The U.S. and global economies will likely slow significantly in the wake of President Donald Trump’s tariffs and the uncertainty they have created, the International Monetary Fund said Tuesday.

The IMF said that the global economy will grow just 2.8% this year, down from its forecast in January of 3.3%, according to its latest World Economic Outlook. And in 2026, global growth will be 3%, the fund predicts, also below its previous 3.3% estimate.

And the Fund sees the world’s two largest economies, China and the United States, weakening: U.S. economic growth will come in at just 1.8% this year, down sharply from its previous forecast of 2.7% and a full percentage point below its 2024 expansion. The IMF doesn’t expect a U.S. recession, though it has raised its odds of one this year from 25% to about 40%.

China is now projected to expand 4% this year and next, down roughly half a point from its previous forecasts. “We are entering a new era,” Pierre-Olivier Gourinchas, chief economist at the IMF, said. “This global economic system that has operated for the last eighty years is being reset.”

The forecasts underscore the widespread impact of both the tariffs and the uncertainty they have created. Every country in the world is affected, the IMF said, by hikes in US import taxes that have now lifted average U.S. duties to about 25%, the highest in a century.

The forecasts are largely in line with many private-sector economists’ expectations, though some do fear a recession is increasingly likely. Economists at JPMorgan say the chances of a U.S. recession are now 60%. The Federal Reserve has also forecast that growth will weaken this year, to 1.7%.

The IMF is a 191-nation lending organization that works to promote economic growth and financial stability and to reduce global poverty.

Gourinchas said that the heightened uncertainty around the import taxes led the IMF to take the unusual step of preparing several different scenarios for future growth. Its forecasts were finalized April 4, after the Trump administration announced sweeping tariffs on nearly 60 countries along with nearly-universal 10% duties.

Those duties were paused April 9 for 90 days. Gourinchas said the pause didn’t substantially change the IMF’s forecasts because the U.S. and China have imposed such steep tariffs on each other since then.

The Trump administration has slapped duties on cars, steel, and aluminum, as well as 25% import taxes on most goods from Canada and Mexico. The White House has also imposed 10% tariffs on nearly all imports, and a huge 145% duty on goods from China, though smartphone and computers have been exempted. China has retaliated with 125% duties on US goods.