Trump's tariff to slow down global export growth from 2.9% in 2024 to 1.3% in 2025-26: HSBC

ANI April 3, 2025 184 views

HSBC Research warns of significant global trade disruption due to Trump's newly announced tariffs targeting multiple economies. The report projects a sharp decline in world export volume from 2.9% in 2024 to just 1.3% in 2025-26. Imports from China will face tariffs over 50%, while other nations like Vietnam, Taiwan, and India will also experience substantial trade barriers. Financial markets are already feeling the pressure, with businesses and policymakers anxiously monitoring the potential long-term economic implications.

"Our current projection reflects slower US import demand and negative uncertainty impacts" - HSBC Research Report
New Delhi, April 3: The imposition of reciprocal tariffs by the US President Donald Trump is set to slow down global trade significantly, according to a report by HSBC Research.

Key Points

1

Trump announces sweeping tariffs targeting multiple global economies

2

HSBC projects export growth drop from 2.9% to 1.3%

3

Tariffs could reduce global GDP by approximately 1%

4

Uncertainty pressuring financial markets worldwide

The report projects a decline in world export volume from 2.9 per cent in 2024 to 1.3 per cent in 2025-26, mainly due to weaker demand in US and uncertainty affecting global investment and confidence.

It said "As for world trade, our current projection of a marked slowdown in world export volume growth from 2.9 pc in 2024 to 1.3 pc in 2025-26 reflects slower US import demand and the negative impact of uncertainty on confidence and global investment spending".

It also noted that such a large-scale disruption to global trade has no historical precedent. The closest comparison is the trade tensions and tariffs imposed during Trump's first term, which reduced global GDP by around 1 per cent over two years. However, the newly announced tariffs are broader and more significant than those seen previously.

The report mentioned that the impact on global trade is still uncertain, as factors like temporary reprieves, selective exemptions, and negotiated deals could mitigate some of the effects. The new tariffs are set to take effect on April 9.

The report highlighted that financial markets are already feeling the pressure from increased uncertainty. While some risks could be balanced by supportive domestic policies in China and Europe, as well as efforts to diversify trade partnerships and strengthen services trade, investors remain cautious.

The tariffs, announced at the White House Rose Garden on Wednesday, target several key economies. Imports from mainland China now face an effective tariff rate of over 50%, while reciprocal tariffs have been set at 46 per cent for Vietnam, 32 per cent for Taiwan, and 27 per cent for India. Meanwhile, Latin American economies will face a universal tariff of 10 per cent.

If these tariffs remain in place, they could lead to significant disruptions, especially for Asian exporters who rely heavily on US trade. With uncertainty expected to persist, businesses and policymakers worldwide will be closely monitoring how the situation unfolds.

Reader Comments

J
James L.
These tariffs seem like a double-edged sword. While they might protect some domestic industries, the global economic slowdown could hurt everyone in the long run. Interesting to see how this plays out.
S
Sarah K.
As someone working in international trade, this is really concerning 😟 Our company has already started seeing delays in shipments and canceled orders. The uncertainty is the worst part!
M
Miguel R.
The article mentions historical precedent but I think the scale is being underestimated. With supply chains more interconnected than ever, these tariffs could trigger a domino effect we're not prepared for.
A
Amanda T.
Respectful criticism: The article could have included more perspectives from economists who disagree with HSBC's projections. Not everyone believes the impact will be this severe.
D
David P.
The 50% tariff on China is wild! Prices are definitely going up on so many products. Guess it's time to start saving more and buying less 🤷‍♂️
P
Priya M.
Interesting to see India's 27% tariff mentioned. Our export sector is already preparing contingency plans. Maybe this will accelerate our trade diversification efforts?

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
Trump Tariffs Global Trade HSBC Research US Economy International Commerce Donald Trump Trade War
You May Like!