Investing.com -- The World Bank said on Thursday that a 10% across-the-board tariff imposed by the U.S. could decrease the global economic growth rate, which is already tepid at 2.7% in 2025, by 0.3 percentage point.
This is under the condition that America's trading partners respond with their own tariffs.
The World Bank mentioned that these tariffs, proposed by U.S. President-elect Donald Trump, could potentially reduce U.S. economic growth, which is predicted to be 2.3% in 2025, by 0.9%.
This is assuming that retaliatory tariffs are put in place. However, the bank also stated that U.S. growth could rise by 0.4 percentage point in 2026 if U.S. tax cuts were continued, with minor global repercussions.
In its most recent Global Economic Prospect report, the World Bank projected a steady global economic growth rate of 2.7% in 2025 and 2026, the same as in 2024. The bank also cautioned that developing economies are now facing their weakest long-term growth outlook since 2000.
According to the bank, growth in developing countries is anticipated to reach 4% in 2025 and 2026. This is significantly lower than pre-pandemic estimates due to high debt loads, weak investment, slow productivity growth, and the escalating costs of climate change.
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