The US president’s trade policy is slowing investment and reshaping supply chains, according to the outlet
The global fallout from US President Donald Trump’s tariffs is set to wipe out $2 trillion from the world’s economy by 2027 as a result of trade and investment disruptions, Bloomberg reported on Monday.
Since returning to office in January, Trump has embarked on a tariff campaign aimed at protecting US manufacturers and overturning trade deficits. In April, he introduced a blanket 10% tariff on all imports and higher tariffs on specific countries deemed to have unfair trade practices. Some tariffs were paused for trade negotiations but are set to take effect on August 1.
The overall level of US tariffs is now the highest since the 1930s, about six times what it was when Trump took office, according to Bloomberg. The policy is already causing companies to freeze capital spending, reroute supply chains, and trim margins to absorb rising costs, the outlet claims.
“The hit to the world economy will reach $2 trillion by the end of 2027 relative to its pre-trade war path,” the article says.
Worldwide, foreign direct investment, considered key for long-term economic growth, is headed for another decline this year, adding to an 11% drop in 2024, according to a recent UN report.
The tariff negotiations are “bad for investment,” said Daniel Harenberg, lead economist with Oxford Economics, calling them “a tax that puts sand in the wheels of supply chains and global trade.”
The US has so far announced preliminary agreements with the EU, Japan, Vietnam, and the UK, and declared a truce with China after previous tariffs triggered a trade war that shook global markets.
With the tariff deadline approaching, US officials will meet with Chinese representatives this week. Other major deals, such as with Canada, Mexico, India, and South Korea, are still pending.
The IMF and OECD have both downgraded global growth forecasts, citing disruptions from tariffs.
