US economy under Donald Trump faces 'uncertain times' in 2025? Why are experts expecting 'bad'

US Stocks hit record highs and Forbes declared a "banner year for the mega-wealthy" as 141 new billionaires joined its list of the super-rich. However, many experts have claimed that it might get tougher in 2025. If a Donald Trump presidency enacts U.S. import tariffs that spark a trade war, that could mean a fresh dose of inflation, a global slowdown or both. Unemployment, currently near historic lows, could rise, Reuters reported.

Conflicts in Ukraine and the Middle East, political logjams in Germany and France, and questions over the Chinese economy further cloud the picture. Meanwhile, rising up the rank of concerns for many countries is the cost of climate damage.

As European Central Bank President Christine Lagarde said in her press conference after the ECB's final meeting of the year, there will be uncertainty "in abundance" in 2025.


It is still anyone's guess whether Trump will push ahead with tariffs of 10-20 per cent on all imports, rising to 60 per cent for Chinese goods, or whether those threats were just the opening gambit in a negotiation. If he goes ahead with them, the impact will depend on what sectors bear the brunt, and who retaliates.

For many other economies, the prospect of a stronger dollar - if Trump policies create inflation and so slow the pace of Federal Reserve rate cuts - is bad news. That would suck investment away from them and make their dollar-denominated debt dearer.

Finally, add in the largely unknowable impact of conflicts in Ukraine and the Middle East - both of which may have a bearing on the cost of energy which fuels the world's economy.

For now, policymakers and financial markets are banking on the global economy being able to ride all this out and central bankers completing the return to normal interest rate levels.

But as the International Monetary Fund signaled in its latest World Economic Outlook: "Brace for uncertain times".