Best- and worst-case global outcomes from US tariff policy

In response to the fast-moving and highly uncertain tariff environment, our best- and worst-case tariff scenarios seek to provide a plausible range of growth outcomes for the global economy from further shifts in US trade policy. 

The worst-case scenario sees significantly weaker growth than in our baseline, but the upsides to growth for many countries in our best-case scenario are modest at best, especially when compared with our pre-‘liberation day’ views.

Our worst-case tariff scenario

• In our worst-case scenario, the Trump administration pushes ahead with higher country-specific reciprocal tariffs, which hit demand and unleash supply chain stress in the US and beyond.
• Unlike in our baseline, which assumes a modest hit to employment growth, our worst-case scenario sees advanced economy job losses increase significantly, hitting consumer spending.
• In contrast to our baseline forecast, where tariff hikes act as a disinflationary shock outside the US, our worst-case scenario assumes that retaliatory tariffs and supply chain disruption inhibit supply outside the US, too.

Our best-case tariff scenario

• In our best-case scenario, we assume that 10% tariffs remain in place across much of the world, albeit with further exemptions and the removal of some of the universal sector-specific tariffs.