World Bank predicts global economic slump due to trade wars

In recent months, the World Bank has issued stark warnings regarding the state of the global economy, revealing that it is anticipated to experience its weakest decade since the 1960s. The organization cites the trade wars initiated by President Donald Trump as a significant factor contributing to widespread economic slowdowns across various nations. The latest forecast indicates that the global economy is set to grow by a mere 2.3% in 2025, a notable reduction from previously optimistic projections. These trade wars have had pervasive effects on both developed and developing nations. For instance, the U.S. is expected to see its growth rate plummet to just 1.4% in 2025, down from earlier estimates of 2.8%. This decrease can be attributed to the substantial rise in trade barriers, particularly the imposition of tariffs on imports from nearly all countries. The World Bank suggests that the trade environment has become increasingly unstable, marked by quick shifts in Trump's trade policies that create uncertainty and inhibit business investment. Moreover, the impact of these tariffs is not confined to the United States. The Chinese economy, for instance, is on track to grow at a reduced rate of 4% this year, hindered by the tariffs imposed on its exports and additional structural challenges such as an aging workforce and a collapsing real estate market. In Europe, economic growth among the 20 countries sharing the euro currency is now projected to only reach 0.7%. This decline is exacerbated by Trump's trade measures, which affect European exports and lead to increased tariffs on imported goods. While there are still bright spots in the economic landscape, such as India being forecasted as the fastest-growing major economy at 6.3%, this growth is still down from previous rates. The World Bank has stated that the environment for developing economies, in particular, is deteriorating due to prolonged issues such as escalating government debt levels. The overall conclusion from the World Bank's findings is that unless there is a prompt course correction in economic policies, the continuing trade tensions and uncertainty might lead to deeper problems in living standards around the world.