In Washington, the mood at World Bank and International Monetary Fund gatherings was a mix of relief that US President Donald Trump’s tariffs hadn’t caused a deeper slowdown and dread about the risks ahead.
Policymakers left town hoping that Trump and Chinese President Xi Jinping will meet at the end of the month, resigned to the reality that the outlook for the global economy is at stake.
The meeting coincided with some of the harshest rhetoric between Washington and Beijing in Trump’s second term, as both sides flexed their dominance with export controls in key industries – the US with advanced technology and China with its rare earths reserves.
While the anxiety mostly played out behind the scenes, with few officials willing to publicly opine on the power play, IMF’s MD urged policymakers not to panic. Kristalina Georgieva suggested the lack of retaliation against US tariffs was helping to keep subpar global growth from collapsing. “Our message to everybody is: Be calm,” she said in an interview Thursday.
“And to China: Be careful, do not provoke other countries to see you as a threat to their economies.” US Treasury Secretary Scott Bessent and China Vice Premier He Lifeng are expected to meet next week to negotiate down recent escalatory measures — after Bessent upbraided a Chinese negotiator during a press conference earlier in the week, describing him as “unhinged” and perhaps having “gone rogue.