Economic analysts have raised concerns that the latest round of import tariffs introduced by the United States could further dampen global economic growth, compounding existing risks.
Last week, US President Donald Trump unsettled global markets by announcing a 10% base tariff on all imports into the country. In addition, steeper duties were imposed on specific countries accused of engaging in unfair trade practices. Although the universal tariff remains in place, the US administration has implemented a 90-day suspension on the higher rates to allow space for potential negotiations.
The intensifying trade tensions have triggered the most severe financial market decline since the COVID-19 pandemic five years ago, leaving investors and economists bracing for continued volatility.
While the stock market has already absorbed the initial shock, experts warn that the broader implications for the global economy could be even more challenging. Despite earlier assessments of economic resilience in 2024, the Organisation for Economic Co-operation and Development (OECD) has pointed to emerging vulnerabilities, citing ongoing inflation and uncertainty surrounding global policy decisions.
Chris Holdsworth, Chief Investment Strategist at Investec Wealth and Investment, expressed concern about the outlook for the remainder of the year. He suggested that the risk of recession in the US and other countries has become more pronounced, indicating that the months ahead may require cautious and strategic responses from investors and policymakers alike.
Adding to the caution, JP Morgan has revised its projection for a global recession, raising the likelihood from 40% to 60% by year-end, reflecting growing unease over the direction of the world economy.
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