Chief Economists Outlook September 2025

Trade and global value chains: realignment and ripple effects Global trade is experiencing its most significant disruption in decades, and 70% of surveyed chief economists rate the level of disturbance as “very high”, far above any other area of the global economy. The US has imposed sweeping tariffs that pushed its average rate to a level not seen since the 1930s; it has also eliminated the de minimis exemption for imports under $800, creating new friction for global supply chains.70 China’s temporary tariff truce and easing of chip export restrictions came only after threats to restrict rare earths exports, while other nations scrambled to negotiate lower rates.71 Overall, trade policy uncertainty has eased slightly from its record April peak but remains more than double the levels seen during the COVID-19 pandemic era, underscoring a prolonged period of volatility.72 Figure 8 : Trade and global value chains73 Very low Low Moderate High Very high Level of disruption 3 27 70 Very short term Short term Medium term Long term Very long term Duration of disruption 36 39 24 Highly unlikely Unlikely Neither likely nor unlikely Likely Highly likely Systemic impact 21 7979 Share of respondents (%) Figure 9 : Innovation, technology and data Very low Low Moderate High Very high Level of disruption 33 24 48 21 Very short term Short term Medium term Long term Very long term Duration of disruption 3 6 15 45 30 Highly unlikely Unlikely Neither likely nor unlikely Likely Highly likely Systemic impact 6 36 58 Share of respondents (%)Source: Chief Economists Survey. (August 2025). Source: Chief Economists Survey. (August 2025).The global trade system is adjusting, but slowly and unevenly. The World Trade Organization (WTO) now expects merchandise trade to grow by just 0.9% in 2025, a modest upward revision from April’s negative projection but well below pre-tariff forecasts of 2.7%.74 Supply chains are already reconfiguring, with firms shifting production closer to key markets: Apple alone has announced $600 billion in US supply chain investments.75 Nearly two-thirds (63%) of chief economists expect trade disruption to last for the long and very long term, cementing new patterns of fragmentation. Ripple effects are spreading across the economy. Over 75% of chief economists expect supply chain disruption to cascade into other domains. Financial markets have already felt the volatility: the S&P 500 fell 15% on the April US tariff announcements before rallying to new highs.76 Monetary authorities are now navigating tariff-driven price pressures, which may prove transitory but highlight growing exposure to policy shocks.77 Using critical resources as a bargaining tool, such as China’s rare earths pressure, is likely to accelerate innovation and diversification efforts in global supply chains, reshaping trade and resilience strategies for years to come.78 Technology and innovation: AI drives a structural shift The pace of technological change continues to accelerate, and 69% of chief economists rate disruption in this area as high or very high. Generative AI continues to drive technological change, and more than two-thirds of chief economists expect it to become commercially disruptive within the next year (see Figure 9). The technology is reshaping how research is conducted, unlocking advanced problem-solving capabilities and fuelling extreme competition for talent.79 AI-driven innovation has also unleashed a surge of investment: over 100 new unicorns have emerged in the past two years, pushing the global total close to 500, and single-person unicorns are increasingly viable.80 Chief Economists’ Outlook September 13