Easing tensions in trade relations
The Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG), drawing hundreds of global financial leaders, are taking place from April 21 to 26 in Washington, D.C. According to Josh Lipsky, Director of the Atlantic Council’s GeoEconomics Center, this year’s meetings stand apart from previous editions, with a singular, overarching theme of tariffs and bilateral trade negotiations.
The IMF and World Bank (WB) meetings, along with side discussions among financial leaders from the G20—the world’s leading developed and emerging economies—serve as crucial platforms for coordinating strong policy responses during times of crisis, such as the COVID-19 pandemic and the 2008–2009 global financial crisis.
Policy experts note that this year’s delegations are prioritising the strengthening of their domestic economies, aiming to shield themselves from potential fallout in international trade relations. Japan, currently under pressure from the US’s 25% tariff on cars and steel under President Donald Trump’s administration, along with reciprocal tariffs on other goods of up to 24%, is seeking to swiftly reach a tariff agreement with the White House.
With negotiations progressing, Japanese Finance Minister Kato Katsunobu is expected to meet his U.S. counterpart, Scott Bessent, on the sidelines of the IMF/WBG meetings to advance bilateral talks.
World Bank President Ajay Banga emphasised that lowering tariffs is the best solution for the global population. He pointed out that many developing nations still maintain significantly higher import tariffs compared to developed economies, risking retaliatory measures that could undermine competitiveness and hinder global economic integration.
Historically, open economies have demonstrated stronger growth and greater resilience to economic shocks. Banga stressed that countries must actively engage in trade negotiations and dialogue, avoiding the creation of trade barriers.
In its Global Financial Stability Report (GFSR), released during the 2025 Spring Meetings, the IMF assessed that global financial stability risks have increased significantly due to tighter financial conditions and heightened economic uncertainty. The Fund urged regulators to remain vigilant in the face of potential crises. It warned that emerging market economies could be severely impacted by sudden increases in borrowing costs. It also noted that investor concerns over public debt sustainability and other vulnerabilities within the financial sector could worsen.
On the sidelines of the meeting, the IMF unexpectedly downgraded its 2025 global growth forecast to 2.8%, 0.5 percentage points lower than its January projection. For 2026, growth is forecast at 3%, down by 0.3 percentage points.
The IMF also revised its growth forecast for the US to 1.8% for 2025, a drop of 0.9 percentage points from the January figure, and 1.7% for 2026. At the same time, it raised its inflation forecasts for the world’s largest economy to 3% and 2.5% for 2025 and 2026, respectively.
The international financial institution emphasised that these projections are due to growing policy uncertainty, which has exacerbated trade tensions and weakened demand.
IMF Chief Economist Pierre-Olivier Gourinchas stated that current trade policy uncertainty is a major drag on global trade. He stressed that to promote global economic growth, the foremost task of today’s policymakers is to ease tensions in trade relations and tariffs.
NDO
