The IMF boss is right to say buckle up' the global economy is facing multiple menaces

"In her curtain-raiser speech for the gathering, Georgieva rightly pointed out the global economy has proved more resilient than some feared at the time of the spring meetings in April, when the world's policymakers were transfixed by the chaos emanating from the White House. Part of the reason for that has been front loading: Trump's intention to jack up tariffs was no secret, and many companies ran up inventories in advance and started to rejig their supply chains."

"Another explanation is that the US's trading partners have in general preferred to use a combination of flattery and capitulation in the face of Trump's approach, rather than causing an all-out trade war. Meanwhile, firms and governments have increasingly been forging new trade connections that bypass the US, creating what Adam Posen, director of the Washington-based Peterson Institute for International Economics, has called a new economic geography."

"There was evidence of this in the latest update from the UN's trade and development arm, Unctad, last week. Trade growth remained positive in the first half of 2025, despite rising trade policy uncertainty, persistent geopolitical tensions, and a challenging global economic environment, Unctad reported. Far from grinding to a halt, global trade expanded by more than $500bn (375bn) in the first half of the year, and was expected to continue growing in the third quarter with much of the momentum coming from developing countries."

IMF chief Kristalina Georgieva warned that uncertainty is the new normal while US President Donald Trump threatened 100% punitive tariffs on Chinese goods after Beijing blocked rare-earth exports, triggering market falls. Companies front-loaded inventories and rerouted supply chains anticipating tariffs, while many US trading partners opted for flattery and capitulation rather than escalation. Firms and governments forged alternative trade links bypassing the US, creating a shifting economic geography. UNCTAD reported trade growth remained positive in H1 2025, with global trade expanding by over $500bn and much of the momentum coming from developing countries.

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