Trap for Europeans: how the US tariff policy will affect the rest of the world

The introduction of US duties has a deterrent effect on global GDP growth, experts say. Their short-term effect is manifested in higher import prices, higher inflation and lower investment, which forces companies to postpone investments. The structure of global trade is changing: supply chains are being rebuilt, losing efficiency. The details are in the Izvestia article.

What awaits the EU

In the short term, Trump's duties mean rising costs and prices: imports are becoming more expensive, and inflation is higher, says Timur Nigmatullin, senior investment adviser at Finam. In addition, globally, businesses are postponing investments due to uncertainty. According to him, the long-term effects are reflected in domestic demand.

— Real domestic demand is weaker. As a result, the global economy in 2025 will theoretically lose up to about 0.3-0.5 percentage points of growth relative to the scenario of +3% without tariffs. It is impossible to calculate separately by country, since duties are constantly being reviewed," the analyst said.

The United States is facing rising inflation and a slowdown in GDP to about 1.9%, the IMF said in a July report. The European Union is experiencing a blow to exports, growth is unlikely to exceed 1%, China compensates for part of the effect with domestic incentives, providing growth of about 4.8%, but structural risks remain, says Timur Nigmatullin.

Global transformation

— The architecture of the world economy, world politics and the global financial system is changing. Regionalization, offshoring, and nearshoring (a model in which companies move their production operations to countries geographically close to their main sales markets) have already become global trends, and the multipolarity of global processes is increasing," PhD in Economics, Associate Professor of the Department of World Economics at the Faculty of World Economics and Politics, told Izvestia. Higher School of Economics Ksenia Bondarenko.

It highlights the role of duties in changing the international balance in both economics and politics..

"Donald Trump's tariffs accelerated the above trends, and countries that were previously considered strong competitors are now deepening cooperation, for example, Narendra Modi attended the SCO summit in Beijing, and this is the first visit of the Indian Prime Minister to China in the last 10 years," she said.

Developing countries are expanding cooperation in trade, investment, and financial transactions.

— The country-wide diversification of trade is increasing, especially in developing countries. For example, the share of trade between developing countries has grown to about 25% of global trade today, and if current trends continue, it may reach 30% by 2030 or even exceed this value (for comparison, in 1995 it was only 8%), adds Ksenia Bondarenko.

Structural and systemic transformation

The changes taking place in international trade and the multilateral trading system of the World Trade Organization in recent years have caused a lot of discussions about the transformation of the global economy, while the idea of the nature of the transformation processes taking place in the global economy is regularly distorted, said Andrei Baghdasaryan, senior researcher at the International Laboratory for Foreign Trade Research at the Institute of Applied Economic Research of the Presidential Academy.

He explains the scale of the changes: the global economy is undergoing a structural transformation of such magnitude (qualitative changes horizontally), which can lead to a systemic transformation (qualitative changes vertically). The reason for the structural transformation of the global economy, which is accompanied by protectionism and the intensified struggle for competitiveness, is the global technological development.

— Systemic transformation, in turn, is expressed in changing and updating the institutional rules of international organizations responsible for the international division of labor and economic development (WTO, UNCTAD, IMF, UN), — the expert believes.

At the same time, the system transformation will not happen immediately. So far, the existing aforementioned rules remain unchanged, although they are regularly discredited, he added. According to him, duties have a negative impact on international trade: practice shows that in a globalized world, an isolation policy is impractical and does not lead to success for either side."

Court decision

On August 29, 2025, the US Federal Court of Appeals ruled that US President Donald Trump exceeded his authority in his tariff initiatives, confirming the legality of the cancellation of five presidential decrees on indefinite duties. The decree comes into force on October 14, which will lead to the cancellation of most tariffs.

— The plans of the US political leadership are to maintain the position of global economic and technological dominance, as well as to prevent Chinese economic expansion. The main confrontation over the past 10 years has been between the United States and China. All other events are secondary and opportunistic, but they are interconnected in one way or another. These include: blocking of alternative logistics routes, destabilization of sales markets, sanctions and tariff confrontation," said Alexander Baghdasaryan.

Hypothetical scenarios

Analysts are considering several possible trajectories. In the first case, with the partial elimination of tariffs, supply chains adapt, domestic demand in the United States and Europe stabilizes, China supports growth with domestic incentives, and the global economy loses minimal growth shares. In this scenario, the slowdown in global GDP does not exceed 0.3 percentage points, explained Yulia Makarenko, Deputy Director of the Banking Institute for Development.

Alternatively, while tariffs remain in place and trade confrontation intensifies, global economic growth is limited, inflation in the United States exceeds forecasts, and European countries face budget deficits: France 5.5% of GDP, Great Britain 4.4% of GDP, public debt growth from 113% to 116% in Germany and from 101% to 104% in Great Britain, says Ksenia Bondarenko. In these circumstances, developing countries are strengthening trade cooperation and market diversification.

— The largest European countries, especially Germany, France and the United Kingdom, face problems due to external and internal challenges. This is clearly evidenced by the growth in government bond yields, for example. There are still problems with the industrial production sector in Germany, and in France and the UK, a very high budget deficit is expected for the second year in a row," she said.

In the scenario of a technological shift, structural transformation accelerates, the rules of the international division of labor are reformed, and duties lose their key importance. Economic growth is determined by the technological leadership of the United States and China.

— Markets adapt to uncertainty, but structural changes take time. The policy of duties creates short—term risks, but the long-term consequences depend on the internal dynamics of countries and technological transformations," Yulia Makarenko told Izvestia.

The global economy of 2025 is balancing between the short-term effects of Trump's tariffs, long-term technological transformation, and geopolitical competition. In the short term, tariffs slow down growth, increase inflation and increase investment uncertainty. In the medium term, they accelerate structural changes and the multipolarity of global trade.