Forecasting the world in 2025
FT writers’ predictions for the new year, from the likelihood of peace in Ukraine to whether the Trump-Musk friendship will endure and the chances of a CD revival
A RECENT feature of the Financial Times’ annual predictions has been that what was once seen as a light-hearted exercise has increasingly had to grapple with issues of war and peace. This year our writers offer predictions on conflicts in Ukraine, the Middle East, Sudan – and another kind of war, of tariffs. Readers may disagree, but the scenarios aim to be plausible. Our chief economics commentator Martin Wolf makes a call on US interest rates, and we have lighter fare including where Bitcoin prices might go, artificial intelligence (AI) agents, and a revival (or not) of the CD. Donald Trump’s return to the White House means the US president-elect looms large.
Will Trump start a full-scale tariff war?
Yes, on balance, but it’s not dead certain. By “tariff war”, let’s say at least 10 per cent tariffs on at least half of US imports by the year end. Nobody really knows with Trump. But he will definitely hit imports from China, about 15 per cent of the US total. Mexico and Canada together are around 30 per cent, and their leaders Claudia Sheinbaum and Justin Trudeau, respectively – or a successor – will insist on their toughness on immigration to avert Trump’s threatened 25 per cent tariffs.
Other trading partners will also make offerings and promise retaliation. Over time some will succeed, but Trump will probably be enjoying the power trip and the revenue too much to get rid of most tariffs by December. Alan Beattie
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