The Estimated Economic Impact of Tariffs
Global Macroeconomic Impact Global GDP slowdown: The OECD has downgraded global growth forecasts to around 2.9% for 2025 and 2026, citing U.S. tariffs and heightened uncertainty (Business Insider, Wall Street Journal). Similarly, BBVA projects that if current tariffs hold steady, global growth could initially slow by 0.2 to 0.5 percentage points (BBVA Research). Stagflation risks: Citi Research labels U.S. tariffs as a stagflation shock—dampening both spending and real GDP while raising inflation. Global growth, in their model, could drop by approximately 1 percentage point over the year (Citi). World Economic Forum simulation: A generalized 10-point tariff hike could reduce global GDP by 0.7% in the first year, potentially escalating to a 2–3% drop over two years if uncertainty and financial stress intensify (World Economic Forum). Impact on Countries with Vulnerable Economies Mexico & Canada : EY estimates that a scenario involving 25% tariffs on Canada and Mexico (and 1...