The US economy's real GDP growth is expected to decline by 0.5 percentage points over 2025 and 2026, with a persistent annual output loss of around $125 billion and unemployment rising by 0.3%, risking over 500,000 jobs.

Tariff increases have led to higher prices for US consumers, with an average increase of 1.8%, costing households about $2,400 annually, especially affecting clothing and footwear.

Meanwhile, India and China have resumed key trade routes and exchanged rare earth materials after years of strained relations, signaling shifts in international trade diplomacy.

The IMF warns that long-term technological and trade decoupling could significantly reduce global investment and slow growth in advanced economies, including the US, which is projected to grow at 2% in 2025.

In 2025, the United States imposed its highest tariffs since the 1930s, significantly affecting global trade, economies, and market dynamics.

This escalation in tariffs marks a shift towards protectionism, reshaping global trade relations, challenging traditional alliances, and creating a complex environment of higher costs and geopolitical uncertainty.

Average effective tariff rates have surged to 18.6%, levels not seen since the Great Depression, mainly targeting imports from China, Canada, Mexico, and India.

These tariffs, initiated under the Trump administration, have generated over $100 billion in customs revenue this year, impacting sectors like steel, automobiles, pharmaceuticals, and semiconductors.

Trade uncertainty and increased costs are challenging businesses, prompting many to reorganize supply chains and absorb tariff costs, while legal debates over the use of the International Emergency Economic Powers Act continue.

In response, US trade partners are forming new alliances and trade agreements to bypass tariffs, such as Canada importing more cars from Mexico and China shifting soybean purchases to South America.

Despite these tariffs, global trade volumes showed resilience, growing by 4.9% in the first half of 2025 due to preemptive import strategies, though the WTO forecasts a slowdown to just 0.5% growth in 2026.