Global financial leaders went to Washington last week seeking clarification on what will be needed to obtain some relief from the tariff attack in several layers of the US President, and about the degree of suffering that will bring to the world economy.
Most, however, came home with more questions than answers.
Many participants in the US Spring International Fund (IMF) and World Bank meetings had a feeling that Trump’s government is still in conflict as to their demands for business partners affected by their comprehensive tariffs.
During the week, many finance and trade ministers tried to meet with US Treasury Secretary Scott Bessent and other important Trump government authorities. Those who met were often told to be patient – even with the end of the 90 -day break that Trump had granted to the highest tariffs approaching.
In fact, no agreement has been finalized throughout the week, although the Trump government announced the receipt of 18 proposals in writing and a complete agenda of negotiations.
“We are not negotiating. We are just presenting, discussing the economy,” said Poland Finance Minister Andrzej Domanski. He added that he emphasized “how bad this uncertainty is bad for Europe, for the US, that is, it is really bad for everyone.”
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Warning that tariffs-25% over all US imports of vehicles, steel and aluminum, and currently 10% over almost all the rest-would cause painful damage to the US and other major economies have not been listened to by US authorities.
“We know they think it won’t be that bad,” said Domanski. “They think it’s short -term pain and long -term gain. And I fear we’ll have short -term pain and long -term pain.”
The most substantial trade negotiations of the Trump government during the week were with Japan and South Korea, but the results were inconclusive, with bessento citing “productive” conversations with both countries.
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The IMF has adopted a slightly more optimistic view of the highest-rate economic consequences imposed by the US in more than a century, reducing growth forecasts for most countries in its world economic perspective report, but not even predicting recessions-even to the US and China, which is now dependent on exports, which now faces 145% US tariffs on many products.
IMF director-managing director Kristalina Georgieva acknowledged that member countries were concerned about the shock of uncertainty in a global economy affected by pandemic, inflation and wars, but maintained the hope that commercial negotiations would alleviate tariff tensions.
“We recognize that there is a work in progress to solve business disputes and reduce uncertainty,” Georgieva told reporters. “Uncertainty is really bad for business, so the sooner this cloud that hangs over our heads is removed, the better for profit, growth and the world economy.”
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Several financial authorities told Reuters that recession probabilities were higher than the 37% chance estimated by the IMF, citing private sector forecasts.
