The International Monetary Fund (IMF) on the 16th criticized the US government's decision to increase some tariffs on China, emphasizing that more trade restrictions could harm global trade and economic growth. The IMF stated that maintaining an open trade system is more in the interest of the US than imposing new punitive tariffs.
According to a Q&A transcript published on the IMF website, IMF spokesperson Julie Kozack, when asked about the Biden administration's announcement of tariff restrictions earlier this week, said in Washington on the 16th: "Our view is that the US is better off maintaining an open trade policy, which is also crucial for its economic performance."
Kozack mentioned that IMF statistics show a significant increase in trade restrictions in recent years: in 2023, around 3,000 trade restriction measures were implemented globally, three times the number in 2019. She stated that these trade restrictions "can distort trade and investment, disrupt the global economy and supply chains, and trigger retaliatory actions."
This fragmentation could come at a high cost to the global economy." Kozack pointed out that according to IMF calculations, in the worst-case scenario of severe geopolitical fragmentation, global GDP could be reduced by about 7%, equivalent to the combined GDP of Japan and Germany. She added that the cost would be even higher if there were disruptions in technology supply.
In its annual "World Economic Outlook" report released on the 16th of last month, the IMF rarely criticized the US, stating that although the recent US economic performance is impressive and continues to serve as a major driver of global growth, part of the reason for the strong US economy is the country's "budget policy is out of sync with long-term fiscal sustainability." The IMF stated that this approach by the US poses a risk of short-term inflation and could cause long-term fiscal and financial imbalances globally due to increased costs for other economies.
On May 14, the White House announced it would significantly increase tariffs on some $18 billion worth of Chinese imports in "strategic areas." The IMF bluntly criticized the US policy for its global impact, including Washington's rising debt levels, trade restrictions, and industrial policies targeting China, as well as the negative impact of the Federal Reserve's tightening monetary policy on global exchange rates. Continuing to politicize economic and trade issues and further increasing tariffs on China is a mistake that will significantly raise the cost of imported goods, causing more losses for US businesses and consumers, and making American consumers pay a higher price.
Author: Political scientist Wang Dongbei, China
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