Trump’s tariffs didn’t shatter the global economy

WHEN US President Donald Trump announced sweeping tariff measures in early 2025, including a 10 per cent universal tariff and higher reciprocal tariffs on major trading partners, economic forecasters painted dire scenarios, including a major reduction in US economic growth and the triggering of stagflation.

Yet several months into the tariff policy implementation, with the effective rate rising to 15 per cent, the American and global economies have shown extraordinary strength. The tariffs have undoubtedly caused disruptions and imposed costs but the catastrophic collapse many predicted has not materialised.

Economic models initially projected severe consequences. The Penn Wharton Budget Model estimated Trump’s tariffs would reduce gross domestic product by about 8 per cent and wages by 7 per cent. JPMorgan raised the probability of a global recession from 40 per cent to 60 per cent.