IMF: Retaliatory tariffs shake Asia's economic outlook

The International Monetary Fund (IMF) warned that retaliatory tariffs could weaken Asia's economic outlook, raising costs and disrupting supply chains, even though the region remains a key growth engine for the global economy.

Workers work on an electric vehicle production line at a factory in Zhejiang, China in September 2024 - Photo: AFP

"Retaliatory tariffs threaten to disrupt growth prospects across the region (Asia), making supply chains longer and less efficient," IMF Asia- Pacific Director Krishna Srinivasan said on November 19 at a forum in Cebu, Philippines.

According to Reuters, Mr. Srinivasan's statement appeared in the context of concerns about US President-elect Donald Trump's plan to impose strong tariffs on imported goods.

Mr. Trump has announced that he will impose tariffs of up to 60% on Chinese goods and at least 10% on other countries.

High tariffs could hamper global trade, stifle growth in exporting countries and potentially risk raising inflation in the US, forcing the Federal Reserve to tighten monetary policy, making it difficult even when the global growth outlook is already bleak.

In October, the European Union (EU) also decided to increase taxes on Chinese electric vehicles to 45.3%, leading to retaliatory measures from Beijing.

In its latest Global Economic Prospects report, the IMF forecasts global economic growth at 3.2% for both 2024 and 2025.

This is lower than the growth forecast of 4.6% for 2024 and 4.4% for 2025 for the Asia region.

However, according to Mr. Srinivasan, Asia is "witnessing a period of important transition", creating many major uncertainties, including escalating tensions in trade issues between major partners.

He also assessed that uncertain monetary policies in advanced economies and expectations from related markets could influence monetary decisions in Asia, impacting global capital flows, exchange rates and other financial markets.

Source: https://tuoitre.vn/imf-thue-quan-tra-dua-lam-lung-lay-trien-vong-kinh-te-chau-a-20241119133540991.htm