At the annual meetings of the International Monetary Fund and World Bank, multiple economic issues topped the agenda, such as slow growth, rising debt, and escalating conflicts. However, discussions largely focused on the potential impacts of Donald Trump’s possible return to power in the upcoming U.S. presidential election in November.
Concerns are centered on Trump’s potential to bring radical changes to the global financial system, including imposing substantial tariff increases, issuing massive debt, and pursuing policies that counter climate action, which would promote increased fossil fuel production. Kazuo Ueda, Governor of the Bank of Japan, commented, “There is growing concern over who will be the next president and what policies the new administration will adopt.”
Trump has pledged to impose tariffs of up to 10% on imports from all countries and 60% on imports from China, which could severely disrupt global supply chains and potentially trigger retaliatory measures that would increase costs worldwide.
To rally American voters, Trump has also proposed multiple tax incentives, ranging from extending the 2017 tax cuts to exempting certain income from taxation. Financial experts suggest these changes would add at least $7.5 trillion to U.S. debt over the next decade.
In contrast, a Harris victory is seen as a continuation of President Biden’s policies aimed at strengthening international cooperation in areas such as climate, taxation, and banking reforms, with a comparatively lower impact on debt growth.
Concerns are also rising over a potential trade conflict that could complicate global efforts to control inflation. The Governor of the South African Reserve Bank stated, “If one country imposes tariffs, it could lead to similar responses from other countries, resulting in higher prices and making inflation control more challenging.”
The Chair of the IMF’s Steering Committee and Saudi Finance Minister emphasized the importance of maintaining continuous dialogue with the U.S. administration, whether Republican or Democratic, expressing confidence in the international community’s ability to collaborate in addressing these economic challenges.
