World Bank Group President Ajay Banga has a message for everyone: lowering tariffs can benefit us all. Speaking at the 2025 Spring Meetings of the World Bank Group and the International Monetary Fund (IMF) on Tuesday, Banga highlighted how reducing trade barriers can boost global trade and help economies grow.
“Lower tariffs are good for everybody,” he said. Tariffs are taxes on imported goods, and when they’re high, it can make products more expensive and limit trade between countries. By lowering these taxes, countries can trade more freely, which can lead to more jobs and economic opportunities.
Banga pointed out that in the past decade, there’s been a surge in regional and bilateral trade agreements. Deals like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) are changing the way countries collaborate on trade. “These are all deals involving groups of nations in the last decade, and it has changed the way trade is working in those countries,” he explained.
He also mentioned that trade among developing economies is growing rapidly. “Nearly half of exports from these countries now go to other emerging markets,” Banga said. This means countries in the Global South are increasingly trading with each other, creating new opportunities for growth.
Banga emphasized the importance of making trade easier by improving border processes, reducing costs, and having clear rules for how products are made and sold. “These can boost trade volumes and support more stable and diversified growth,” he added.
However, many developing countries still have higher tariffs compared to advanced economies. This can lead to “reciprocal tariffs,” where other countries raise their tariffs in response, making it harder for everyone to trade. “A broad-based liberalization, not just with favorite partners, can help offset these risks and actually expand market access,” Banga advised.
He reminded everyone that historically, countries with open economies tend to grow faster and handle economic shocks better. Banga urged nations to talk and work together on trade issues to build a stronger global economy.
