As global finance leaders gather in Washington next week for the annual meetings of the International Monetary Fund (IMF) and the World Bank, they face a significant uncertainty: the outcome of the U.S. presidential election. With Republican nominee Donald Trump and Democratic nominee Kamala Harris vying for the presidency, the policies of the world’s largest economy could drastically shift depending on the victor. This uncertainty weighs heavily on the minds of the finance leaders attending these meetings.
While neither Trump nor Harris has extensively outlined their plans for the IMF and World Bank, their contrasting views on trade, tariffs, and economic policy will be under scrutiny. How these two institutions, which are crucial for global economic stability, will operate under different administrations is a question of immense concern.
IMF Managing Director Kristalina Georgieva alluded to the stakes in a speech she delivered ahead of the meetings, warning about the increasing use of protectionist policies among major economies. Although she did not mention Trump by name, her message was clear: national security concerns are driving countries to resort to industrial policies and trade restrictions, potentially hampering global growth.
“Trade will not be the same engine of growth as before,” Georgieva said, adding that restrictions on trade are “like pouring cold water on an already-lukewarm world economy.”
Trump, if elected, has promised to impose a 60% tariff on all Chinese goods and introduce a “universal” tariff of 10% or 20% on imports from other countries. He argues that these tariffs would shift the cost to foreign producers, but mainstream economists warn that the real burden would fall on American consumers, likely driving up inflation and reducing economic efficiency.
During his first term as president, Trump pursued an isolationist economic agenda, withdrawing the U.S. from the Trans-Pacific Partnership trade deal and replacing the North American Free Trade Agreement (NAFTA) with the United States-Mexico-Canada Agreement (USMCA). Additionally, his administration effectively paralyzed the World Trade Organization (WTO) by blocking new appointments to its appellate body, leaving the global trade institution unable to resolve disputes effectively.
In contrast, Kamala Harris, while having embraced some tariffs during her tenure as vice president, has shown more inclination toward international cooperation than Trump. The Biden-Harris administration has maintained many of the tariffs imposed on China by Trump, but it has also sought to balance protectionist measures with multilateral engagement. For instance, the administration imposed tariffs on Chinese electric vehicles, solar cells, and other products in May 2023, but Harris is expected to take a more collaborative approach on the global stage if she is elected president.
World Bank President Ajay Banga also touched on the potential impact of the U.S. election in a speech previewing the meetings. During a question-and-answer session with reporters, Banga credited Trump for increasing investment in the International Bank for Reconstruction and Development (IBRD), which provides loans to middle-income developing countries. However, Banga remained cautious about predicting how either administration might affect the institution’s future.
“The question will be, how will the nuances of each administration be different?” Banga said. “I don’t know yet, so I’m not going to speculate on how to deal with them.”
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Banga met with Harris in June 2023 when he began his five-year term as World Bank president. Harris praised the World Bank’s evolving mission, including its efforts to address global challenges like climate change, pandemics, and fragility. This suggests that a Harris administration may continue to support a more expansive role for the World Bank, aligning with the Biden-Harris administration’s broader international cooperation agenda.
Georgieva also indirectly addressed the U.S. election’s implications in her speech, noting that “we live in a mistrustful, fragmented world where national security has risen to the top of the list of concerns for many countries.” She warned that rising protectionism, driven by geopolitical tensions, could fracture the global economy. “My argument is that we must not allow this reality to become an excuse to do nothing to prevent a further fracturing of the global economy,” she said.
As finance leaders from around the world prepare to gather in Washington, the U.S. presidential election casts a long shadow over the discussions. Whether Trump or Harris wins the presidency could determine the direction of U.S. economic policy—and by extension, the global economy—over the next four years. For now, the international financial community can only wait and see who will shape the policies of the world’s largest economy and how those policies will impact the IMF and World Bank.
