WASHINGTON — The International Monetary Fund is upgrading the economic outlook for the United States and the world this year and next because President Donald Trump’s protectionist trade policies have so far proven less damaging than expected.
The IMF now forecasts 3% growth for the global economy this year. That is down from 3.3% in 2024 but an improvement on the 2.8% it had forecast for 2025 back in April. The 191-country lender, which works to promote growth, stabilize the world financial system and reduce poverty, expects world growth to come in at 3.1% next year, up a tick from the 3% it had forecast three months ago.
Trump’s decision on April 2 – “Liberation Day,’’ the president called it — to impose taxes of 10% or more on U.S. imports from most of the world’s countries had been expected to be a bigger drag on global growth.
But the damage was limited, the IMF said, partly because many U.S. importers scrambled to bring in foreign goods before Trump’s tariffs took effect and partly because Trump ended up suspending his biggest levies (including a 145% duty on Chinese goods).
“This modest decline in trade tensions, however fragile, has contributed to the resilience of the global economy so far,” IMF chief economist Pierre-Olivier Gourinchas said at a press conference Tuesday. “This resilience is welcome, but it is also tenuous. While the trade shock could turn out to be less severe than initially feared, it is still sizeable, and evidence is mounting that it is hurting the global economy.”
Tariffs raised $108 billion for the U.S. Treasury from October through June, nearly double the $55.6 billion they brought during the same period of the previous fiscal year.
Global growth of around 3% is below pre-pandemic average and the world economy would be growing faster without Trump’s trade war