The International Monetary Fund (IMF) has twice in the last month downgraded its economic growth forecasts. This is true of all three economic superstars—the United States, Germany, and the United Kingdom. Economists and business leaders have long warned of the economic devastation that has resulted from US tariffs. In reaction to these warnings, the Administration’s been forced to respond by retaliating against these counter-countermeasures enacted by our trading partners. The IMF indicates that the unpredictable tariff policies under former President Donald Trump are likely to have a chilling effect on global economies.
As the IMF notes, these tariffs are already inflicting high growth costs in many important markets. Today, their impact is starting to be seen – and it’s an exciting time. The UK in particular has faced a dramatic slowdown due mainly to the impact of US tariffs. Surveys of purchasing managers revealed that the UK’s private sector output contracted, reflecting growing concerns among businesses regarding Trump’s tariffs.
In Germany, the PMI was at 49.7, signaling a private sector contraction. Analysts are pointing to the significant drop off in activity as evidence of a larger trend. In Germany and Britain, businesses are making fewer investments because they don’t know what is going to happen with US trade policy. This decline across these countries is likely due to a combination of factors, but US tariffs are the primary cause.
South Korea’s economic performance reflects these concerns, as the nation’s exports declined by 5.2% compared to the same period last year, according to South Korea’s Customs Service. This drop is an early indicator, or “key bellwether,” of trade trends to come, portending difficult economic times in the months ahead for other countries.
The broader eurozone economy has surprised on the upside. Yet surveys continue to show new orders falling at the fastest rate in history, as of 2025. This trend begs the question of how long the region can sustain this level of growth.
The IMF’s downwardly revised forecasts all but highlight the current risks that tariff-related tension are bringing to the global economy. Rob Wood is chief UK economist at Pantheon Macroeconomics. Nonetheless, for all this low growth, he does not foresee a UK recession in the near future. This point of view provides a ray of sunshine in a cloudy economic forecast.
These surveys were conducted between April 9 and April 22, 2020. This data has led to an outcry of concern and shown an overwhelming need to change policies to lessen the harmful impact caused by tariff policies. Countries are continuing to chart their way through a rocky economic transition. The IMF’s findings are a sobering reminder of how interconnected our global markets have become and just what’s at stake through continuing trade disputes.