U.S. Tariffs and Global Economy

DUBAI (Reuters) – U.S. tariffs are an “evolving story” and it is too early to assess their impact on the world economy, said International Monetary Fund Managing Director Kristalina Georgieva on Tuesday.

> “It is an evolving story… What we have are elements of trade policy that we expected would come, that was announced in the election campaign, but there are many, many unknowns,” she told the World Government Summit in Dubai.

Georgieva noted that the world economy appeared remarkably resilient, despite a series of unprecedented shocks, stating, “So when I think of the impact on the world economy, my answer to you would be today, it’s too early to say.”

The outlook for inflation is also difficult to predict, she suggested.

> “Even on that, we just need to see how things evolve. Because if we are in the situation in which, in some parts of the world, there is a slowdown that may push central banks to bring interest rates down, that may actually not be inflationary.”

U.S. President Donald Trump has recently raised tariffs on steel and aluminum imports to a flat 25%, a move aimed at aiding struggling industries in the United States, but it poses the risk of igniting a multi-front trade war.