WASHINGTON — US President Donald Trump’s push for sweeping tariffs is creating great uncertainty and denting confidence but is not likely to trigger a near-term recession, International Monetary Fund (IMF)Managing Director Kristalina Georgieva said on Monday.

“What we see in the high-frequency indicators is indeed indicating that consumer confidence, investor confidence are weakening somewhat, and we know that that then translates into an impact on growth prospects,” Ms. Georgieva said in a Reuters NEXT Newsmaker interview.

“We are not seeing a dramatic impact” yet from the tariffs implemented and threatened so far by Trump since his return to the White House, she said. The IMF will likely lower the economic outlook slightly in its next World Economic Outlook update in about three weeks, but “we don’t see recession on the horizon.”

The IMF in January nudged up its global economic growth estimate for 2025 to 3.3% from 3.2% in its previous estimate in October, with a half percentage-point upgrade to the US outlook to 2.7% accounting for most of that uptick.

Now, though, Ms. Georgieva expects the WEO update due in April when the IMF holds its spring meetings in Washington to reflect a small downward “correction” to those estimates, she said.

Since returning to the White House in January, Mr. Trump has imposed 20% tariffs on all goods from China; threatened and then delayed 25% tariffs on most goods from Canada and Mexico; launched steep levies on steel and aluminum imports; announced 25% tariffs on imported automobiles; and has declared that April 2 will be “Liberation Day,” when he plans to unveil global reciprocal tariffs.

The unpredictable pace of the announcements and implementation of the levies has soured investors’ attitudes, and major US stock indexes have been down by nearly 10% since mid-February on concern the tariffs will slow growth or even trigger a recession.

The longer the uncertainty persists about Mr. Trump’s approach to tariff policy, the greater the risk to the outlook, Ms. Georgieva said.

“The sooner there is more clarity, the better, because uncertainty, our research shows, the longer it goes, the more it may negatively impact growth,” she said.

BESSENT MEETING
Asked about her understanding of how committed the US remains to the IMF in the wake of Mr. Trump’s recent pullback from other multilateral organizations like the World Health Organization, Ms. Georgieva said she had a “very constructive” initial meeting with US Treasury Secretary Scott Bessent, saying that he understands the need for the IMF as the global lender of last resort.

“Secretary Bessent has a good appreciation for why it is in the interests of the US economy that the Fund exists. We are the only institution that has the capacity to rescue countries when they are in trouble,” she said.

Ms. Georgieva also said that the US has earned some $3.2 billion on its IMF resources over the past two years, with the holdings acting “like a savings account.”

Ms. Georgieva said the IMF, in turn, values the US because it is the world’s largest economy and is by far the largest IMF shareholder, at 17.4%. “And the United States is our home. This is where we live. This is where the kids of my staff go to school,” she said. — Reuters

TOKYO — In Japan, policymakers and economists are paying close attention to the “oshikatsu” phenomenon as a growing driver of consumer spending — and 24-year-old Momoka Matsui is one of many doing her part to shore up the economy.

Ms. Matsui is part of an expanding demographic of mostly 20- and 30-somethings engaged in activities supporting one’s favorite celebrities, anime characters, cuddly mascots or any “oshi” — the Japanese term for the object of one’s adulation.

“If my salary goes up, I’d like to go to concerts out of town, even overseas, more frequently,” said Ms. Matsui as she, like many workers in Japan, waits eagerly for another year of bumper wage hikes.

Ms. Matsui, who does oshikatsu-related marketing and research as part of her overall work at advertising giant Hakuhodo, declined to identify her bands of choice due to conflict-of-interest concerns in her job.

The explosion of oshikatsu, which entered the mainstream lexicon during the pandemic, as a social phenomenon has economists and even the Bank of Japan taking note for its potential to prop up Japan’s tepid consumption.

That’s especially true now, when many companies are planning their biggest pay rises in 34 years, particularly for younger workers who are in short supply in a tight and ageing job market, Nomura Securities analyst Kohei Okazaki said.

“The 20-somethings, who’ll probably receive another big pay rise in this spring’s wage talks, are more proactive about oshikatsu than other age groups and there’s a high possibility that spending by the age group will continue to grow this year,” he said.

RISING TREND
A joint survey by Tokyo-based marketing firms CDG and Oshicoco in January estimated that some 14 million people could be engaged in oshikatsu today — 11% of Japan’s population. With respondents spending an average 250,000 yen ($1,700) a year, the survey suggested a potential 3.5 trillion yen contribution from oshikatsu to the world’s fourth-largest economy.

While that accounts for only 2.1% of Japan’s total annual retail sales, according to analysts the positive knock-on impact on consumption is expected to be bigger.

“It’s safe to say that consumption expenditure due to oshikatsu is on an increasing trend,” Mr. Okazaki said, adding non-essential spending appeared to be holding its own even as inflation prompts many to pinch pennies elsewhere.

Oshikatsu can take many forms beyond the conventional concert tours. Fans can crowd-fund an advertising space as a birthday gift for their idols, or simply buy the same merchandise used by their oshi.

Among the most popular oshis are VTubers, or entertainers who represent themselves as an avatar online and live-stream concerts and interact with fans.

