By Rosemarie Zamora
The world economy was thrown into deep chaos in April this year as US President Donald Trump imposed a “baseline tariff” of 10 percent on all US imports, with higher tariffs on imports from 57 specific countries, including China, Japan, and the European Union.
People are directly impacted by fluctuations in stock market prices, and tariff announcements induced volatility in international markets.
According to market analysts, Trump’s tariff war may cause disruptions to international trade, a possible global recession, and excessive inflation and production instability.
The economic impact of trade tariffs
Since Trump’s announcement, the International Monetary Fund (IMF) has slashed its growth forecasts in most countries due to uncertainty brought about by the trade tariffs.
The IMF earlier downgraded its growth forecast for the US to 1.8 percent this year, down from its estimate of 2.7 percent in January.
According to the Fund, the sharp increase in tariffs and uncertainty could lead to a “significant slowdown in global growth”.
It also cut its forecast for global growth by 0.5 percentage point to 2.8 percent this year, while its forecast for global trade was downgraded to 1.7 percent.
In Europe, the IMF forecasts that the economy will slow down to 0.8 percent this year and 1.2 percent in 2026.
It also cut its growth forecast for Germany by 0.3 percentage point to 0.0 percent in 2025, and to 0.9 percent in 2026.
Meanwhile, growth in Britain was forecast to slow down to 1.1 percent this year, 0.5 percent percentage point below the January forecast.
In Asia, China’s growth forecast was cut to four percent in 2025 and 2026, while Japan’s economic forecast is expected to slow down to 0.6 percent.
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Various countries’ reactions
With a great impact on the world’s economy, most countries have reached out to the US and to Trump to negotiate the tariffs, while some countries imposed retaliatory tariffs.
Trump’s top economic adviser, Treasury Secretary Scott Bessent, said 70 countries had called to negotiate trade deals.
One of the countries that is seeking to negotiate deals with the US is Japan.
It wants to negotiate down the 24 percent tariff the US has imposed on Japanese imports.
Vietnam has also tried to negotiate deals with Washington.
Bloomberg earlier reported that a top Vietnamese official had headed to Washington for negotiations.
Trump has held talks with South Korean Acting President and Prime Minister Han Duck-soo and shared that he was negotiating lower tariffs with the country.
The US levied a 25 percent tariff on South Korean goods.
While other countries have tried to negotiate with the US, others retaliated and imposed tariffs on US goods.
China had earlier planned a 34 percent retaliatory tariff ahead of the implementation of the US tariff then Trump’s fresh duties on many imports from China came up to 145 percent.
Beijing hit back with duties of 125 percent on US goods.
The European Union also voted to implement retaliatory tariffs on US goods.
In the latest development, on May 12, the US and China announced that they had reached an agreement to slash the tariffs they imposed on each other for 90 days.
Under the agreement, the US will lower its tariffs on Chinese goods to 30 percent, while China will reduce its own to 10 percent.
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Simon Wilkes 
Ciara Mina