It is expected that the global economy will slow down this year and to have expected higher inflation than before. This is based on the new forecasts from the International Monetary Fund, which will demonstrate the global failure of the US trade war.
The growth forecasts that are to be published at the beginning of next week will provide the previous indication of the damage that President Trump's economic policy has for global production. Since taking office in January, Mr. Trump has imposed a wide range of tariffs for most trading partners in America, while she is even higher by imports from China, Canada and Mexico.
“Our new growth projects will include remarkable degrees, but no recession,” said Kristalina Georgieva, the IMF managing director, on Thursday in a speech before the spring sessions of the IMF and the World Bank. “We will also see markups for the inflation forecasts for some countries.”
Ms. Georgieva's comments contributed to a growing choir of top economic officials, including the heads of the Federal Reserve and the World Bank, which this week triggered alarms about the potential damage that Mr Trump's policy could cause.
The European Central Bank reduced interest rates on Thursday and said that “the prospects for growth have deteriorated due to increasing trade voltages.” Central bankers, finance minister and other political decision -makers will gather in Washington next week while they continue to deal with the reaction.
Ms. Georgieva was careful in her criticism of the policy of the Trump government, which has widespread companies for companies and disrupt international supply chains. But she made her concerns clear about the costs of protectionism.
“Ultimately, the trade is like water,” said Ms. Georgieva. “If countries set up obstacles in the form of tariff and non-tariff obstacles, the river derives.”
She added: “Some sectors in some countries can be flooded by cheap imports; others can deficiency. The trade continues, but disorders are incurred.”
Ms. Georgieva's speech came when organizations such as the IMF and the World Bank are confronted with new questions about their livelihood, partly due to new skepticism of the United States about the value of international financial institutions. As the largest economy in the world, the United States plays a leading role in steering the direction of the IMF and the World Bank, but some of their initiatives on climate change and other political affairs contradict the priorities of the Trump administration.
In her comments, Ms. Georgieva admitted that jobs had caused a feeling of injustice in some places with earlier decades of liberalized trade and globalization, which caused concerns about national security and independence to reserve the protectionism. She argued that such guidelines put a strain on smaller economies and emerging countries, increase prices all over the world and dampen productivity.
“In trading policy, the goal must be to secure a settlement among the greatest players, keep openness, and a flat field-to restart a global trend towards lower tariff rates and at the same time reduce non-tariff barriers,” said Ms. Georgieva.
Jerome H. Powell, the chairman of the Federal Reserve, said on Wednesday that the US Central Bank weighs in a similar way to navigate in a situation in which Mr. Trump's customs duties could lead to slower growth and higher inflation.
“We may be in the challenging scenario where our double goals are in tension,” said Powell in the Economic Club of Chicago. “If this were done, we would consider how far the economy is from each goal and the potentially different time horizons, which would be closed by which these respective gaps would be closed.”
On Thursday morning, Mr. Trump Mr. Powell struck Mr. Powell and said that the Fed chairman was wrong not to reduce interest rates in the United States. He added that Mr. Powell's “termination cannot come quickly enough!”
It is expected that slower global growth requires a particularly hard tribute in developing countries that have only slowly emerged from pandemic. Their problems are exacerbated by the fact that they are now exposed to foreign aid from the United States before a withdrawal of foreign help.
Ajay Banga, the President of the World Bank, asked the developing countries this week to reduce their traders in order to avoid higher US tariffs and maintain their own regional trade relationships because the international trading system is under pressure. He also noted that he had expected global growth this year will be weaker than before.
“The countries have to take care of negotiations and dialogue,” Mr. Banga told reporters on Wednesday. “It will be really important in this phase, and the faster we do, the better it gets.”