At the beginning of 2025, economists were very cautious in their forecasts, fearing an intensification of trade tensions with the election of Donald Trump as US president. This scenario became reality, far beyond what had been imagined. The new President of the United States has decided to strike harder and more broadly than during his first term, even if the reality of the situation has sometimes forced him to back track.
The global economy has been severely shaken by the new American trade policy, which has further destabilised the fundamentals that have governed global trade for the past thirty years. Beyond the immediate effects, we are witnessing a structural change in the world order, which should have a significant impact on the organisation of supply chains.
“Only six months ago, a “soft landing” appeared to be in sight: the global economy was stabilizing after an extraordinary string of calamities both natural and man-made over the past few years. This moment has passed,” the World Bank summed up in its June 2025 economic forecast. In June’s update, the growth outlook has been revised downwards for 2025 and 2026. This year, real gross domestic product is expected to grow by 2.3%, instead of the 2.8% forecast in January. This is the weakest performance in 17 years, excluding global recessions, and projections for 2026 and 2027 also predict very modest growth. "By 2027, global GDP growth is expected to average just 2.5 percent in the 2020s—the slowest pace of any decade since the 1960s", the World Bank said.
Content source : World Bank - @ Upply
The OECD and the International Monetary Fund are, as always, putting forward more optimistic forecasts. The OECD is predicting a global growth rate of 2.9% for 2025 and 2026, a drop of 0.4 percentage points from its forecasts at the start of the year. As for the IMF, it is forecasting a rise in global GDP of 3.0% in 2025 and 3.1% in 2026.
However, the OECD does not rule out a worsening of the situation. "Further increases or swift changes in trade barriers, including through retaliatory actions, as well as more cautious behaviour by consumers and firms, or continued risk repricing in financial markets could all intensify the growth slowdown and trigger significant disruptions in highly interlinked cross-border supply chains. Rising inflation expectations by households could prolong inflationary pressures, especially in economies facing substantially higher trade costs or with still‑tight labour markets, prompting more restrictive monetary policy and weakening growth prospects," the organisation warns.
The European Commission, in its forecasts published in May 2025, also significantly downgraded its projections compared to the previous edition, which dated back to November 2024. This revision is mainly justified by "the impact of increased tariffs and the heightened uncertainty caused by the recent abrupt changes in US trade policy and the unpredictability of the tariffs’ final configuration." Since then, an agreement between the United States and the European Union was concluded in July 2025, without necessarily removing all the ambiguities.
The shock is particularly violent for Germany. GDP is expected to stagnate, after two years of a recession that is proving to be more severe than initially predicted, as growth of 0.7% was initially expected. According to the German Federal Statistical Office, GDP fell by 0.7% instead of 0.1% in 2023, and by 0.5% instead of 0.3% in 2024. In 2025, the 0.3% decline in GDP in the second quarter has already erased the gains in the first quarter. The German government has announced a vast investment plan aimed at “boosting growth”, but it will take time for it to produce its effects. Conversely, Spain continues to show a growth rate significantly higher than the European average.
During his election campaign and the first weeks of his term, Donald Trump promised to impose additional tariffs, particularly targeting countries with which the United States had the largest trade deficit. The officialization of this strategy took place on April 2, dubbed "Liberation Day," through the presentation of a first list of countries with the amounts of additional tariffs assigned to each.
Since then, the figures have changed considerably and it is very difficult to draw up an accurate overview of the tariffs actually in force, as this new trade policy is so unstable. Some trade agreements are still under negotiation, others have been signed but the terms of their implementation remain unclear, and new twists and turns cannot be ruled out, with tariffs being used as a weapon that can be drawn at any time, including for reasons unrelated to trade relations. Added to this is a great deal of legal uncertainty: on August 29, 2025, a decision by a US appeals court upheld a lower court ruling that part of the new tariffs imposed by Donald Trump were illegal.
The saga is far from over, but in the meantime, the impact of the new American trade policy is very real. Global trade in goods and services is now expected to grow by 2.8% in 2025 and 2.2% in 2026, the OECD now estimates, down 0.8 and 1.3 percentage points respectively from the December 2024 forecast. "Much of the decline reflects lower trade in the United States, China, and regional partners who are heavily integrated into their global supply chains” but “the introduction of US import tariffs and greater trade policy uncertainty will also weigh on Europe," the OECD specifies (...)
1/ A clear correction of growth forecasts
2/ Stable inflation… for now
3/ Global trade hit by trade war
4/ Stable or falling transport prices