WASHINGTON — The IMF on Wednesday called on the United States to work with trading partners and find ways to mutually ease trade curbs, as it issued a review of the world's biggest economy.

The International Monetary Fund's findings covered the first year of US President Donald Trump's second term, in which he unleashed wide-ranging tariffs on allies and competitors alike as he sought to shrink the US trade deficit and boost domestic manufacturing.

But his on-again, off-again tariffs have roiled supply chains and financial markets.

During the year, the US administration also sought to lower reliance on unauthorized immigrant workers and reduce the federal government's role in the economy, the IMF noted.

But the fund said on Wednesday that Washington should work constructively with partners "to address concerns over unfair trade practices and agree on a coordinated reduction in trade restrictions and industrial policy distortions that have negative cross-border effects".

"Where trade and investment measures (including tariffs and export controls) are put in place for national security reasons, such policies should be applied narrowly," it urged.

IMF chief Kristalina Georgieva told journalists that the report was prepared before the Supreme Court struck down many of Trump's tariffs last Friday, adding that it would address this development.

Since the ruling, Trump has tapped a different law to impose a new 10 percent global tariff, which he also threatened to increase to 15 percent.

Georgieva met with Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell before the report's release.

She noted that the fund shares the administration's concern about the size of the US trade and current account deficit. She added that the country's current account gap is "too big".

The continuing rise in public debt also "remains a major issue", Georgieva said.

Stability risk

The IMF said, "While the risk of sovereign stress in the US is low, the upward path for the public debt-GDP ratio and increasing levels of short-term debt-GDP represent a growing stability risk to the US and global economy."

Overall, the fund projects a GDP growth of 2.6 percent for the US in 2026, picking up from 2.2 percent last year.

While the economy is "buoyant", the IMF warned that "uncertainty around trade policies could represent a larger-than-expected drag on activity".

It said that the country saw "continued strong productivity growth even though the government shutdown took a bite out of activity in the fourth quarter".

The IMF last issued US-related policy suggestions in 2024.

Washington's unpredictable tariff policies have unsettled key allies, including the United Kingdom and Australia, while fueling greater uncertainty throughout the global trading system.

John Bryson, a professor of enterprise and economic geography at the University of Birmingham, said the change has produced uneven consequences across economies.

"Countries that had been left in an unfavorable tariff position suddenly found themselves in a more favorable position, whilst countries like the UK and Australia found themselves in a less favorable position," Bryson said.

British business groups warn that the impact could be significant. William Bain, head of trade policy at the British Chambers of Commerce, said about 40,000 UK firms exporting goods to the United States may be affected.

For Australia and other trade-dependent economies, analysts say the impact goes beyond headline export numbers. Modern production networks stretch across multiple countries, meaning tariff shifts can ripple through supply chains in complex ways.

Felicity Deane, a professor at Queensland University of Technology, said bilateral trade data alone cannot capture the full effects. Many products sold by UK and Australian firms are manufactured or assembled elsewhere, exposing entire production networks to higher costs.

Agencies - Xinhua