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

Sarah Johnson

In a sharp rebuke to escalating trade tensions, the World Bank has issued a dire economic forecast: global growth is heading into the weakest decade since the 1960s, largely due to rising tariffs and policy uncertainty. Their message: without course corrections, stagnant economies and sluggish living standards lie ahead.

🚨 Why This Matters

  • Global slowdown: The World Bank has trimmed its global GDP growth forecast to 2.3% for 2025, down from 2.7% in January—marking the lowest non-recession growth since 2008.

  • U.S. struggles: America’s economy is expected to grow just 1.4% in 2025, compared to 2.8% in 2024, signaling a significant deceleration.

  • Slowest decade: Through 2020–2027, annual global GDP growth will average just 2.5%, the weakest pace since the 1960s.

The Tariff Effect

  • Trade roadblocks: Tariffs imposed by former President Trump — including 10% duties on most imports and higher rates on Chinese, European, Canadian, and Mexican goods — have pushed global trade into turmoil.

  • Policy uncertainty: The frequent threat of new tariffs and counter-retaliation has sapped the confidence of businesses and investors.

  • Quantifiable impact: Growth could be 0.2 percentage points higher if tariff levels were cut in half.

Regional Impacts

  • U.S. economy: Growth forecast halved to 1.4% in 2025, with similar downgrades in 2026.

  • Eurozone & Japan: Europe may grow by just 0.7%, and Japan around 0.5–0.7%, nominal gains far below global averages .

  • Emerging markets: Developing economies split badly—India may hit 6.3% growth, but lower commodity prices and debt vulnerability threaten others .

Why It Matters to You

  • Consumers: Expect slower wage growth, higher prices, and a muted job market — especially in service sectors.

  • Businesses: Companies face shrinking markets, disrupted supply lines, and increased costs due to tariffs and weakened global demand.

  • Policymakers: The World Bank calls for “swift course correction”—slashing tariffs, improving fiscal discipline, and encouraging investment in jobs and growth.

The World Bank and OECD are aligned in warning that unless trade tensions ease, traditional global growth engines will falter. They advocate for renewed global cooperation, open markets, and stable economic policies to prevent the decade from becoming defined by stagnation.


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