The new US government is a global trade war that will slow the growth of both the world and the American economy.
The Fitch International Rating Agency worsened the estimation of global economic growth from 2025 to 2.3% with 2.6% expected in December. In 2026, the increase in global GDP could be 2.2%, Interfax-Ukraine reports.
According to analysts, this year’s US economy will increase by 1.7%against the previously expected 2.1%, by 2026 – by 1.5%, not 1.7%, as expected.
It is noted that the new US government began in the global trade war, which will slow down the growth of both the American world and the economy, will pour inflation on the states and slow down the rate of reduction in the interest rates of the federal reserve.
According to analysts, alleviating the tax budget policy in China and Germany will help reduce the consequences of increasing customs tariffs for imports in the United States, but the eurozone economic growth this year will be even worse than the predicted December. Mexico and Canada will face a technical backline due to their close trade relationships with the United States.
According to Fitch, the current rate of imports (ETR) in the United States has increased by 8.5% from 2.3% in 2024. Experts have predicted that the indicator of imports from Europe, Canada, Mexico and other countries will increase by 15% this year, for China it is 35%. As a result, the total indicator of the ETR this year will grow to 18% before the reduction of up to 16% next year. This will be a record value within 90 years.
According to analysts, increasing duties will lead to increased consumer prices in the United States, a reduction in salaries in real terms and increase the costs of businesses, while increasing uncertainty negatively affects business moods.
According to their model, increasing duties will slow the US, China and Europe’s economic growth by almost 1 percent point up to 2026 and accelerate American inflation by 1 point percentage.
Fitch predicts that the Federal Reserve will postpone the following rates in the fourth quarter of 2025. In 2026, the Fed may reduce the rate three times due to weakening economic growth.
Remember, on March 4, Trump’s new duties of 25% were entered into goods from Mexico and Canada, as well as double duty for Chinese goods up to 20%. In response, China and Canada introduced duties to American goods.
After that, Donald Trump decided to double duties – up to 50% – for importing iron and aluminum from Canada.
OECD appreciates the influence of Trump’s trade policy on the world economy
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.