In a startling development ahead of this year’s IMF and World Bank annual meetings, former U.S. President Donald Trump has threatened to impose 100% tariffs on Chinese imports in retaliation for China’s recent export controls on rare earths — a move that could reignite full-scale trade war tensions. Reuters

The timing is especially sensitive: these multilateral meetings are typically venues for delicate diplomatic and economic coordination. Analysts warn that Trump’s rhetoric risks overshadowing agenda items intended to stabilize global markets, push development agendas, and address systemic financial vulnerabilities. Reuters

Markets responded with volatility: equities plunged initially as uncertainty flared, then partially rebounded when U.S. Treasury Secretary Scott Bessent attempted to calm nerves, emphasizing that dialogue remains open and a Trump-Xi meeting is under consideration. Reuters

Inside the meetings, tensions are expected around the U.S. push to refocus multilateral institutions away from climate and gender initiatives and toward financial stability. The U.S. also faces scrutiny over its backing for Argentina, raising concerns of politicization of IMF/World Bank lending. Reuters

Why this matters globally:

• If tariff threats materialize, global trade could contract sharply, aggravating a fragile post-pandemic recovery.
• The drift in priorities at multilateral institutions could shift resources away from climate, equality, and social programs.
• Smaller economies risk being squeezed between U.S. pressure and China’s retaliatory economic policy, reducing space for independent development strategies.