US tariffs a significant risk to global economy: IMF

Market: Crude oil
04/04/25

US import tariffs pose a "significant risk" to the global economy, according to the IMF.

"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," IMF managing director Kristalina Georgieva said. "It is important to avoid steps that could further harm the world economy."

The comment come after two days of turmoil on global oil and equities markets, sparked by the US imposition of sweeping tariffs on trade. For oil markets, this was compounded by a surprise decision from the Opec+ producer group to speed the unwinding of its output cuts.

Front-month Ice Brent crude futures prices have fallen by more than 8pc since US president Donald Trump released details of the tariffs on 2 April, to trade near a three-year low below $69/bl.

US-based bank Goldman Sachs on 4 April said it has cut its oil demand growth estimate for this year to 600,000 b/d from 900,000 b/d, based on its economists' new view of economic growth. This and the extra production from Opec+ has led the bank, which was bullish on oil prices for a long time, to cut its Brent crude price forecasts for a second time in three weeks, by $5/bl to $66/bl this year.

Goldman also removed a price range from its forecasts, "because price volatility is likely to stay elevated on higher recession risk."

Like Goldman, UK-based bank Barclays said there is downside risk to its $74/bl forecast for Brent this year. It said oil demand is holding up, "but the potential effect of the trade war on demand is hard to ignore."

By Ben Winkley

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