The International Monetary Fund has criticized the economic strategy of the current administration of U.S. President Donald Trump, particularly focusing on the negative consequences of implementing new tariffs and large-scale cuts in the federal sector.
This is reported by Finway
IMF Recommends Changing the U.S. Economic Approach
In its statement, the IMF emphasized that the United States should consider using other economic policy tools to avoid the negative impact of tariffs on the country’s economy. These recommendations came after a series of meetings held as part of the Fund’s regular review of the U.S. economic situation.
IMF Managing Director Kristalina Georgieva noted that she understands the Trump administration’s concerns about the size of the trade deficit, but stressed the harmful effects of tariffs on economic growth. According to her, tariffs negatively affect supply and hinder further economic development.
Federal Sector Cuts and Institutional Weakening
Fund representatives also pointed out the significant reduction in jobs within federal structures. According to Nigel Chalk, director of the IMF’s Western Hemisphere Department, the number of federal employees has decreased by 15% over the past year. He expressed concern that such actions could negatively impact the performance of key government functions, including regulatory oversight and the work of statistical agencies.
“We are witnessing a significant reduction in federal employment – 15% of federal personnel has been lost over the past year. We want to ensure that this does not affect the performance of key functions, such as regulatory oversight or the work of statistical agencies,” said Nigel Chalk, director of the IMF’s Western Hemisphere Department.
He also added that tax administration and official statistics often receive inadequate funding, even though these areas are important public goods that should be invested in.
According to reports, after Donald Trump returned to the White House, several high-ranking officials from the Internal Revenue Service (IRS) were dismissed. Additionally, the president removed Labor Statistics Bureau Commissioner Erica McEntarfer from her position following unfounded allegations of political manipulation of employment data.
Kristalina Georgieva emphasized that strong government institutions are fundamental to making effective policy decisions, especially when it comes to an objective understanding of internal processes in the country.