Trump tariffs could slash half-point from economic growth, IMF warns

The International Monetary Fund (IMF) fears that active and potential tariffs between the U.S. and China could hinder global economic output by 0.5 percent in 2020. 

IMF Managing Director Christine Lagarde said in a blog post that this could be a global loss of $455 billion, which is larger than the size of South Africa’s economy.

{mosads}”There is strong evidence that the United States, China, and the world economy are the losers from the current trade tensions,” Lagarde wrote. 

“These are self-inflicted wounds that must be avoided,” she added, saying that this can be accomplished by removing trade barriers and avoiding future ones. 

She also noted that President Trump’s recently proposed tariffs on Mexico are “of concern.”

Trade negotiations between the U.S. and China fell apart last month. The U.S. then raised tariffs from 10 percent to 25 percent on $200 billion in Chinese products. China followed up by targeting $60 billion in U.S. agricultural exports.

Trump last week announced that he would implement a 5 percent tariff on Mexican exports starting June 10 unless Mexico works to halt illegal crossings of the U.S. border. The tariffs would rise to 25 percent by October under Trump’s plan.