Chief Economists Outlook May 2025

10Chief Economists Outlook Tariffs can impact growth in numerous ways, including inflationary pressures, weaker consumer sentiment and a fall-off in trade volumes.9 It is not surprising, therefore, that the evidence is mounting that recent trade policy turmoil and the above-the-norm tariff rates during the pause period are affecting the global economy.10 While a majority (53%) of the surveyed chief economists expected the economic damage of the threatened trade war to be mainly focused on the US and the countries targeted by its tariff increases, almost a third (32%) foresaw a broader drag on the global economy. None expected the tariffs to have no economic damage, and only 3% expected damage to be limited to the countries targeted by the tariffs. The level of damage that is done will depend both on decisions the US takes about its planned tariffs after the 90-day pauses conclude and on any retaliatory measures that other countries then decide are warranted. On retaliation, 57% of chief economists expect other countries to rely on counter-tariffs, compared to 22% who expect any retaliation to involve non-tariff barriers, and 19% who expect the use of other economic policy levers. Only 3% don’t expect countries to retaliate against US tariffs. Figure 5. Retaliation for US tariffs Looking at the remainder of 2025, do you expect other countries to retaliate against US tariffs? Percent of respondents (%)Yes – primarily by raising their own counter-tariffs Yes – primarily by introducing non-tariff trade barriersNo Yes – primarily by means of other economic policies3 572219 Source: Chief Economists Survey. (2025, April). 9 The Economist. (2025c). 10 Beattie, A. (2025).