The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, expressed concern on Tuesday, questioned on the CNBC channel, about the consequences of an increase in customs duties in the United States, which according to her would lead to an increase in prices in the detriment to American consumers.
For Ms. Georgieva, an increase in customs duties, which is one of the economic measures recommended by Republican candidate Donald Trump to finance the tax cuts he is also considering, “would push prices up while we are still trying to reduce inflation”. Among the consequences of an increase in prices, “there is a 75% probability (that a targeted country) will apply it in turn”insisted the head of the IMF. “The risk is that prices will rise in the United States and hit consumers, particularly the poorest families, but also that American companies will be the target of retaliatory measures”added Kristalina Georgieva.
The former US president, who is opposed to Democratic Vice-President Kamala Harris, wants to increase all customs duties by “more than 10%” if he returns to the White House to finance a “large tax cut for the middle class, the upper class, the lower class, the business class”. It also plans to go well beyond for a certain number of products or for certain countries, first targeting China, with which the United States still has a very negative trade balance.
Inflation control as a priority
The United States is emerging from a period of high inflation, like the rest of the world, a consequence of the period following the Covid-19 epidemic and the restart of the global economy, inflation which reached up to 9.5% at an annual rate, its highest level since the early 1980s. The Federal Reserve (Fed) lowered its rates for the first time during its last meeting in mid-September, estimating that the rise in prices returned to its target of 2% increase per year.
THE IMF, for its part, has repeatedly repeated that the priority is to control inflation, due to its impact on purchasing power and the risk of a slowdown in the economy that it entails. According to Ms. Georgieva, the United States seems well on its way to “a soft landing” more “We must remain vigilant because we are in a hectic world. We believe that inflation has been defeated and that central banks have been successful but we must remain attentive..
