Global economy recession risks surge on US tariff shockwaves

Three-quarters economists cut their of 2025 global growth forecast, bringing the median to 2.7% from 3.0% in a January poll. The International Monetary Fund was a tad higher at 2.8%

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Risks are high that the global economy will slip into recession this year, according to a majority of economists in a Reuters poll, in which scores said US President Donald Trump's tariffs have damaged business sentiment.

Just three months ago, the same group of economists covering nearly 50 economies had expected the global economy to grow at a strong, steady clip.

But Trump's push to reshape world trade by imposing tariffs on all US imports has sent shockwaves through financial markets, wiping out trillions of dollars in stock market value, and shaken investors' confidence in US assets, including the dollar, as a safe haven.

While Trump has suspended the heaviest tariffs imposed on almost all trading partners for a few months, a 10% blanket duty remains, as well as a 145% tariff on China, the United States' largest trading partner.

"It's hard enough for firms to think about July right now where they don't know what the reciprocal tariffs are. Try and plan another year down the road. I mean, who knows what it looks like, let alone five years down the road," said James Rossiter, head of global macro strategy at TD Securities. Faced with heightened uncertainties and century-high duties on goods, many global businesses have either withdrawn or cut revenue forecasts.