Chief Economists Outlook January 2025

24Chief Economists Outlook 50 York, E. (2024). 51 Global Trade Alert. (2024). 52 International Monetary Fund (IMF). (2024a). 53 World Bank. (2024b). 54 Gopinath, G. et al. (2025). 55 International Monetary Fund (IMF). (2024a).For one thing, it is highly unlikely that the harshest tariffs promised on the campaign trail will be implemented – 94% of the chief economists expect more moderate interventions (see Figure 15). Yet, it is also important to note that trade restrictions are already a familiar feature of the global trading landscape. Protectionist trade policy, particularly towards China, was a hallmark of the last Republican administration in the US, and this stance was sustained – and in some cases extended – by its Democratic successor.50 More recently and more broadly, new trade- distorting policies among G20 countries outnumbered trade-liberalizing measures by 2,402 to 634 in 2024.51 In that sense, a trade war is already under way. Against the challenging recent backdrop of sharp geopolitical tensions and rising protectionism, global trade has been quite resilient.52 As a percentage of GDP , it stood at 58.5% in 2023, down from 62.8% the previous year but still above the 55.8% recorded in 2017.53 Geopolitical tensions have exerted a drag on trade, but the effect has been offset by growing trade between countries that are geopolitically aligned.54 All of this suggests that while the outlook for global trade is subject to significant uncertainty, the risks may not be as dramatic or disruptive as might have been feared. In the survey, 48% of respondents said they expect global trade volumes to continue increasing, compared to 18% who disagreed (see Figure 17). This relatively cautious view is in line with IMF estimates that trade volumes will increase by 3.4% in 2025 – well below the rates being recorded before the global financial crisis but still in line with expectations for GDP growth.55Share of respondents (%)6 94 US tariff increasesTariffs will remain unchanged Tariffs will increase by less than the proposed amount Tariffs will increase by the proposed amount Tariffs will increase by more than the proposed amountFigure 15. US tariff policy The incoming US administration campaigned on a policy of increasing tariffs by up to 10% across the board and by 60% for goods from China. To what extent do you expect this to be implemented? Source: Chief Economists Survey. (2024, November).