In brief
As global economic forecasts show a slowdown in growth, the repercussions of President Trump's aggressive trade policies are raising alarms among economists.
The article text: Economic growth across the globe is anticipated to decelerate this year primarily due to the trade war initiated by President Trump, with the International Monetary Fund (IMF) projecting significant impacts on the world's largest economy, the United States. The IMF's latest projections, unveiled on Tuesday, reflect concerns following Trump's decision to implement the steepest tariffs since the Great Depression.A 10 percent tariff has been imposed on nearly all imports, while Chinese imports face even steeper levies, exceeding 145 percent. Furthermore, Trump's so-called "reciprocal" tariffs are aimed at significant trading partners such as the European Union, Japan, South Korea, and Taiwan. However, these have been temporarily put on hold until July as the Trump administration seeks to negotiate bilateral trade agreements.The uncertainty created by these policies is gripping U.S. companies engaged in exporting or that depend heavily on foreign components for their manufacturing, resulting in lower output. This comes at a time when global economies were just starting to stabilize following years of high inflation. Retaliation from China and Canada has already prompted increased trade barriers, while the European Union has signaled readiness to enhance tariffs if the U.S. enacts its proposed 20 percent tax on imports.The IMF's World Economic Outlook report now predicts that global output will decelerate to 2.8 percent in 2025, down from 3.3 percent in 2024. This downturn deviates sharply from the January projections, which suggested growth would remain stable throughout the year. Compounding these issues, the IMF now estimates U.S. growth will diminish to 1.8 percent in 2025, a substantial decline from 2.8 percent the previous year, representing a nearly full percentage point reduction compared to earlier forecasts in January when the U.S. economy was celebrated as the strongest globally.
