The International Monetary Fund (IMF) diagnosed the tariff war initiated by Trump as a burden factor on the global economy.
Gabriel Makhlouf, IMF's first deputy managing director, noted during the G20 finance ministers and central bank governors meeting held in South Africa on 18th (local time) that 'downside risks and uncertainties are high.'
Earlier, the IMF downgraded its global economic growth forecast to 2.8% for this year and 3.0% for next year, reflecting policy uncertainty and trade conflicts caused by tariffs in the World Economic Outlook (WEO) report released in April.
U.S. President Donald Trump entered into a tariff war against countries worldwide with the goal of rerouting the conditions under which the United States trades with the world.
Makhlouf said, 'The trade conflict is manifesting negative effects,' adding, 'There is strong evidence that corporations rushed to export ahead of tariff increases and we have witnessed some trade rerouting.'
Trade rerouting refers to the phenomenon where products that were imported from countries with relatively lower production costs are now imported from countries with higher production costs due to the impact of tariff differences on import prices.
Makhlouf added, 'In the case of inflation, a continuous decline is expected due to decreased demand and falling energy prices, but this will vary by country.'