Ex-IMF exec Gita Gopinath rates Trump's tariffs as 'negative'; says 'no signs' of improving trade balance yet

Former IMF Chief Economist Gita Gopinath has warned that the United States is seeing limited gains from the tariffs imposed by the Trump administration, with the measures largely burdening American companies and consumers.

Writing on X, Gopinath noted that while the so-called "Liberation Day" tariffs have significantly boosted government revenue, the benefits to the broader economy remain elusive.

"Raise revenue for the government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers," she said, highlighting the costs that businesses and households are shouldering.

It is 6 months since "Liberation day" tariffs. What have US tariffs accomplished?
1. Raise revenue for government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers. So it has worked like a tax on US firms/consumers.
2. Raise… pic.twitter.com/KZG3UgKB3S

— Gita Gopinath (@GitaGopinath) October 6, 2025

Gopinath also pointed to the inflationary impact of the duties. "Raise inflation? Yes, by small amounts overall. More substantially for household appliances, furniture, coffee," she added, indicating that everyday consumer products have seen noticeable price increases.

Despite the revenue gains and price effects, the former IMF economist said there is "no sign yet" of improvement in the US trade balance or manufacturing sector, which were key targets of the tariffs. Summing up her view, she described the overall impact as negative, stating that the measures have so far failed to deliver on their broader economic promises.

The tariffs in question include a 25 per cent duty on imports from India imposed in July, followed by a 25 per cent secondary tariff that came into effect on August 27.

On September 26, President Trump further announced plans to impose a 100 per cent tariff on branded and patented pharmaceutical products from October 1 unless companies set up production facilities in the United States.

Amid these developments, India is projected to continue as the world’s fastest-growing major economy. A recent World Bank South Asia Development Update cited strong domestic consumption, improved farm output, and rising rural wages as key drivers of growth.