Global lender warns Washington to coordinate with allies on easing trade curbs, saying rising public debt and policy uncertainty pose growing risks at home and abroad….
The International Monetary Fund has called on the United States to repair strained trade relationships and pursue a coordinated rollback of trade barriers, cautioning that escalating tariffs and mounting public debt could threaten economic stability both domestically and globally.
In its latest annual assessment of the world’s largest economy, the IMF examined the first year of President Donald Trump’s second term, a period marked by sweeping tariff actions aimed at shrinking the US trade deficit and reviving domestic manufacturing.
While those measures were designed to strengthen American industry, the stop-start rollout of tariffs has rattled financial markets and disrupted global supply chains. The Fund urged Washington to engage constructively with trading partners to address concerns over unfair practices while working toward a coordinated reduction in trade restrictions and industrial policies that spill across borders.
Where tariffs or export controls are introduced for national security reasons, the IMF said, they should be narrowly targeted and carefully applied.
IMF Managing Director Kristalina Georgieva noted that the report was finalized before the Supreme Court of the United States moved to strike down several of the administration’s tariff measures last week. Since that decision, Trump has invoked a separate legal authority to impose a new 10 percent global tariff and signaled it could rise to 15 percent.
Georgieva said she met with Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell ahead of the report’s release. She acknowledged that the IMF shares the administration’s concern about the size of the US trade and current account deficits, describing the current account gap as “too big.”
Beyond trade policy, the Fund flagged the steady rise in public debt as a pressing concern. Although the immediate risk of sovereign stress remains low, the IMF warned that the upward trajectory of the debt-to-GDP ratio, combined with growing levels of short-term borrowing represents a mounting stability risk for both the United States and the wider global economy.
Despite these headwinds, the IMF projects US economic growth will accelerate to 2.6 percent in 2026, up from 2.2 percent last year. The economy, it said, remains buoyant, supported by solid productivity gains even as a government shutdown weighed on activity in the fourth quarter.
Still, the Fund cautioned that persistent uncertainty around trade policy could prove a heavier drag on growth than currently anticipated.
The IMF last issued formal policy recommendations on the US in 2024, when it also warned about expanding trade restrictions under then-President Joe Biden and called for steps to reverse the rise in public debt, including potential tax reforms.
Its latest message to Washington is pointed but measured: the US economy remains resilient, but sustained trade friction and rising debt levels could erode that strength unless policymakers act with greater coordination and clarity.
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