WASHINGTON: Global finance leaders came to Washington this past week seeking clarity on what it would take to get some relief from President Donald Trump’s multi-layered tariff assault and on just how much pain it will bring to the world economy. Most headed home with more questions than answers.
Many participants in the International Monetary Fund and World Bank Spring Meetings had a sense that Trump’s administration was still conflicted in its demands from trading partners hit with his sweeping tariffs, Reuters reported.
During the whirlwind week, many finance and trade ministers sought to meet with U.S. Treasury Secretary Scott Bessent and other key Trump administration officials, to no avail. Those that did were often told to be patient - even as the clock steadily ticks down on the 90-day pause Trump had granted on the steepest levies.
Indeed, not a single deal was finalized over the course of the week despite the Trump administration touting the receipt of 18 written proposals and a full slate of negotiations.
“We are not negotiating. We are just presenting, discussing the economy,” said Polish Finance Minister Andrzej Domanski. He added that he stressed “how this uncertainty is bad for Europe, for the U.S. I mean, it’s actually bad for everyone.”
Warnings that the tariffs - 25 per cent on all U.S. imports of vehicles, steel and aluminum and currently 10 per cent for most everything else - would cause painful damage to the U.S. and other major economies went largely unheeded by U.S. officials. “We know that they think - that it won’t be that bad,” Domanski said. “They think it’s a short-term pain, long-term gain. And I’m afraid that we’ll have short-term pain, long-term pain.”
The Trump administration’s most substantial trade negotiations during the week were with Japan and South Korea, but the results were inconclusive as Bessent cited “productive” talks with both countries. Specific currency targets for the Japanese yen were not discussed, but both countries’ currency policies are expected to be part of future talks as the U.S. sees currency weakness against the dollar as a nontariff barrier to American exports.
The IMF took a slightly more optimistic view of the economic fallout from the highest U.S. tariffs in more than a century, slashing growth forecasts for most countries in its World Economic Outlook but stopping far short of predicting recessions - even for the U.S. and export-dependent China, which now faces U.S. tariffs of 145 per cent on many goods.
IMF Managing Director Kristalina Georgieva acknowledged that member countries were anxious about the uncertainty shock to a global economy buffeted by pandemic, inflation and wars but held out hope that trade negotiations would ease the tariff strains.
“We recognize that there is work under way to resolve trade disputes and reduce uncertainty,” Georgieva told reporters. “Uncertainty is really bad for business, so the sooner there is this cloud that is hanging over our heads is lifted, the better for profit, for growth, for the world economy.”
The IMF took a slightly more optimistic view of the economic fallout from the highest U.S. tariffs in more than a century, slashing growth forecasts for most countries in its World Economic Outlook but stopping far short of predicting recessions - even for the U.S. and export-dependent China, which now faces U.S. tariffs of 145 per cent on many goods.
IMF Managing Director Kristalina Georgieva acknowledged that member countries were anxious about the uncertainty shock to a global economy buffeted by pandemic, inflation and wars but held out hope that trade negotiations would ease the tariff
strains.