President Donald Trump’s far-reaching tariffs and the chain reaction of countermeasures they’ve triggered, if sustained, are likely to curb economic growth in the United States and the rest of the world this year, the International Monetary Fund said Tuesday.

Economic growth in the U.S. is forecast to slow to 1.8% in 2025, ninety basis points lower than the IMF’s prediction from January. In 2024, America’s economy grew at a pace of 2.8%.

Global growth is expected to fall to 2.8% in 2025 and 3% in 2026, also downgrades from the IMF’s previous forecast.

When Trump imposed individualized double-digit tariffs on trading partners across the globe, in addition to a 10% universal baseline tariff and 25% tariffs on foreign autos on April 2, he triggered what the IMF called “effective tariff rates to levels not seen in a century.”

Before April 2, which the president called “liberation day,” Trump had already imposed a series of tariffs on Canada, Mexico and China, as well as tariffs on steel and aluminum.

“This on its own is a major negative shock to growth,” the IMF said. “The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections.

Goldman Sachs CEO David Solomon said executives and clients have told him they want more clarity about the direction of policy and what eventual trade agreements will look like so they can make decisions for their businesses.

“This level of uncertainty is not good, it’s not healthy and it’s affecting investment spending and planning and that will have an effect on growth in the economy and we will see that, you know, in my opinion, relatively quickly if we can’t get to a higher level of certainty around this trade policy,” Solomon told CNBC.

Consistent with warnings from economists and executives that the cost of tariffs will be passed onto consumers, the IMF warned global inflation is now expected to decline at a slightly slower pace than previously forecasted.

Trump has acknowledged a “transition” will accompany his policies but insisted they will eventually usher in a new “golden age” of American manufacturing.

On Monday, Trump posted on social media, “Since our announcement of LIBERATION DAY, many World Leaders and Business Executives have come to me asking for relief from Tariffs. It’s good to see that the World knows we are serious, because WE ARE! They must right the wrongs of decades of abuse, but it won’t be easy for them. We must rebuild the Wealth of our Great Country, and create true RECIPROCITY. But for those who want the easiest path: Come to America, and build in America!”

Administration officials have been in talks with Japan, South Korea, Thailand, India, the European Union and others in an attempt to strike mutually beneficial trade deals while Trump’s “reciprocal” tariffs are temporarily paused. Simultaneously, China has tried to present itself as a more hospitable trading partner, an alternative already embraced by Spain and Vietnam.

“The path forward demands clarity and coordination,” the IMF said. “Countries should work constructively to promote a stable and predictable trade environment, facilitate debt restructuring, and address shared challenges. At the same time, they should address domestic policy and structural imbalances, thereby ensuring their internal economic stability.”

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