If sustained, U.S. tariffs imposed on Mexico and Canada will have a significant adverse impact on the those countries, the International Monetary Fund said on Thursday, citing the strong integration of both countries with the U.S. economy.
IMF spokesperson Julie Kozack said the U.S. tariffs on Mexico and Canada and new duties on China, along with responses from China and Canada, and potentially Mexico, amounted to significant new developments. She said the IMF would release a more comprehensive assessment at the spring meetings of the IMF and World Bank in Washington in April.
She cited increased volatility in financial markets reflecting global uncertainty, and it would be critical to assess whether these trends would be short-lived or sustained.
Historically, she said, “sustained periods of elevated uncertainty “can be associated with both households and firms holding back on consumption and investment decisions.”