The International Monetary Fund warned that global public borrowing will likely surge this year as trade tensions triggered by the US lead to slower economic growth and more volatility on financial markets.

"If sustained, this abrupt increase in tariffs and attendant uncertainty will significantly slow global growth," the IMF wrote.

The U.S. economy will experience sluggish growth in 2025 due to an escalating trade war and "high levels of policy uncertainty," the International Monetary Fund said in a report Tuesday. The projections reinforce economists' warnings about the negative repercussions of President Trump's tariffs on the economy.