequences.
In this context it indicates The Guardianit is essential that world leaders work together to mitigate risks and promote economic policies that foster stability and sustainable growth.