Rising import tariffs and other steps taken by the Trump administration are "undermining the global trading system," increasing restrictions on trade in goods and services, and catalyzing a cycle of retaliatory trade responses, the International Monetary Fund (IMF) said on Thursday.

"Tariff measures are likely to be ineffective at containing bilateral trade deficits and will be damaging to the US and to global macroeconomic outturns," the IMF said in a statement after concluding its annual Article IV consultation to review the US economy.

"Rather than expanding tariff and non-tariff barriers, the US and its trading partners should work constructively to better address distortions in the trading system," the IMF said, adding that it's "especially important" that the US-China trade tensions are "quickly resolved" through a comprehensive agreement that strengthens the international system.

"The US would gain by working with international partners to strengthen the rules-based, multilateral trading system," said the Washington-based international lender.