Riders on the storm
Managing uncertainty: Updated Outlook

Executive Summary

The US has kicked off a full-fledged trade war: On 2 April, US president Donald Trump announced “reciprocal” tariffs that exceeded expectations, with products imported from China set to be taxed at a staggering 130% from 10 April.

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• What to watch?
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• In 2025, global GDP growth will slump to a mere +2.3%, the lowest level since the pandemic. Global economic growth is set to decelerate by -0.6pp from +2.9% in 2024 due to the US trade war. 
• Reflation risks make central banks cautious. Inflationary pressures, particularly in the US, are resurfacing, with headline inflation expected to peak at 4.3% by summer, driven by tariffs. 
• Emerging markets are dealing with the (tariff) stick and gaining from the (diversification) carrot. Emerging markets are responding strategically by adjusting tariffs on American goods and diversifying imports.