The International Monetary Fund (IMF) has urged the United States to work with trading partners to ease tariffs and other trade restrictions, warning that ongoing barriers could weigh on economic growth and global stability. The recommendation was included in the IMF’s review of the world’s largest economy, covering the first year of former President Donald Trump’s second term.
The report highlighted that Trump’s administration implemented broad tariffs on allies and competitors in a bid to reduce the US trade deficit and promote domestic manufacturing. While the measures aimed to strengthen the economy, the IMF noted they disrupted supply chains and financial markets.
“Where trade and investment measures, including tariffs and export controls, are applied for national security reasons, such policies should be narrowly targeted,” the IMF said, urging Washington to collaborate with partners to address concerns over unfair trade practices and coordinate reductions in trade and industrial policy distortions.
IMF Managing Director Kristalina Georgieva met with Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell ahead of the report’s release. She stressed that the fund shares the administration’s concern over the size of the US trade and current account deficit, describing the gap as “too big.”
Georgieva also warned that rising public debt remains a “major issue,” noting that while the risk of sovereign stress is low, increasing levels of short-term debt relative to GDP represent a growing stability risk for both the US and the global economy.
The IMF projected US GDP growth at 2.6 per cent in 2026, up from 2.2 per cent in 2025, but cautioned that uncertainty over trade policy could act as a larger-than-expected drag on activity. The report highlighted “continued strong productivity growth,” while acknowledging that the 2025 government shutdown dampened fourth-quarter performance.
The IMF’s review follows recent legal developments, including a Supreme Court ruling that struck down several of Trump’s tariffs, prompting him to invoke a separate law to impose a 10 per cent global tariff, with threats to raise it to 15 per cent. Georgieva confirmed the fund would assess the impact of these changes.
In addition to trade, the IMF reiterated concerns over public debt levels and previously urged US policymakers to consider tax reforms and other measures to maintain fiscal stability and sustain long-term growth.
