“There is scope to modernize trade agreements, including Nafta, in a way that is mutually beneficial for all signatories. The U.S. would benefit by remaining open as it pursues new or amended trade agreements,” the report said.
The domestic economy is in both its third-longest expansion since 1850 and one of its slowest growth periods ever. Since the end of the Great Recession, GDP has grown less than 2 percent annually and looks headed for another year around that level.
Trump has proposed a mix of tax cuts and regulatory rollbacks as well as spending on the country’s decaying public buildings, roads, bridges and transportation system.
“We agree that there is a case for a significant increase in public spending on maintenance, repair and new infrastructure projects,” the IMF said.
However, the report issues some caution.
While the IMF backs changes in regulations to the financial system to alleviate the burden for small banks, it says the rest of the post-financial crisis reforms should be left largely intact. As for businesses, though, there is room for improvement in “a simplification and streamlining” of current regulations.
The report also calls for deficit reduction through higher taxes and less spending, though economists generally believe Trump’s current plans would expand the shortfall. The IMF recommended the U.S. raise taxes on consumption, carbon emissions and gas.
A call for immigration reform also appears somewhat at odds with the administration’s goals of tightening borders.
The report also advocates for education reforms as well as child-care support, paid family leave, a higher federal minimum wage and expanding the earned income tax credit program.
Watch: Difference between economic hopes and reality biggest in years.