IMF: Tariffs could undermine growth, raise inflation

The International Monetary Fund warned today that imposing tit-for-tat tariffs could undermine Asia’s economic prospects, raise costs and disrupt supply chains even as it expects the region to remain a major engine of growth for the global economy.

“Title-for-tat tariffs threaten to derail growth prospects across the region, leading to longer and less efficient supply chains,” Krishna Srinivasan, the IMF’s director for Asia and the Pacific, said at a forum in Cebu on systemic risks.

Srinivasan’s comments come amid concerns about US President-elect Donald Trump’s plan to impose a 60% tariff on Chinese goods and at least 10% on all other imports, according to CNBC.

The tariffs could hamper global trade, hamper growth in exporting countries and could lead to higher inflation in the United States, forcing the Federal Reserve to tighten monetary policy despite a bleak outlook for global growth.