The International Monetary Fund has upgraded the outlook for U.S. economic growth in 2019 but downgraded the rest of the world.

President Donald Trump's "America First" economic policies might be working -- partly by bringing the rest of the world down. 

The International Monetary Fund on Tuesday cut its forecast for global growth this year to 3.2%, from an April projection of 3.3%. 

But the organization increased its forecast for U.S. growth by 0.3 percentage point to 2.6%.

That pace would be the fastest among large advanced economies, with Spain the next fastest at 2.3%. The U.K. and France are both on track for 1.3% growth this year, trailed by Japan at 0.9% and Germany at 0.7%, according to the IMF. 

China, which despite being the world's second-largest economy is still considered an emerging market, is expected to see economic growth of 6.2% this year, down 0.1 a percentage point from the IMF's April forecast. Last year, China's economy expanded by an estimated 6.6%, according to the organization.

"Global growth remains subdued," the IMF said on its website after the release of its July World Economic Outlook.

Reasons for the cut in the global growth forecast? 

The IMF cited increasing U.S. tariffs on imports from China -- a reference to Trump's efforts to crack down on unfair trading practices by the country; the president has claimed in tweets that China is "ripping us off."

Another driver of the lower projection was the "prospect of sanctions" imposed by the U.S. that threaten "technology supply chains." Think Trump's ban on U.S. sales to Huawei Technologies, a Chinese telecommunications-equipment and electronics manufacturer, over national-security concerns. 

"Risks to the forecast are mainly to the downside," the IMF said. "They include further trade and technology tensions that dent sentiment and slow investment."  

The new forecasts come as Federal Reserve Chairman Jerome Powell has cited "uncertainties" about the outlook for global growth as a justification for potentially cutting U.S. interest rates at a meeting next week, the central bank's first such step in a decade.

Most investors expect the Fed to cut rates by at least a 0.25 percentage point, from their current range between 2.25% and 2.5%.

But according to Deutsche Bank, some investors believe a cut isn't really needed since the U.S. economy is still on a solid footing with unemployment close to a half-century low and domestic stock markets charting new highs.

Joe Lavorgna, chief economist for the Americas for the French bank Natixis, said the concern is that slowing growth abroad could push down U.S. inflation, which in recent years has stayed stubbornly below the Fed's 2% target.   

That can happen when central banks in slower-growing countries cut interest rates; such moves typically make assets look more attractive in the U.S., in turn driving up the value of the dollar. Imports then look cheaper to American households and businesses so prices tend to drop. 

Trump, of course, wants the Fed to cut interest rates, per his tweets -- because he said other countries have an unfair advantage. 

"The rest of the world has moved to significantly lower rates, which means that there is potential financial tightening coming through the dollar, which almost forces the Fed to lower rates," Lavorgna said in an interview. "How the global economy performs is important."

It's especially important to the topsy-turvy logic of U.S. financial markets, where the slower growth report might be seen as good news for stock investors: It means the Fed is more likely to provide monetary stimulus at home.