Chancellor Rachel Reeves’ visit to Washington this week for the half-yearly meetings of the International Monetary Fund (IMF) and the World Bank has been overshadowed by US President Donald Trump’s increasingly volatile behavior. The IMF downgraded its forecasts for UK growth, citing weak economic conditions.
Reeves is tasked with securing a trade deal that would allow British exports to be tariff-free or face minimal tariffs. However, Trump’s protectionist stance poses significant challenges. His administration has imposed a 10% tariff on all countries and a 25% levy on car exports to the US.
The UK wants exemptions from these tariffs, while the US seeks easier access for its food exports, including chlorine-washed chicken. The negotiations will be tricky, but Trump’s unpredictability makes it difficult to forecast his next move. With the IMF warning that the US will take a significant hit from tariffs, and considering the global economic landscape has changed since the fund’s creation in 1944, Reeves faces an uphill battle.
The discussions at the IMF and World Bank meetings highlight the need for deeper debt relief, speeding up climate change mitigation efforts, and reforming the institutions to reflect modern economic realities. However, Trump’s personal attacks on Jerome Powell, the US central bank chief, have sparked concern about Fed independence and market stability.
As Reeves navigates these complex issues, one thing is certain – the negotiations will be influenced by Trump’s erratic behavior, which could have far-reaching consequences for British trade policy and the global economy.
Source: https://www.theguardian.com/commentisfree/2025/apr/23/donald-trump-unstable-bully-economic-orthodoxies