Low growth, high debt and rising wars topped the official agenda of the annual meetings of the International Monetary Fund and the World Bank, but financial leaders spent most of their energy worrying about the potential effects of a debt rollback. Donald Trump give strength US presidential election in November.

Republican candidate Trump’s gains in recent polls have wiped out much of the early advantage of his Democratic rival, the Vice President Kamala HarrisIt was part of nearly every conversation among financial officials, central bankers and civil society groups attending meetings in Washington last week.

Concerns included the potential for Trump to disrupt the global financial system with massive tariff increases, leading to trillions of dollars more in debt issuance and reversing efforts to combat climate change in favor of more fossil fuel energy production.

Bank of Japan Governor Kazuo Ueda said, “Everyone seemed worried about the high uncertainty about who the next president will be and what policies will be pursued under the new president.” he said.

Another central banker, speaking on condition of anonymity, put the concerns more bluntly: “Trump is starting to feel like he’s going to win.”

Trump promised to impose a 10 percent tariff on imports from all countries and a 60 percent tariff on imports from China. These will hit supply chains around the world, possibly triggering retaliation and increasing costs.

There will be only losers in the US-EU trade war, German Finance Minister Christian Lindner told Reuters on Friday.

Trump has also sought to persuade U.S. voters with numerous tax-cut proposals, from extending the full 2017 individual tax cuts to exempting income from tips, overtime pay and Social Security retirement benefits. Budget analysts say this would add at least $7.5 trillion in new U.S. debt over a decade, on top of the $22 trillion in debt growth previously predicted by the Congressional Budget Office by 2034.

Harris’ victory, by contrast, is seen by finance officials as a continuation of President Joe Biden’s reengagement in multilateral cooperation on climate, corporate taxes, debt relief and development bank reforms over the past four years. His plans would also likely increase the debt, but much less than Trump’s.

Biden has rapidly increased taxes on Chinese imports in new industries such as electric vehicles and solar energy, keeping in place Trump’s previous tariffs on steel, aluminum and Chinese goods. Harris endorsed this “targeted” approach and criticized Trump’s broad tariff plans as a $4,000 consumer tax on American families.

MARKETS BET ON TRUMP

Financial markets are seeing the return of “Trump trades” in assets from stocks to Bitcoin to the Mexican Peso that are betting in favor of Trump’s victory as poll numbers rise.

Dollar records biggest monthly gain in two and a half years; The .DXY index measures the dollar up 3.6% against major currencies so far in October. Standard Chartered analyst Steve Englander attributed 60% of the dollar’s rise to Trump’s improving prospects in betting markets.

Brazilian central bank governor Roberto Campos Neto said pro-Trump market bets were already having an inflationary impact on long-term interest rate futures in the dollar-sensitive economy, adding that both Trump and Harris’ fiscal plans contained inflationary elements.

Concerns about Trump’s reversal on trade and spending emerged as US strength offset weakness in China and Europe, with the IMF saying the global fight against inflation had been largely won without major job losses.

IMF Managing Director Kristalina Georgieva called on policymakers to start shrinking the huge debt pile caused by Covid or face a low-growth future that will leave populations increasingly dissatisfied.

Asked how the possibility of Trump’s return affects the meetings and IMF policy recommendations, Georgieva said the talks are focused on resolving current economic problems.

“The feeling of members is that the elections are for the American people,” Georgieva said at a press conference. “Our part is to figure out what the challenges are and how the IMF can solve them constructively.”

EMERGING STRAINS

As financing conditions and inflationary currency pressures ease, the Fed’s strong half-point rate cut should otherwise mark a “Goldilocks” moment for emerging markets growth.

But larger U.S. deficits during Trump’s presidency have already raised some concerns that the party could quickly come to an end.

“A larger deficit means rising debt, growing debt means higher long-term interest rates and that can mean a strong US dollar,” Turkish Finance Minister Mehmet Simsek said at an event on the sidelines of the meeting. he said.

“High long-term interest rates and a strong dollar in the U.S. do not serve emerging markets well,” he said.

Concerns that a tit-for-tat global trade war would stop inflation pressures from easing were widespread.

“If one country imposes tariffs, it is assumed that other countries will not react in this way; but if other countries respond by imposing tariffs around the world, thereby raising prices, the process of fighting inflation could become challenging for the world economy.” Central banks,” said South African central bank governor Lesetja Kganyago.

Saudi Arabian Finance Minister Mohammed Al-Jadaan, chairman of the IMF’s executive committee, emphasized past cooperation with Republican and Democratic U.S. administrations, including Trump’s, and said “we just need to make sure we continue that dialogue.” This was a sentiment echoed by others at the meetings.

“I think we have managed to cope with many things, such as Covid and geopolitical tensions,” Angolan Finance Minister Vera Daves de Sousa said. “Every challenge is an opportunity for us to reorganize ourselves to learn to cope with it.”