Speaking at the 2025 World Bank Group/IMF Spring Meetings, IMF Managing Director Kristalina Georgieva outlined the far-reaching consequences of these developments, particularly the inflationary impact on product prices in affected economies.

“The complexity of modern supply chains means imported inputs are embedded in a wide range of domestic products. The cost of a single item can be influenced by tariffs in dozens of countries,” Georgieva explained.

“In a world of bilateral tariff rates—each potentially shifting up or down—business planning becomes extremely difficult. We’re seeing ships at sea unsure of which port to dock at. Investment and consumer decisions are being delayed.”

She further warned that prolonged uncertainty is not only destabilizing global trade but also affecting financial markets and consumer behavior.

“Rising trade barriers impact growth immediately. Tariffs, much like taxes, may raise revenue, but they do so at the expense of reducing and redirecting economic activity,” she stated. “Past experience shows that the burden of higher tariffs isn’t borne solely by trading partners. Importers often absorb part of the cost through lower profits, and consumers ultimately pay more for goods.”

The IMF’s remarks add to mounting concern over the long-term implications of protectionist policies, with fears that continued escalation could erode global economic stability and stall recovery efforts in developing economies.