IMF Urges Action on Trade Tensions, Calls for U.S.-China Agreement

IMF Managing Director Kristalina Georgieva emphasized the urgent need for the United States and China to resolve trade tensions and establish a fairer, rules-based trading system, highlighting ongoing grievances related to intellectual property and non-tariff barriers. She warned that heightened trade barriers and uncertainty are harming global economic stability, especially for smaller and emerging economies heavily reliant on trade, as well as for low-income countries facing declining aid flows. The IMF’s upcoming World Economic Outlook is expected to include notable markdowns in growth projections, though not a recession, reflecting the negative impact of trade disruptions. Georgieva encouraged countries to pursue lower tariffs, reduce non-tariff barriers, and engage in bilateral or plurilateral agreements to rebuild trust and openness in the global trading system. She also noted positive steps such as India’s recent moves to lower trade barriers, which could support its growth and potentially encourage similar actions elsewhere. The IMF’s overall message is that global cooperation and reduced trade friction are crucial for economic resilience and growth.