Paul Wiseman, AP Economics Writer
WASHINGTON (AP) — President Donald Trump’s trade war is expected to cut economic growth in the US and around the world this year, the World Bank predicted Tuesday.
Without naming and mentioning Trump, citing “a significant rise in trade barriers,” the 189 country lender predicted that the world’s largest U.S. economy would increase half a second (1.4%) this year, just like in 2024 (2.8%).
The bank also snatched 0.4 percent points from forecasts for global growth this year. Currently, the global economy is expected to expand by just 2.3% in 2025, starting from 2.8% in 2024.
Indelmitgill, the World Bank’s chief economist, writes that in his advances to the latest version of the two annual World Economic Outlook Reports, the global economy missed the opportunity for “soft landing.”
The US economic outlook is clouded by Trump’s volatile and aggressive trade policy, including a 10% tax (tax) on imports from almost every country in the world. These collections reduce US costs and lead to retaliation from other countries.
The Chinese economy is projected to slow growth from 5% in 2024 to 4.5% this year, to the next 4%. The world’s second largest economy has been hampered by the tariffs Trump has imposed on its exports, the collapse of its real estate markets and the elderly workforce.
Police officers are guarded at the entrance to the Lancaster House where trade talks between the US and China are taking place in London on Monday, June 9, 2025 (AP Photo/Kin Cheung)
File – The “Cosco Shipping France” container ship is moored on April 15, 2025 at LBCT, the Long Beach Container Terminal in Middle Harbor, in the port of Long Beach, California.
File – Employees weld metal at a steel tank factory in Mexico City on February 11th, 2025.
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Police officers are guarded at the entrance to the Lancaster House where trade talks between the US and China are taking place in London on Monday, June 9, 2025 (AP Photo/Kin Cheung)
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The World Bank expects that the 20 European countries that share the euro currency have only increased by 0.7% this year, down from the already inactive 0.9% in 2024. Trump’s tariffs are expected to hurt European exports. And the unpredictable ways he deploys them – to announce them, to stop them, to come up with new ones – created uncertainty that thwarts business investments.
India is once again expected to be the world’s fastest growing major economy, expanding this year with a 6.3% clip. However, that fell from 6.5% in 2024, with the bank down in January from 6.7% forecast for 2025. In Japan, economic growth is expected to accelerate this year, but only from a slump of 0.2% in 2024 to a 0.7% decline this year, it is well below the 1.2% forecast by the World Bank in January.
The World Bank is trying to reduce poverty and boost living standards by providing subsidies and underrated loans to poor economies.
Last week, another multinational organisation seeking to promote global prosperity, an organisation for economic cooperation and development, downgraded forecasts for the US and the global economy.
Original issue: June 10th, 2025, 11:22am EDT
