IMF Urges US to Ease Trade Curbs, Warns on Rising Debt Risks – SUCH TV

The International Monetary Fund on Wednesday called on the United States to work constructively with trading partners and pursue coordinated efforts to reduce trade restrictions, as it released its latest review of the world’s largest economy.

The findings cover the first year of President Donald Trump’s second term, during which his administration introduced sweeping tariffs aimed at reducing the US trade deficit and boosting domestic manufacturing.

However, the IMF noted that the stop-start nature of the tariffs has disrupted supply chains and unsettled financial markets.

The report was prepared before the Supreme Court of the United States struck down many of Trump’s earlier tariffs last week.

Since that ruling, the administration has imposed a new 10% global tariff under a separate legal authority, with the possibility of raising it to 15%.

Call for Coordinated Trade Approach

The IMF urged Washington to address concerns about unfair trade practices through cooperation rather than unilateral measures.

“Where trade and investment measures, including tariffs and export controls, are put in place for national security reasons, such policies should be applied narrowly,” the Fund said.

IMF Managing Director Kristalina Georgieva said the institution shares US concerns about the size of the trade and current account deficit, calling the gap “too big,” but emphasised the importance of coordinated solutions.

Debt and Stability Concerns

The IMF also flagged rising US public debt as a growing stability risk.

While the likelihood of sovereign stress remains low, the upward trajectory of the debt-to-GDP ratio and increasing short-term borrowing pose potential risks for both the US and the global economy.

Georgieva noted that continued growth in public debt “remains a major issue” that policymakers must address.

Growth Outlook

Despite trade uncertainty, the IMF projects US GDP growth of 2.6% in 2026, up from 2.2% last year.

The Fund described the economy as “buoyant” but cautioned that trade policy uncertainty could weigh more heavily on economic activity than anticipated.

The review was conducted as part of the IMF’s regular “Article IV” consultation process.

The Fund had previously raised concerns in 2024 about rising trade restrictions and increasing public debt under earlier administrations.