Why tariffs have not crippled the global economy

In April, after US President Donald Trump unveiled the 'liberation day' tariffs, global trade was expected to collapse, pushing the world economy into a recession. Six months on, these fears have proved to be unfounded. Mint explains why Trump's tariffs have not hurt the global economy, as feared.

- BY N. MADHAVAN

1 How has global economy fared post Trump's tariffs?

It has managed to perform much better than expected. In July, the International Monetary Fund (IMF) pegged the 2025 global economic growth at 3%. This is 20 basis points higher than its April forecast. In 2024, the world economy grew by 2.9%. Inflation is expected to remain benign at 4.2%. According to the World Trade Organization (WTO) data released on 7 October, global merchandise trade grew by 4.9% in volume terms and 6% in dollar terms in the first half of 2025. It has, consequently, revised sharply its merchandise trade growth estimate for 2025 to 2.4% from its earlier forecast of 0.9% made in August. Most large economies are growing and have managed to avoid a recession.

2 What contributed to this surprising show?