Economists Warn of Tariff Effects on Global Economy

Concerns are mounting over escalating trade tensions and tariff proposals between the U.S. and China, with significant economic implications highlighted by various experts. Gita Gopinath from the IMF warned that increased tariffs could hinder global economic growth and exacerbate inflation, with output levels projected to decline significantly if trade conflicts escalate. Treasury Secretary Janet Yellen echoed similar sentiments, emphasizing that tariffs would raise domestic prices and diminish U.S. export competitiveness, describing isolationism as detrimental to both the U.S. and global economies. Meanwhile, presidential candidate Donald Trump's proposed tariffs, including a sweeping 20% on all goods and up to 100% on certain imports, are viewed by analysts as likely inflationary, potentially disrupting ongoing disinflation trends and leading to higher interest rates. The IMF has documented a rise in trade-distorting measures from major economies since 2019, underscoring the harmful effects on both the implementing nations and the global market. Overall, economists warn that both increased tariffs and trade policy uncertainty could stifle economic activity and investment.