The Government headed by Donald Trump has initiated a global commercial war that will reduce the growth of the United States and the world, increase inflation in that country and delay the federal reserve cuts, foresee Fitch Ratings.

In December 2024, the firm reduced its growth forecast for the United States from 2.1 to 1.7 percent in 2025, and 2026 from 1.7 to 1.5 percent.

Since it is estimated that the tariff impact will add a percentage point to short -term inflation in the United States, we believe that the Fed will delay greater flexibility to the fourth quarter of 2025exposed the rating. He currently calculates that the Fed will only cut the rates once this year and that it performs three more casualties in 2026 as the economy slows down and tariff levels stabilize.

Fitch explained that tax flexibility in China and Germany will cushion the impact of the increase in US tariffs and that Mexico and Canada will experience technical recessions given the magnitude of their commercial exposure to the United States, so it cut their growth projections of those nations by 2025 in 1.1 and 0.7 percentage points, respectively.

We estimate that global growth will decelerate 2.3 percent this year, well below the trend and 2.9 percent of 2024Fitch detailed.

He commented that this downward review of 0.3 percentage points reflects generalized reductions in developed and emerging economies and that the global economic expansion will remain weak in 2026, at 2.2 percent.

The magnitude, speed and amplitude of ads of rates increases in the United States since January are amazinghe said.

Washington’s effective tariff (TAE) rate increased from 2.3 to 8.5 percent in 2024 and is likely to continue upwards.

The most recent Fitch evaluations assume that a 15 percent ABE will be imposed to Europe, Canada, Mexico and other countries in 2025, and 35 percent to China.

This will raise the US TAE to 18 percent this year, before moderating 16 percent next year, when the Canada and Mexico TAE falls to 10 percent.

Tariff increases will cause an increase in prices in the United States, reduce real wages and increase the costs of companies. Likewise, the greatest political uncertainty will affect business investment.

The models suggest that tariffs will reduce GDP by approximately a percentage point in the United States, China and Europe by 2026said Fitch.

By Editor

One thought on “Fitch foresees a lower global growth by tariff war”
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