The International Monetary Fund (IMF) has pointed out that trade sanctions against China negatively impact both the global and U.S. economies.
In a statement issued on June 27 following its annual consultation with the U.S., the IMF noted that the U.S. fiscal deficit is substantial enough to cause a continuous increase in the public debt ratio to Gross Domestic Product (GDP).
The IMF noted, “The ongoing expansion of trade restrictions and insufficient progress in addressing the vulnerabilities highlighted by the 2023 bank failures both pose important downside risks.”
Regarding trade policy, the IMF stated, “The U.S. should actively engage with its major trading partners to address the core issues—including concerns over unfair trade practices, supply chain fragilities, and national security—that risk undermining the global trade and investment system.”
The IMF criticized tariffs and non-tariff barriers for distorting trade and investment flows, which is detrimental to U.S. economic growth.
Meanwhile, according to Reuters, Kristalina Georgieva, the IMF’s Managing Director, predicted at a press conference that day that U.S. inflation would fall to the Federal Reserve’s (Fed) target level of 2% by mid-2025.
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