Trump's tariffs to shake up global economy
The upcoming restrictions from the newly elected US President Donald Trump are set to reshape the entire global economic landscape! Analysts are convinced.
The United States can significantly affect global markets, as analysts predict swift tariff measures from Trump’s administration in early 2025. This primarily involves a 60% duty on Chinese imports and tariffs of 10%–20% on goods from other countries. Experts believe this scenario will fuel inflation and slow down investments.
According to preliminary forecasts, US GDP growth will slow to 2.2% in 2025, compared to 2.8% this year. Additionally, at the end of March or early April, the Federal Reserve may hold off on rate cuts, keeping the upper limit at 4.25%. However, despite concerns over tariffs, experts anticipated economic resilience from the eurozone and other nations. Favorable financial conditions are likely to cushion the blow.
Still, Europe might face stagnation in 2025. The European Central Bank (ECB) may prioritize growth over inflation. The regulator could cut rates five times next year, bringing the deposit rate down to 1.75%. This will widen the economic gap between the eurozone and the United States.
Chinese economic expansion is projected to slacken to 4.0%, despite anticipated fiscal stimulus. Trump’s tariffs will only add fuel to the fire, creating stronger headwinds for China’s economy and making stabilization more challenging for Beijing.
Asian economies may see mixed results. Japan, Taiwan, Malaysia, and the Philippines are predicted to perform best, while India, South Korea, and Thailand will likely lag behind due to rising disinflationary trends.
Experts highlight uncertainties surrounding Trump’s deregulation and trade policies. This increases volatility, disrupts global supply chains, and negatively affects investment strategies. Analysts recommend long positions on the greenback, fearing potential global economic fragmentation.