The effects of the tariff war lower the estimates for the United States by six tenths of a percentage point and for the European Union by three tenths of a percentage point.
According to a recent study by Crédito y Caución, the global economy will grow by around 1.5% in 2025, which is four tenths of a percentage point less than the last analysis carried out in December. The geopolitical tensions derived from the trade war will slow down the economic dynamism of most markets. In the case of the United States, growth forecasts have been cut by six tenths of a percentage point to 2%. For Europe, the fall is three tenths, leaving the growth estimate at 1.9% for 2025.
The announcement of the imposition of tariffs by the new US administration and the response by the affected countries, such as the European Union and Mexico, paint a picture of a convulsive economic scenario with major challenges that the main economies will have to face, such as rising costs and falling demand, among others.
The US economy itself faces major challenges in addition to the trade war. Massive layoffs in the federal government and its new immigration policy will directly affect the capacity of its labour market, which will eventually have an impact on prices, especially in the services sector. Another risk is the fall in consumer confidence, which is concerned about a possible rise in inflation and the Federal Reserve keeping interest rates high for longer. These factors will cause private consumption to start declining more significantly from the fourth quarter of 2025. This will lead to a stagnation of investment, which is the main reason for the downward revision of US economic growth.
In this line, its trade allies will be more affected by tariff volatility, as is the case of Canada, which could enter recession, and Mexico, with a 1.3 point cut in its growth forecast for this year.
The credit insurer's study also analyses the performance of the European economy in the face of the tariff threat. Germany (-0.6%), France (-0.6%) and Italy (-0.4%) face the most negative growth revisions. Germany is exposed to the US market through its automotive sector and machinery production. In Italy, for example, food products represent an industry with substantial dependence on the US.
At the other end of the spectrum, emerging market economies will outperform, such as China, which continues to outperform other regions, with growth of 4.9% in 2025. This is largely due to fiscal stimulus and monetary easing, which are boosting demand in the face of US trade measures.
Overall, it shows that increased restrictions and trade tensions will weigh on the nascent recovery of world trade. The Crédito y Caución study puts international trade growth at 2.5% in 2025, down from the 3.3% forecast in December. The imposition of tariffs will increase trade costs, reduce demand and dampen investment, which indirectly undermines trade.
In times of uncertainty, firms may hesitate to invest due to potential demand weakness or may delay capital spending until uncertainty subsides. Moreover, greater uncertainty may lead to higher credit spreads, especially for long-term loans, as creditors seek compensation for the added risk. No one seems to emerge triumphant from the trade war.
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Source: Crédito y Caución - Atradius
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