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'Tariff shock itself is smaller than initially feared' - IMF on Trump, warns AI boom could go bust

'Tariff shock itself is smaller than initially feared' - IMF on Trump, warns AI boom could go bust

"The International Monetary Fund announced at the World Economic Outlook in Boston on Tuesday that the impacts of President Donald Trump's tariffs 'are smaller than initially feared,' but warned that renewed US-China trade tensions could cause a decline in global output. "In April, the US shook global trade norms by announcing sweeping tariffs. [...] Six months on, where are we? The good news is that the growth downgrade is at the modest end of the range, with growth projected at 3.2 percent this year and 3.1 percent next year, while inflation has increased modestly and is proving more persistent," said the IMF's Economic Councellor and Director of Research, Pierre-Oliver Gourinchas. "What explains this modest impact? First and foremost, the tariff shock itself is smaller than initially feared, with many trade deals and exemptions. Most countries also refrained from retaliation, keeping the trading system open, and the private sector proved agile, front-loading imports and rerouting supply chains," he continued. Gourinchas added that the smaller-than-expected impact of tariffs reflects not only trade adjustments but also loose financial conditions, in part due to a weaker US dollar. "The outlook remains fragile and very sensitive to news on the trade front," he noted. "Flaring up trade tensions with the potential for supply chain disruptions could quickly lower global output by as much as 0.3 percentage points." The IMF now forecasts global GDP growth of 3.2 percent in 2025, slightly above its July projection of three percent, with growth expected at 3.1 percent in 2026. Asked whether AI is a bubble about to burst, Gourinchas said it is too early to tell, stating: "I don't think anyone can know for sure, [...] but part of our job is to look out for potential risks, and [this is] certainly one of the risks." Gourinchas then warned that a renewed flare-up in US-China tensions could disrupt supply chains and lower global output by as much as 0.3 percent, highlighting that new trade restrictions, particularly limits on exports of critical materials, could worsen conditions. "The uncertainty about trade policy in the future is something that is already reducing economic activity," Gourinchas commented. "The place where we see that is when we look at investment. I mentioned in my remarks that we have a boom in the tech sector. [...] But if you leave that aside and you look at investment outside of the tech sector, it's actually declining compared to last year." This comes after President Trump on Friday threatened to impose an additional 100 percent tariff on Chinese goods, on top of the existing average rate of 55 percent set to take effect November 1."

Elon Musk enthusiastically shared a post claiming “these days ‘far-right’ simply means normal” – and it was a self-own visible from SpaceX

Elon Musk enthusiastically shared a post claiming “these days ‘far-right’ simply means normal” – and it was a self-own visible from SpaceX

Elon Musk has been ramping up his divisive rhetoric yet again, with his feed becoming increasingly far-right. But, he professes, this label of ‘far-right’ is completely wrong. ‘Far-right’, these days, is just another way of saying ‘normal’. Apparently. He reposted a tweet from Kobie Thatcher, an Australian self-confessed MAGA fan, with an enthusiastic ‘Yup’ of […] The post Elon Musk enthusiastically shared a post claiming “these days ‘far-right’ simply means normal” – and it was a self-own visible from SpaceX appeared first on The Poke .