Donald Trump’s on-again, off-again tariff announcements have thrown the world economic outlook into disarray. The IMF recently downgraded its outlook for global growth, as have other institutions in our panel, as we examined in a recent blog post.
With this in mind, in mid-April we polled 121 of our panelists, including top institutions such as Moody’s, Scope Ratings and Bank of Canada, on how U.S. tariff rates and the global economy will likely evolve going forward. Here’s a snapshot of their views.
U.S. tariffs expected to close 2025 below their current level: Close to two thirds of the analysts we polled see the average weighted U.S. tariff ending 2025 in the 10 to 20% range, up from a mere 1.5% in 2022 but lower than the level as of mid-April. Around a tenth of analysts see tariffs above 25% by year-end. The decline in tariffs from April levels hinges on more sector-specific carve-outs, a de-escalation of the effective U.S. embargo currently in place on most Chinese goods, and the successful conclusion of “reciprocal” tariff negotiations with other nations.
Reciprocal tariffs to go ahead: Around two thirds of analysts see the U.S. implementing these tariffs on trading partners after the current 90-day pause expires in July. That said, for some countries, trade talks will likely result in tariffs lower than the extortionate ones first announced by Donald Trump in early April.
Global recession in the balance: The panelists we polled are fairly split on whether a global recession will occur this year, with a similar amount viewing recession as “somewhat or very likely” compared to “somewhat or very unlikely”.
U.S. to avoid a debt crisis and retain its reserve currency status: Roughly nine out of ten panelists don’t expect the U.S. to suffer a debt crisis during Trump’s second term; such a crisis, if it occurs, would be marked by surging bond yields, a collapse in demand for U.S. Treasuries, and government struggles to pay creditors. A similarly large majority of panelists expect the USD to remain the world’s reserve currency, despite losing ground to others—as has already happened in recent years. The Federal Reserve would likely step in to address bond market trouble before it evolved into a full-blown crisis, and there is currently no similarly-sized rival to the U.S. Treasury market as an alternative parking place for today’s financial assets.
For the full survey and a closer look at how our daily Consensus forecasts have changed in recent weeks, download our latest special report on the global economic outlook here.
Insight from our analysts:
“We see the announcement of reciprocal tariffs as a starting point for bilateral negotiations. Effective tariff rates are going to be lower than those announced on April 2, but will likely remain above 10% for most countries. Furthermore, the calculation of reciprocal tariffs appears arbitrary as they are simply based on the bilateral trade deficit in relation to US imports and hence do not reflect actual differences in tariff rates or non-tariff restrictions.” Martin Weder, Zürcher Kantonalbank
“There are likely to be continued unpredictable gyrations between escalations of tariff imposition and pauses/reductions of tariff rates to allow for negotiations and concessions. The new tariffs are adopted especially on 1) counterparties displaying significant trade in goods surpluses with the United States; 2) those that retaliated against US trade policies; and 3) products for which there are hopes for a US manufacturing revival.” Dennis Shen, Scope Ratings
Our latest analysis:
- Korea’s economy unexpectedly shrank in Q1.
- China’s economy beat expectations in Q1, though the good times won’t last.