IMF Warns Trump’s Tariffs Pose ‘Significant Risk’ as Markets Plummet

The International Monetary Fund (IMF) has raised alarm over the potential economic fallout from U.S. President Donald Trump’s aggressive tariff policies, warning that they pose a "significant risk" to the already fragile global economy.

Kristalina Georgieva, Managing Director of the IMF, urged the United States and its trading partners to avoid further escalation in trade tensions as markets across the world continued to experience heavy losses.

“We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth,” Georgieva said. “It is important to avoid steps that could further harm the world economy. We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty.”

Markets in Freefall as Investors React to Tariffs

Trump’s sweeping tariff measures—dubbed "Liberation Day" policies—have introduced steep border taxes ranging from 10% to 50% on imports from nearly every country. The move has triggered a global stock market rout, with over $2.5 trillion wiped off Wall Street on Thursday alone.

The sell-off extended into Friday, hitting financial markets across Asia, Europe, and Australia. Japan’s Nikkei 225 index dropped nearly 3%, closing the week down 9%, while South Korea’s Kospi slid 1.3%. In Australia, the S&P/ASX 200 fell 2.2% amid fears of a global recession.

European markets also took a hit, with London’s FTSE 100 tumbling 1.17% to its lowest level since January. France’s CAC 40 and Germany’s DAX also suffered losses, declining 0.68% and 0.71%, respectively.

Oil Prices Sink as Recession Fears Mount

Energy markets were also rattled, with Brent crude prices falling 3.8% to $67.48 per barrel—the lowest since December 2021. Investors are now bracing for a slowdown in global trade, which could weaken demand for oil and further pressure energy markets.

U.S. Futures Signal Further Losses

As trading prepares to resume in the U.S., futures indicate continued declines. The S&P 500 and Dow Jones Industrial Average are both expected to open 0.7% lower, while the tech-heavy Nasdaq is projected to drop by 0.5%.

Indian Pharma Stocks Plunge on Trade Uncertainty

Indian pharmaceutical stocks, which had initially benefited from news that they would be exempt from Trump’s tariffs, slumped on Friday after he confirmed that levies on drugmakers were still under consideration. The NSE Nifty Pharma index fell more than 6% as investor confidence wavered.

With markets in turmoil and global economic uncertainty growing, investors and policymakers alike are closely watching whether the U.S. will adjust its hardline trade stance or whether further economic disruption lies ahead.