U.S. President Donald Trump’s trade wars are expected to slash economic growth this 12 months in the USA and world wide, the World Bank forecast Tuesday.
Citing “a considerable rise in trade barriers’’ but without mentioning Trump by name, the 189-country lender predicted that the U.S. economy – the world’s largest – would grow half as fast (1.4 per cent) this 12 months because it did in 2024 (2.8 per cent).
That marked a downgrade from the two.3 per cent U.S. growth it had forecast back for 2025 back in January.
The bank also lopped 0.4 percentage points off its forecast for global growth this 12 months. It now expects the world economy to expand just 2.3 per cent in 2025, down from 2.8 per cent in 2024.
In a forward to the most recent version of the twice-yearly Global Economic Prospects report, World Bank chief economist Indermit Gill wrote that the worldwide economy has missed its likelihood for the “soft landing’’ — slowing enough to tame inflation without generating serious pain — it appeared headed for just six months ago.
“The world economy today is over again running into turbulence,” Gill wrote. “And not using a swift course correction, the harm to living standards may very well be deep.’’

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America’s economic prospects have been clouded by Trump’s erratic and aggressive trade policies, including 10 per cent taxes — tariffs — on imports from almost every country on the earth. These levies drive up costs within the U.S. and invite retaliation from other countries.

The Chinese economy is forecast to see growth slow from five per cent in 2024 to 4.5 per cent this 12 months and 4 per cent next. The world’s second-largest economy has been hobbled by the tariffs that Trump has imposed on its exports, by the collapse of its real estate market and by an aging workforce.
The World Bank expects the 20 European countries that share the euro currency to collectively grow just 0.7 per cent this 12 months, down from an already lackluster 0.9 per cent in 2024.
Trump’s tariffs are expected to harm European exports. And the unpredictable way he rolls them out — announcing them, suspending them, coming up with recent ones — has created uncertainty that daunts business investment.
India is once more expected to the be world’s fastest-growing major economy, expanding at a 6.3 per cent clip this 12 months.
But that’s down from 6.5 per cent in 2024 and from the 6.7 per cent the bank had forecast for 2025 in January.
In Japan, economic growth is anticipated to speed up this 12 months – but only from 0.2 per cent in 2024 to a sluggish 0.7 per cent this 12 months, well wanting the 1.2 per cent the World Bank had forecast in January.
The World Bank seeks to cut back poverty and boost living standards by providing grants and low-rate loans to poor economies.
One other multinational organization that seeks to advertise global prosperity — the Organization for Economic Cooperation and Development — last week downgraded its forecast for the U.S. and global economies.
© 2025 The Canadian Press