Analysts, however, warn that hurdles to growth are likely to mount in the coming periods as tariffs climb further.
Recently, as countries released their second-quarter GDP figures, a clear pattern emerged. Many economies slowed in Q2 after a robust Q1, during which U.S. firms accelerated inventory buildup ahead of tariff hikes—and now face slowdowns as new duties take effect.
Ireland, for example, saw GDP soar by 7.4 percent in Q1 before falling by 1 percent in Q2. The U.K. economy likewise decelerated from a 0.7 percent growth in Q1 to just 0.3 percent in Q2, while Switzerland’s pace went from 0.8 percent to 0.1 percent over the same period.
Despite the fluctuations, first‑half growth remains reasonably strong in the U.K. and Switzerland. And although some major economies have yet to report Q2 data, global economic growth has held up better than foreseen as the threat of new tariffs loomed. Japan’s Q2 GDP, released last Friday, showed a 1 percent annualized rise—outpacing forecasts of 0.5 percent.
According to the Wall Street Journal, based on published data to date, many parts of the global economy may thus far have felt minimal impact from tariffs—but the effects may still be pending. Spain’s economy grew 0.6 percent in Q1 and 0.7 percent in Q2, while Poland recorded similar gains.
That many countries have opted not to retaliate against U.S. tariffs could be seen as a victory for Washington—but also for global stability. So far, a return to chaotic tit‑for‑tat retaliation reminiscent of the 1930s seems unlikely.
Still, that does not mean the global economy is immune to Trump’s trade policies. Economists caution that it may take time before the full effects of tariff increases are known—and further hikes may deepen their economic toll.
Indeed, higher tariffs already appear to be cooling trade flows. The Netherlands Bureau for Economic Policy Analysis estimates that goods flows across borders rose sharply—by 1.9 percent—in the first quarter as U.S. businesses front‑loaded imports. But by April, global trade had dropped 1 percent—and fell a further 0.9 percent in May.
June data are not yet available, but another global trade dip seems likely.
“The full impact of recent tariff measures is still playing out. The shadow of tariff uncertainty continues to weigh on business confidence, investment and supply chains,” WTO Director‑General Ngozi Okonjo‑Iweala said.
Nevertheless, the WTO has raised its forecast for global goods trade in 2025 to 0.9 percent, from an April projection of a 0.2 percent contraction. This revision was based on the Q1 surge in U.S. imports—but the WTO expects that increase to be offset by weakened U.S. import demand in 2026.
The trade body believes that current tariff levels could, in due course, inflict more significant damage on the global economy than the 10 percent baseline that was in place from April until its recent expiration.
Policymakers worldwide seem to agree—and are acting to counter the effects of higher tariffs. “Thailand’s economy is expected to slow in the second half of the year due to the impact of U.S. trade policy, including both direct and indirect effects,” the Bank of Thailand noted when cutting interest rates last week to support growth.
Source: vneconomy.vn
