Global Economy Faces Slowdown as Tariffs Reshape Trade

President Trump continues to strongly support tariffs, claiming they are strengthening the US economy. While these claims are debated, there is no doubt that tariffs have reshaped global trade and will keep influencing the world economy through 2026.

Tariffs add pressure to world economy despite steady trade

The IMF expects global economic growth to slow to 3.1% in 2026, largely due to trade tensions caused by tariffs. Although the situation has not turned into a major trade war—because many countries avoided strong retaliation—tariffs have raised costs for businesses and increased uncertainty, making investment decisions harder.

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Despite this, the US economy has remained resilient, driven by strong consumer spending and rising investment, even though tariffs have slightly pushed up inflation. Global trade has continued to grow, helped by tariff exemptions and companies adjusting supply chains.

However, trade relations between the US and China remain tense, with trade volumes declining for a third year. Experts believe tariffs are likely to stay in place and remain a key feature of US trade policy in the years ahead.

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