IMF warns of significant US tariff impact on global macroeconomy

The International Monetary Fund (IMF) on Tuesday warned that U.S. trade tariffs will have negative impacts on global macroeconomy with limited effects on solving rising imbalances.

The IMF said in its annual External Sector Report that a further escalation of trade tensions, including with tariffs, would have significant negative macroeconomic effects, with limited efficacy in correcting global imbalances.

The report noted that in the short term, tariffs would reduce global demand, lead to a negative supply shock (especially for the imposing countries), and add to inflationary pressures through rising import prices.

In addition, unpredictability about tariffs poses risks to global investment and growth, separate from the level of tariffs. It can diminish domestic demand by undermining consumer and business confidence, increase financial market volatility, and lead to persistent appreciations of the U.S. dollar, with negative spillovers to economic activity in emerging markets, the report said.

In an accompanying blog, IMF chief economist Pierre-Olivier Gourinchas said a major risk for the global economy is that countries will instead respond to rising imbalances by further raising trade barriers, leading to increased geoeconomic fragmentation.

While the impact on global imbalances will remain limited, the harm to the global economy will be long-lasting, the IMF chief economist noted.

IMF warns of significant US tariff impact on global macroeconomy

IMF warns of significant US tariff impact on global macroeconomy

IMF warns of significant US tariff impact on global macroeconomy

IMF warns of significant US tariff impact on global macroeconomy

IMF warns of significant US tariff impact on global macroeconomy

IMF warns of significant US tariff impact on global macroeconomy

Canadian Prime Minister Mark Carney arrived in Beijing on Wednesday for an official visit to China through Saturday.

This visit marks the first trip to China by a Canadian Prime Minister in eight years.

When briefing on the visit of Carney, a Chinese foreign ministry spokesperson said President Xi Jinping will meet with the Canadian prime minister to provide new strategic guidance for further improving and developing China-Canada relations.

Chinese Premier Li Qiang and Chairman of China's National People's Congress Standing Committee Zhao Leji will hold separate talks and meetings with the Canadian prime minister to conduct comprehensive and in-depth exchanges on bilateral relations as well as issues of mutual interest.

The spokesperson said China looks forward to taking this visit as an opportunity to enhance dialogue and communication, increase political mutual trust, expand practical cooperation, properly manage differences, address each other's concerns and consolidate the momentum of improvement in China-Canada relations to bring greater benefit for the two peoples.

Canadian PM arrives in Beijing for official visit