World Bank Warns: Tariffs Could Steer Global Growth Toward the Slowest Decade Since the 1960s

In a sharp rebuke to escalating trade tensions, the World Bank has issued a dire economic forecast, warning that rising tariffs and policy uncertainty are pushing the global economy toward its weakest decade of growth in over 60 years. The message is clear: without significant course corrections, a future of stagnant economies and sluggish living standards lies ahead.

2025 Global GDP

2.3%

Cut from 2.7%

2025 U.S. GDP

1.4%

Down from 2.8%

Decade Average

2.5%

Slowest Since 1960s

Tariff Impact

-0.2%

Drag on Global GDP

The Tariff Effect: A Roadblock to Growth

The World Bank report places significant blame on the escalating "trade roadblocks" initiated during the Trump administration. Tariffs, including broad 10% duties and higher rates on goods from key trading partners, have injected turmoil into global supply chains. This policy uncertainty has sapped business confidence, leading to deferred investments and higher costs for both producers and consumers.

The impact is quantifiable: the bank estimates that global growth could be 0.2 percentage points higher if current tariff levels were cut in half, a significant margin in a low-growth environment.

Regional Hotspots: An Uneven Slowdown

United States

1.4%

Eurozone

0.7%

Japan

~0.6%

India

6.3%

While advanced economies face significant deceleration, the picture for emerging markets is split, with outliers like India showing resilience while others face threats from debt and lower commodity prices.

Why It Matters to You

• For Consumers: The forecast points to slower wage growth, persistently higher prices for imported goods, and a potentially muted job market, especially in service sectors tied to global trade.
• For Businesses: Companies face the dual challenge of shrinking overseas markets and disrupted supply chains. Increased costs from tariffs and weakened global demand squeeze profit margins.
• For Policymakers: The warning is a stark call for a "swift course correction." The path to avoiding a lost decade requires international cooperation, not trade conflicts.

The World Bank's Verdict

Both the World Bank and the OECD are aligned in their warning: unless trade tensions ease, the traditional engines of global growth will falter. They strongly advocate for a renewed commitment to global cooperation, open markets, and stable economic policies to prevent this decade from being defined by stagnation.