IMF urges global leaders to resolve trade tensions rapidly, as China tells US to ‘cancel all unilateral tariffs’ – as it happened (2025)

Time for a recap…

Anxiety over Donald Trump’s trade wars continues to grip policymakers.

The International Monetary Fund has urged global leaders to resolve trade tensions rapidly.

Speaking at the IMF’s Spring Meeting in Washington, managing director Kristalina Georgieva said “the first and most urgent priority” is “for countries to work constructively to resolve trade tensions as swiftly as possible, preserving openness and removing uncertainty”.

She added:

A trade policy settlement among the main players is essential, and we are urging them to do it swiftly, because uncertainty is very costly.

Georgieva, who described the mood at the Spring Meeting as “anxious”, also urged Beijing to “pull back from too much intervention”, and rebalance its economy towards more domestic consumption.

However, China has instead squashed hopes of an immiment breakthough. Beijing said that the US should “completely cancel all unilateral tariff measures” if it wants trade talks.

China also insisted that reports of ongoing US tariff talks were ‘baseless’. He Yadong, a spokesperson for China’s ministry of commerce, said:

There are currently no economic and trade negotiations between China and the United States.

Any claims about progress in China-US economic and trade negotiations are baseless rumors without factual evidence.

In her latest global policy agenda, Georgieva also warned that trade tensions could test the economic and financial stability of individual countries and the world economy, and the resilience of the International Monetary System (IMS).

Germany’s government highlighted those risks today, by cutting its growth forecast for this year to zero.

Companies are lining up to report the damage from tariffs.

Unilever and Nestlé have raised prices for consumers – and indicated further increases could be on the way amid cost inflation and Donald Trump’s tariff war.

Pepsico cut its profit guidance for the year, while consumer goods maker lowered its sales and profit forecast.

In the financial markets, Wall Street is rallying today, but London’s FTSE 100 only closed a little higher.

The dollar has dipped against a basket of rival currencies, with Deutsche Bank warning that we could be facing a ‘structural dollar downtrend’.

Back in the City, the UK’s blue-chip share index has ended the day pretty much where it started.

The FTSE 100 index has closed 4 points higher at 8407 points, up 0.05% today.

Although a small gain, that’s the Footsie’s 9th daily rise in a row, as it claws back its losses after the trade war blew up.

Bank of England governor Andrew Bailey has said he is focused on the shock to economic growth that is likely to be caused by US president Donald Trump’s import tariffs, and retaliatory measures taken by other countries.

Bailey has been speaking to CNBC on the sidelines of the IMF’s Spring Meeting in Washington, where he said:

“We are certainly quite focused on the growth shock”

Bailey explained that the BoE’s focus had been on balancing weak growth against domestic supply constraints that put upward pressure on inflation, adding:

“We’ve got to balance those two. But I think the trade issue is the new part of that story.”

He said weak surveys of businesses published earlier this week reflected uncertainty among companies although recent official gross domestic product data had been quite encouraging and he did not think the UK economy was close to a recession.

Wall Street is pushing higher.

After its early dip, the Dow Jones industrial average is now up 0.5%.

The S&P 500 share index is now up 1.2%, while the tech-focused Nasdaq is 1.7% higher.

Fox Business’s Charles Gasparino is reporting that people inside the Trump White House are alerting Wall Street executives they are nearing an agreement in principle on trade with India.

The proposed deal could include “agreed upon goals” and a deadline for the fully-baked trade pact, according to Gasparino’s sources, and could be used as a template for a deal with Japan, South Korea and Australia.

We should be cautious about leaping on encouraging trade rumours from the White House, of course. But also, why are Wall Street big hitters getting early tipoffs?!

Germany’s government has given up hopes of growing its economy this year.

Germany’s economy is expected to post zero growth in 2025, outgoing Economy Minister Robert Habeck said today, as he laid the blame for this stagnation on Donald Trump’s trade policy.

Habeck declared:

“The US trade policy of threatening and imposing tariffs has a direct impact on the German economy, which is very export-oriented.”

The German government had previously expected growth of 0.3% this year.

Its new forecast, of 0% growth, matches the IMF’s new forecast, released on Tuesday.

Consumer goods maker Procter & Gamble has cut its sales and profit forecast today, blaming a pullback in consumer behavior as uncertainty over tariffs and the economy hits confidence.

P&G now expects flat sales for its current fiscal year after previously projecting growth of as much as four percent.

