IMF Warns of Trump Tax Bill Impact on US Deficit

The International Monetary Fund (IMF) has raised concerns over President Trump’s tax bill, which is nearing its final vote in the House of Representatives on Thursday (July 3, 2025). The legislation could complicate efforts to reduce the U.S. fiscal deficit and manage growing public debt in the coming years. According to IMF spokesperson Julie Kozack, the U.S. should aim to reduce public borrowing over time to significantly lower the debt-to-GDP ratio, a key measure of debt sustainability. She emphasized that the proposed tax cuts appear to run counter to medium-term federal debt reduction goals. Speaking at a press briefing in Washington, D.C., Kozack stated, ‘The earlier this process of deficit reduction begins, the more gradual the adjustment can be over time.’ While the term ‘medium-term’ can vary, the Washington-based institution often refers to a period of three to five years. The Congressional Budget Office estimates that the Senate-passed bill currently under consideration by the House would add $3.3 trillion to the budget deficit. The IMF is analyzing the details and potential economic impacts of the bill and will provide updated forecasts for the U.S. and global economy in its upcoming World Economic Outlook report later this month.