Talking about import duties is not enough, says the IMF: US, China and EU must adjust their own economic policy

Tariffsin other words: it was clear that it would mainly be about that during the spring meeting of the International Monetary Fund last week. Due to all the taxes and counter -duties, the IMF has considerably lowered his growth trunks for the global economy. The fund warned that the risks for all countries are « clearly downward » and called on all governments to « end the trade tensions as quickly as possible.

But the IMF meeting also made something else clear: behind the chaotic tax struggle of the United States with China, the European Union and dozens of other trading partners, there are many deeper problems for the global economy. With the closing of trading deals, tensions between the great economic powers of the world have not just disappeared.

What was frequently said at the IMF: the global economy has been in ‘imbalance’. That imbalance is about more than just trade flows. The US, China and the EU must adjust their domestic economic and financial policy to make the world economy more stable, was the message of the fund. In short: the US has to live less on the puff, China has to lean less on export and the EU has to make its own economy stronger.

The IMF leadership very carefully chose its words in the recommendations to the three economic superpowers. In particular, the US, the largest shareholder of the IMF, did not want to get rid of the head -sensitive times in these politics.

‘VS shortage must be reduced’

« Countries like the US must reduce their budget deficit, » said IMF chairman Kristalina Georgieva on Thursday. The US has had very large shortages on the budget for years. Over the past two years it involved more than 7 percent of GDP. Economists have been saying for some time that the US makes their trade deficit – which Trump hates so much – worse. Because the Government Dollars from Washington end up with citizens and companies, which, among other things, buy Chinese goods from it. For example, the US only imports more – and the trade deficit (the difference between export and import) grows further.

China, the IMF, must also work. That country must adjust his growth model, which has been based on export for decades. « China has to balance his economy more towards domestic consumption, » said Georgieva. That too has been said for years by economists: more Chinese domestic demand, and (relatively) less export would help to reduce Chinese trade surplus. The American trade deficit could also shrink.

The Chinese surplus on the so-called ‘current account’-which is mainly about the trade balance-was $ 423 billion in 2024, according to IMF data. That Chinese figure largely contributes to the US shortage in the current account of $ 1,133 billion.

Everywhere we look in the international global system we see an imbalance

What the IMF requires from China is easier said than done. Chinese consumers are wary of larger editions, among other things due to the ongoing crisis in the real estate market. The economic malaise of after the pandemic is again ‘old -fashioned’ by Beijing with an export offensive.

The EU, also a net exporter, also received the incentive from the IMF to generate more domestic growth. This requires the « internal barriers to trade », said Georgieva. This requires further integration of the European internal market.

Beary criticizes China

In Washington, the speech of Scott Bessent, the American Minister of Finance, who performed in the margin of the IMF meeting on Wednesday, was waiting in Washington.

« Everywhere we look in the international global system we see an imbalance, » said bessent. He knows this to China, that in unfairly, through state -financed export, the American industry would undermine. « China must change, » said Bessent. It must be ‘away from overcapacity in export’ and must ‘support his own consumers’.

The EU actually received a compliment from Bessent: recently announced European defense investments create a « new source of global demand ». He encouraged Europe to follow the recommendations of the former president of the European Central Bank, Mario Draghi, to strengthen the European economy.

The American minister Echode much of what the IMF said. And what about the US itself? Bessent did not leave the American side of the ‘imbalance’ in the world economy undiscussed. « We know that we should get our budget in order, » he said, blaming the previous Bides government. He promised to « fix » this. The strong question is whether this will succeed, with all tax cuts that Trump wants to implement.

American criticism of the IMF

At the IMF they also looked at Bessents Speech for another reason: the tense relationship of the Trump government with the IMF itself. In the background there is a fear that Trump will withdraw the US from the fund. He previously withdrawn his country, among other things, the World Health Organization. The Radical-Right Policy Agenda Project 2025-which often draws Trump-states that the US must leave the IMF and from sister organization World Bank, partly because they would interpret the ‘global elite’.

But Bessent said, to the relief of the IMF and World Bank Top, that he sees « lasting value » in both clubs. Well, Bessent said, they must both reform. The IMF should no longer be concerned with matters such as climate and social policy.

But doing less ‘climate’ is not just like that, the IMF itself believes, now that climate change is causing more damage in vulnerable countries. Georgieva mentioned the example of Barbados, which gets IMF support and where « natural disasters are very harmful to the economy ». The IMF does not pursue a climate policy, but wants to help countries to cover itself for climate damage, said Georgieva.

Bessent also said that the IMF China should call harder to order because of its « worldwide disruptive policy. » The IMF could not say that: China is a large, important member state that cannot simply be insulted. Well, Georgieva said, the IMF is working on a paper about support by the Chinese government to companies. This « in collaboration with the Chinese authorities. »

For example, the fund, in these times of geopolitical tensions, must run on eggs. It must keep the crumbling global economy a bit upright – and thereby keep all 191 Member States on board. Including the two kempans in Washington and Beijing.

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