Global Economic Outlook 2025: US Tariffs' Impact on Inflation and Growth
New York, Wednesday, 10 September 2025.
The Global Economic Outlook Briefing 2025 highlights US tariffs’ effects on inflation and global economic growth, with potential growth opportunities in Europe despite disinflationary pressures.
Introduction to Tariff Impacts
The Global Economic Outlook Briefing 2025 emphasizes the anticipated effects of US tariffs on inflation and the broader global economy[1]. Despite potential disinflationary impacts from these tariffs, opportunities for growth may arise in Europe, particularly with the possibility of a Trump-led administration initiating new policies[1].
Impact on US Economy
The report outlines that the risks of a US recession in 2025 have receded, yet concerns remain about whether Trump’s policies could create an inflationary ‘perfect storm’. Current forecasts for the US economy in 2025 predict a 1.5% growth and 3% inflation rate, although there are downside risks to growth as tariff rates become clearer[1]. The tariffs are estimated to add nearly $1,300 to the average tax burden per US household in 2025[2].
European Economic Prospects
In Europe, the report suggests that ‘Trump 2.0’ could catalyze growth as European governments may be compelled to increase spending under pressure from the US. This could offset some of the disinflationary impacts of the tariffs[1]. The European Central Bank is also considering rate cuts, which could further stimulate economic activity[1]. Despite these efforts, the recent EU-US trade deal is expected to result in a reduction of about 0.5% off the Eurozone GDP, aligning with the broader expectation of around 0.7% growth in 2025[1].
Sector-Specific Implications
Key sectors such as steel and aluminum, automobiles, and consumer goods are notably impacted by these tariffs, with the US imposing significant tariff rates on imports from major trading partners[2]. The weighted average applied tariff rate on US imports is expected to rise to 19.4%, the highest since 1941[2]. Retaliatory measures from countries like China, Canada, and the EU further complicate trade dynamics, potentially reducing US GDP by 0.9% over the next decade[2].