For Ms. Matsui, it could be as simple as spending an evening occupying the same seat at a Tokyo cafe where a member of her favorite boy band had once visited. On a recent Sunday there, she placed several table-top acrylic stands printed with his images — costing about 8,000 yen combined — next to her cake and tea, and snapped photos.

“Oshikatsu is part of my identity; it’s what makes me who I am,” she said.

That sentiment was shared by Ayari Koga, a 28-year-old office worker, and 21-year-old college student Miki Takeda, who were visiting an oshikatsu goods cafe at a popular shopping district in Harajuku in Tokyo to enjoy their tea with their manga character plushies.

“The plush dolls are cute and they give me comfort,” Takeda said.

‘NO PASSING FAD’
It may provide some comfort for policymakers too, as they look to revitalize consumer spending and support Japan’s economy amid rising external risks including from US tariffs.

In a Bank of Japan state-of-the-economy report in January, one retailer in the northern city of Akita noted that young people were buying multiple sets of oshikatsu-related trading cards costing more than 10,000 yen each.

Corporate Japan is making the most of the phenomenon.

East Japan Railway last month began offering exclusive videos and smartphone wallpapers featuring “Nijisanji” VTubers on certain routes. MUFG Bank will launch a banking app featuring characters from online game “The Idolm@ster.”

Young people getting married and having children later in life, freeing up more time and money, was one reason oshikatsu has grown in prevalence, Oshicoco head Natsuho Tada said.

“Even people in the financial industry and those who had previously felt that they had nothing to do with oshikatsu have started to realize that this is not a passing fad,” she said.

But the activity isn’t limited to the youth: think tank Video Research said in a survey published in March that about 30% of those in their 50s had an oshi.

Junko Arai, a therapist in that age group, said she spends 60,000-70,000 yen to attend concerts of her favorite K-Pop groups such as Stray Kids and NCT.

“We all have to deal with stress from work, childcare, or family issues, but by doing oshikatsu people can overcome that and find the energy to keep going.” — Reuters

MADRID/WASHINGTON — The Trump administration has warned suppliers to US embassies and consulates as well as recipients of US grants worldwide that they must comply with its ban on Diversity, Equity and Inclusion (DEI) programs or risk losing payments.

Suppliers for US diplomatic missions have been told to confirm compliance with the DEI crackdown in a questionnaire entitled “Certification Regarding Compliance With Applicable Federal Anti-Discrimination Law,” according to a copy reviewed by Reuters.

Separately, a letter sent to those firms warned that failing to submit the required information and confirm compliance will result in a payments freeze, a Spanish official said.

The warning reflects US President Donald Trump’s goal to extend outside the US his January executive order directing US government chiefs to dismantle DEI policies for their agencies and contractors and for the private sector to do the same.

This has created a legal standoff in the US after years in which American firms have embraced DEI policies that track race and ethnicity data and set diversity targets in hiring and other corporate practices. 

A Feb. 11 cable sent to all US missions worldwide reviewed by Reuters instructed them to obtain from vendors with current contracts or proposals under review the certification that they are adhering to Mr. Trump’s DEI ban.

They also must certify that they will not spend US funds “for any initiatives or programs that do not comply” with Mr. Trump’s order, according to the cable.

Asked about the issue, US State Department spokesperson Tammy Bruce told reporters on Monday that the notifications were “an effort to comply with the executive order from the president, and it is (an) essentially self-certifying statement to local consulates and embassies.”

Reuters has been unable to establish how many companies have received letters or how much their combined contracts are worth.

But the anti-DEI pressure from Washington has highlighted the extraterritorial reach of US policies and their potential impact on European corporate practices.

Other “America First” policies pursued by Mr. Trump have stoked economic and political tensions between the US and Europe since his Jan. 20 inauguration, at a time when his actions on tariffs and security ties have upended transatlantic relations.

‘FLAGRANT VIOLATION’
The instructions have been sent to a wide range of firms, the Spanish official said, including those supplying the homes of US embassy staff with water, gas and electricity, to newspapers to which embassies subscribe, and catering suppliers.

The Spanish Labor Ministry said the American directive was a “flagrant violation” of Spain’s strict anti-discrimination and diversity laws, and companies seeking to comply would face investigation by the Labor Inspectorate.

American Space Barcelona, based at the Spanish city’s Sant Andreu municipal library, is one Spanish organization to have received the letter as it includes a project that gets US Embassy funds. The project provides English-language resources, cultural programs and educational guidance and information about the United States.

Barcelona Mayor Jaume Collboni told media the letter was part of a “reactionary avalanche” being driven by the Trump administration “against Europe and the democratic values that we defend.”

Major German carmaker BMW has received a letter from the US Embassy in Bulgaria, which has bought BMW vehicles, asking it to address questions about its DEI policy, a person familiar with the matter said.

In a statement to Reuters, BMW said it believes that “diverse perspectives and talents strengthen our company” and “contribute to increasing our innovative strength and competitiveness.”

“Discrimination in any form has no place in our company,” it said. “We will continue our activities on ESG (environmental, social and governance) topics as planned. We do not follow short-term trends in these areas either, but pursue a clear plan of moderation and balance.”

Some French companies with US government contracts have also been ordered to comply with Mr. Trump’s DEI ban.

“American interference in the inclusion policies of French companies, along with threats of unjustified tariffs, is unacceptable,” France’s Ministry of Foreign Trade said in a statement sent to Reuters last week. — Reuters