IMF chief economist Pierre-Olivier Gourinchas warned that escalating tit-for-tat trade warfare threatens the global economy, calling protectionist maneuvers self-defeating. The departing official delivered his parting assessment as the Fund prepares for a leadership transition amid rising geopolitical friction.

Gourinchas, who steps down after serving as the IMF's top economist since 2022, argued that countries pursuing marginal tariff advantages trigger retaliatory cycles that shrink output for all participants. His critique targets the tit-for-tat dynamic now dominating U.S.-China and EU trade relations.

The warning carries weight because the IMF's research department has consistently modeled trade fragmentation as a drag on medium-term growth. With the World Trade Organization reporting a surge in restrictive measures since 2022, the Fund's outgoing economist frames the current trajectory as a policy choice, not an inevitability.

Markets have largely priced in higher tariff regimes, but Gourinchas suggests the cumulative hit to investment confidence remains underappreciated. His successor inherits a forecasting environment where trade policy, not monetary cycles, drives the largest forecast errors.