The global economic landscape faces profound uncertainty following the imposition of sweeping tariffs by the United States, a move that has already triggered retaliatory measures, market volatility, and warnings of severe disruption to international trade and supply chains.
The US policy shift, unveiled on April 2 under the banner of "Liberation Day", introduced a baseline 10 percent tariff, coupled with higher "reciprocal tariffs" targeting specific countries based on bilateral trade deficits. However, in a dramatic volte-face on April 9, the US announced a 90-day pause on the "reciprocal tariffs", claiming it needed time to negotiate deals with individual countries on the tariffs.
No such courtesy was extended to China, with the US escalating the tariffs on the nation's exports to 145 percent.
Major economies and international organizations have all expressed deep concern about the impact the tariffs will have on the global and domestic economies as the US pivots away from international trading norms.
China's commerce ministry quickly vowed countermeasures to "safeguard its own rights and interests."
The EU described the tariffs as a "major blow" and began preparing retaliatory steps. Japan's Prime Minister Shigeru Ishiba called the US move a "national crisis", while Australian Prime Minister Anthony Albanese criticized the baseline tariff as "completely unnecessary".
The tariffs have also injected a significant dose of unpredictability into the global economy.
"Uncertainty and volatility are undoubtedly contributing to a more cautious economic and business environment," World Bank President Ajay Banga recently told reporters, referring to market turbulence caused by the US tariff policy. He added this uncertainty would "certainly" lead to slower growth than previously expected.
Kristalina Georgieva, managing director of the International Monetary Fund, said a day after the tariffs were announced: "We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth."
By April 17, the eve of the Spring Meetings of the IMF and World Bank, Georgieva said that the trade tariff uncertainty was "literally off the charts".
"The world economy's resilience is being tested by the reboot of the global trading system that threatens to cause turbulence in financial markets," she said.