WASHINGTON, April 1, (V7N) – US President Donald Trump’s escalating trade war rhetoric has unsettled global markets, but the overall economic impact is not expected to be dramatic, according to International Monetary Fund (IMF) Managing Director Kristalina Georgieva.

Since returning to the White House in January, Trump has imposed a series of tariffs on major trading partners and is set to introduce additional levies on Wednesday, a day he has labeled "Liberation Day."

Trump’s tariff threats have already triggered market declines and a dip in US consumer confidence. However, key economic indicators, such as unemployment and inflation data, have yet to show signs of significant distress.

"There is a lot of anxiety around developments," Georgieva said during a Reuters-hosted virtual event on Monday. However, she added that "we are not seeing dramatic impact" from the tariffs at this stage.

Despite concerns, Georgieva noted that the uncertainty surrounding trade policies has pushed countries to strengthen their economic resilience. She pointed to Europe’s recent increase in defense investment as an example of governments adapting to shifting global economic conditions.

The IMF may slightly downgrade its global growth forecast from 3.3%, but it does not currently predict a global recession.

The IMF’s research has shown that prolonged uncertainty in trade relations can hurt economic growth by delaying investment and business expansion. Georgieva stressed the need for a clearer roadmap, stating, "The sooner there is more clarity, the better."

With Trump’s "Liberation Day" announcement approaching, businesses and governments worldwide remain on edge, awaiting details on potential new tariffs. While the IMF does not foresee immediate economic turmoil, the long-term effects of ongoing trade uncertainty could weigh on global growth.

END/BUS/RH/