Chief Economists Outlook January 2025

23Chief Economists Outlook 48 United Nations Conference on Trade and Development (UNCTAD). (2024a). 49 Van den Bossche, P . (2023).Trade-war dynamics set to intensify Among all the indications of the economic fragmentation discussed in the previous section, the erosion of support for the global trading system is the most prominent. Although global trade is on track to hit a record $33 trillion in 2024,48 the system is facing significant threats. Institutionally, this is evident in the unresolved breakdown of a key dispute-resolution mechanism at the World Trade Organization (WTO) since 2019.49 Politically, it is exemplified by the success of a US presidential campaign that prominently featured a platform of across- the-board tariffs. All indications point to further trade turbulence in the year ahead. Indeed, large majorities of the chief economists surveyed expect a trade war of tit-for-tat trade restrictions between the US and China (89%) and more broadly (68%). However, while the new US administration’s trade policy is likely to shape the outlook in 2025, it may not signal a dramatic change in trajectory. 4. A turbulent year for trade Share of respondents (%)9 3 1218 71 Between the US and China Wider than the US and China 62 21 6Very unlikely Unlikely Neither likely nor unlikely Likely Very likelyFigure 14. Trade war Looking at the year ahead, do you expect a trade war of retaliatory trade restrictions to break out? Source: Chief Economists Survey. (2024, November).