International Monetary Fund (IMF) managing director Kristalina Georgieva has called on countries to avoid imposing tariffs, in the context of US President Donald Trump's recent announcement of a series of new controversial trade measures.
Speaking at a press conference on October 16 (local time), Georgieva said that the world's largest economy "is choosing to use tariffs as a tool in its relations with partners", warning that this move could increase domestic prices and threaten global economic stability.
The head of the IMF stressed that countries should follow the national dominance rule in international trade. She said that the tax could only be effective if the economy was very large and comparatively closed, but even so, negative consequences for inflation were inevitable.
If trade tensions break out, it will definitely have a negative impact, Georgieva said, referring to the ongoing trade war between the US and China.
President Trump recently imposed a so-called collision tax on dozens of countries that he accused of taking advantage of the US through unfair trade practices. The new measures include a 50% tax on most imports from India and Brazil, along with the threat of increasing Chinese goods by 100% in the coming time.
Trump said that part of this tax policy is aimed at pressuring India to stop buying oil from Russia and supporting the sanctions Washington is imposing on Moscow. However, the Indian Foreign Ministry has rejected Mr Trump's claim that Prime Minister Narendra Modi had pledged to follow this request.
The IMF believes that using tariffs as a political and economic tool will only make the global supply chain more unstable. Georgieva recommends that countries maintain fair trade cooperation to avoid falling into a returned spiral, damaging growth and pushing up consumer prices.
