The International Monetary Fund (IMF) First Deputy Managing Director Gita Gopinath warned that the US fiscal deficit is too large and that the country needs to address its "ever-increasing" debt burden.
In an interview with the Financial Times, Gopinath added that the US remains impacted by "very high" uncertainty in trade policy, despite positive developments such as the Trump administration's rollback of tariffs on China and the conclusion of an economic agreement between the US and the UK.
"It's very positive that the average tariff rates are lower than we assumed in April, but there's a very high level of uncertainty, and we have to see what the new rates will be," Gopinath told FT.
These comments came as Trump proposes extending the tax cuts passed during his first term in 2017 and adding new tax breaks.
In April, the IMF lowered its growth forecast for the United States, along with most other countries, due to the impact of US tariffs, while warning that further trade tensions would further slow growth.
Moody's also downgraded the United States' sovereign credit rating last week due to concerns about the country's growing debt pile, which stands at $36 trillion.
The credit rating agency noted the failure of successive US administrations and Congress to reach an agreement on measures to halt the upward trend in large annual fiscal deficits and rising interest costs.
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