The IMF warned Canada and Mexico are vulnerable to “significant adverse economic impact” if President Donald Trump sustains tariffs on those countries given their exposure to US markets.
Trump’s plans to use tariffs against its closest trading partners, as well as China and others, is already causing increased financial volatility and global uncertainty, International Monetary Fund spokeswoman Julie Kozack said yesterday during a regular press briefing.
The comments on Trump’s second-term policy blitz are among the first by the Washington-based fund. Its mandate includes providing global economic monitoring and analysis for its roughly 190-members, among which the US is the largest and most influential.
The Trump administration’s rollout of tariffs on America’s biggest trading partners has been beset by delays and possible carve-outs, as the president leaves the door open to negotiations while creating confusion among investors and importers.
That confusion can also have negative impacts, Kozack added, as sustained periods of uncertainty can lead households and companies to hold back spending.
The fund plans to provide a fuller analysis of US trade policies when it releases its updated World Economic Outlook in April, when it will host global policymakers for its spring meetings in Washington.
“If sustained, the impact of the US tariffs on Canada and Mexico can be expected to have a significant adverse economic impact on those countries given their very strong integration and exposure to the US market,” Kozack said.
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