Tariff dramas trim growth prospects, mostly in North America
We’ve lowered our US GDP growth forecast for 2025 by 0.4ppts to 2.0% and made much steeper adjustments to Canada and Mexico, reflecting our assumption of more aggressive US tariff hikes. The spillovers to the rest of the world are limited, and in the case of Europe offset by a defence-related fiscal boost.
While the global economy is still a long way from recession territory, our updated forecast points to this year being the weakest for world GDP growth since the global financial crisis, excluding 2020.
In this report, we share our thoughts on five questions related to assessing where the risks around the path for tariffs lie:
- To what extent do the latest tariff hikes make Trump’s underlying motives clearer?
- How much pain is Trump prepared to inflict on the US economy?
- How much will Canada and Mexico fight?
- What do the latest tariff hikes signify for the rest of the world?
- What tariffs on the rest of the world will the US announce in April?
Tags:
Related Reports
At a Glance: Global Trade
Explore how slowing global trade growth, China’s export pressures, and accelerating AI investment could reshape world trade volumes through 2026.
Find Out More
Timid budget for 2026 doesn’t wish away fiscal risks for Czech Republic
Despite the new government's 2026 budget being slightly more timid than anticipated, we don't plan major changes to our outlook. However, this doesn't mean the government will show fiscal restraint in the coming years. A smaller deficit will slow but not halt the rise in bond yields in 2026, as markets price in higher current spending-driven borrowing and relaxed fiscal rules.
Find Out More
US Construction Outlook Q4 2025
US construction forecast highlights for 2025–2034, including infrastructure growth, housing outlook, spending trends, and price and rate projections.
Find Out More
How trade shapes the winners and losers of AI boom
Research Briefing Tariff dramas trim growth prospects, mostly in North America Why AI’s biggest trade impact comes from investment cycles, not just innovation leadership
Find Out More
