IMF Warns of Trade Tariffs' Impact on Asia

The International Monetary Fund (IMF) has warned that 'tit-for-tat' tariffs could significantly undermine the economic prospects of the Asia-Pacific region, potentially raising costs and disrupting supply chains. IMF Asia-Pacific Director Krishna Srinivasan expressed concerns about U.S. President-elect Donald Trump's proposed 60% tariff on Chinese goods and at least a 10% levy on all other imports, stating that such measures could harm global trade and inflate costs in the U.S., leading to tighter monetary policy. The IMF's forecasts show global growth at 3.2% for 2024 and 2025, while Asia is projected to grow at 4.6% and 4.4% respectively, highlighting a contrast that underscores the region's vulnerability amid trade tensions. Recent tariff increases by the European Union on Chinese electric vehicles have further escalated the situation, prompting retaliation from Beijing. Srinivasan emphasized that long-term fragmentation in trade would negatively impact all countries involved, including those heavily reliant on trade with the U.S. and China, like the Philippines. The IMF described Asia as undergoing a critical transition, marked by rising uncertainties and the acute risks associated with escalating trade disputes.