The global landscape of industrial production is dimming, particularly due to the blanket tariffs imposed during Trump’s presidency. An adjustment to our forecast reveals a 0.5 percentage point decline in global industrial production growth for 2025 since our last update. While Trump’s policies aren’t solely responsible, they significantly contribute to this downturn.
Despite these tariffs, the US industry remains relatively sheltered, buoyed by its vast domestic market. However, the shadows of policy uncertainty loom large, casting doubt on business investments, which constitute the major risk for US industries moving forward.
In stark contrast, Canada and Mexico are gearing up for an industrial recession as new tariffs are anticipated in April. Their export-reliant sectors, including mechanical engineering, electrical goods, and furniture, are anticipated to be the first casualties of this impending downturn.
Additionally, we foresee a 10% tariff on European imports, which, while mitigated by less reliance on US markets, poses a threat to already struggling sectors like automotive. This grim outlook leads to a more pessimistic stance on European industrial competitiveness, causing delays in predicting recovery speeds and scopes.
China, under growing external pressures, faces constraints on its export capacity, further hampering its industrial growth. This ongoing tension highlights the waves of instability that resonate across global industries, hinting that all markets may not weather the storm equally.
Tariffs from Trump’s trade policies are negatively impacting global industrial growth, prompting a 0.5 point reduction in the 2025 forecast. The US, while less affected overall, faces risks from policy uncertainty, while Canada and Mexico prepare for an industrial recession. European industries may suffer under new tariffs, and China struggles under external pressures, limiting export-driven growth.
In summary, the implementation of blanket tariffs under Trump’s administration significantly affects global industrial prospects, leading to diminished forecasts, particularly for Canada and Mexico. While US industries face less direct impact due to their domestic focus, uncertainty threatens business investment. European markets also brace for challenges, and China’s export capabilities are being constrained, indicating a broader industrial malaise.
Original Source: www.oxfordeconomics.com
