(Bloomberg) — The world’s finance chiefs flocked to Washington this week to see up close how President Donald Trump’s effort to overhaul the global economic order is shaking markets and eroding growth. Most Read from Bloomberg As they gathered in private meetings and opined on panels about how his tariffs upend free-trade orthodoxy, markets were whiplashed by signals the US may agree to cut its massive levies on China, which even Treasury Secretary Scott Bessent said amount to a trade embargo between the world’s biggest economies. The officials were among those who descended on the US capital from almost 200 countries, ostensibly for the spring meetings of the International Monetary Fund and World Bank.
They typically gather to address the the top challenges to the global economy — and Washington was at the top of that list this week. Reassurances from the White House that the broad outlines of several new trade deals were around the corner contrasted with delegations still trying to figure out what Trump’s team wants and what they can offer. With the global economy headed for a slowdown and no resolution in sight for the man-made trade chaos, some participants felt relieved the situation didn’t worsen this week but felt far from secure about what’s next.
“The worry I hear more often is actually not even tariffs, it is uncertainty,” IMF Managing Director Kristalina Georgieva told reporters Thursday. “Let’s have clarity.” This weeks’s buzzword “uncertainty” even crept into corporate boardrooms, with firms pointing to the dangers in earnings calls, and on trading floors across the globe amid the pace of Trump’s policy shifts. “Reacting to all these headlines is, frankly, a bit of a nightmare for strategists and investors alike,” said Michael Brown, senior research strategist at Pepperstone in London.
“It speaks to the general degree of incoherence, uncertainty, and volatility with which the White House continue to make policy.” The week began with the IMF downgrading its growth forecasts to the weakest since the pandemic, and warning that conditions may get even worse. Markets then rallied after Trump said he’d be willing to “substantially” pare back his 145% tariffs on China and insisted he had no intention to fire Federal Reserve Chairman Jerome Powell, easing concerns that the independence of the world’s most important central bank was at risk.