The company also warned that it could be forced to raise prices – passing on the impact of tariffs on imports to its customers.

CFO Andre Schulten told reporters on a call:

“We will have to pull every lever we have in our arsenal to mitigate the impact of tariffs within our cost structure and P&L [profit and loss statement].”

The Bank of England can learn lessons from the Covid-19 crisis about how to communicate issues around uncertainty, according to one of its top policymakers today.

BoE deputy governor Claire Lombardelli argues that one of the biggest challenges facing the central bank – and the wider economics profession – is how to talk about economic uncertainty, and communicate with economic decision makers at businesses, households, and across the economy.

Speaking at an event organised by the Peterson Institute for International Economics in Washington today, Lombardelli says the Bank is learning a lot of lessons, both from the economics profession and the academic literature, but also from a number of other disciplines.

Lombardelli says:

So we learnt a lot, for example, during Covid about communication and communication of uncertainty from health professionals and scientists.

So I think there’s a real opportunity here for us to take those rigorous tools of economics and use them in a policy-making context that recognizes the uncertainty that we’re all trying to navigate through and helps economic agents navigate that uncertainty too.

It’s a muted start to trading on Wall Street today.

The Dow Jones industrial average has dropped by 0.4%, down 168 points to 39,437 points. It’s being dragged down by IBM, whose shares are down 8.5% after missing expectations with its latest financial results.

But the broader S&P 500 index is up 0.24% at 5,388 points, up 12 points.

Happily, trade war tensions have not led to a big increase in layoffs at US companies.

The number of new claims for unemployment support rose by 6,000 last week to 222,000, new data shows, still a relatively low level.

Q: What has been the mood of IMF members at this week’s Spring meeting?

They are “anxious”, Kristalina Georgieva replies soberly, explaining:

The membership is anxious because we were just about to step on the road to more stability after multiple shocks.

Actually, she adds, the Fund had been worried that its forecast of 3.3% global growth this year was not high enough – before the Trump trade war forced it to cut that forecast eralier this week.

Georgieva adds that IMF members are also recognizing the importance of “a rule based global economy” in which both government and the private sector can plan with some certainty.

Turning to Argentina, Kristalina Georgieva says that the country has demonstrated that “this time it is different”, with a “decisiveness” to put the economy on a sound track.

She cites falls in inflation, and a drop in poverty levels from over 50% to around 27% now.

Georgieva says:

It [poverty] is still very high, but going down.

The state is stepping out from where it doesn’t belong, to allow more dynamism in the private sector.

That’s quite an endorsement of Javier Milei’s harsh austerity measures, in which public spending was slashed in a “chainsaw” campaign of fiscal balance and deregulation.

Asked about the outlook for Africa, Kristalina Georgieva says the continent has “so much to offer the world”.

She explains:

Obviously, they have the leaders, the natural resources, a young population.

I think a more unified, more collaborative continent can go a long, long way to be an economic powerhouse.

IMF chief Georgieva is then quizzed on why the Fund doesn’t believe the US will fall into a recession this year.

Grabbing a bottle of Perrier, she fills her glass more than half-way up – to illustrate that the Fund sees a less than 40% risk of recession in America this year.

She explains:

My glass, when you look at it, it is more than 60% full. Well, that’s this is where we are. This is what it is. How can I call it empty? I can’t.

When we look at the data, what we see is that for the United States, recession risks have increased now to 37%.

We don’t see either in the labor market or indicators for the functions of the economy such a dramatic loss of economic activity that will push growth in United States all the way to below zero.

Kristalina Georgieva also touches on yesterday’s stinging attack on the IMF by US Treasury secretary Scott Bessant.

She says the Fund “greatly value” the voice of the US, who are its largest shareholder.

During his speech yesterday, Bessent accused the IMF and World Bank of “mission creep”, and called on them to stop their “sprawling and unfocused agendas” on issues such as climate change and gender.

Georgieva seems keen to sooth the US, saying she very much appreciated that Bessent reiterated the US’s commitment to the fund and to its role, saying:

He raised a number of important issues and priorities for the institution that I look forward to discussing with us, authorities and the membership as a whole.

Central bank independence is “critical” for their credibility, Kristalina Georgieva adds.

She says central banks must strike a balance between supporting growth and containing inflation. To do so, they must not only adjust policy interest rates, but also rely on their credibility to anchor expectations, she points out.