America’s Boom Days OFFICIALLY Over?

The World Bank dramatically cut its 2025 U.S. growth forecast to 1.4 percent, nearly halving its previous projection as Trump’s tariff policies create widespread economic uncertainty and drag down global trade.

At a Glance

  • World Bank slashed U.S. growth forecast to 1.4 percent for 2025, down 0.9 percentage points from January projections
  • Global growth forecast reduced to 2.3 percent as tariff uncertainty affects nearly 70 percent of world economies
  • Trump’s 10 percent across-the-board tariffs could reduce global growth by additional 0.3 percentage points if trading partners retaliate
  • U.S. inflation expected to reach 3 percent in 2025, up from previous estimates
  • IMF separately cut U.S. growth forecast to 1.8 percent, citing trade tensions and policy uncertainty

Economic Headwinds

The World Bank’s latest Global Economic Prospects report represents a stark reversal from earlier optimism about American economic performance. The institution cut growth forecasts for almost 70 percent of all economies, with the United States bearing the brunt of downward revisions due to escalating trade tensions.

Trump’s implementation of 10 percent tariffs on imports from most countries has created ripple effects throughout the global economy, with the bank warning that retaliatory measures could further dampen growth prospects. The forecast incorporates tariffs in effect as of late May but excludes additional increases announced in April that were postponed until July for negotiations.

The IMF separately reduced its U.S. growth projection to 1.8 percent, marking a full percentage point decline from 2024’s 2.8 percent growth rate. International monetary officials cite policy uncertainty and deteriorating trade relationships as primary factors behind the dramatic revision.

Watch a report: World Bank Warns on Global Growth Impact of U.S. Tariffs.

Global Contagion

The OECD joined international institutions in cutting growth forecasts, projecting U.S. expansion of just 1.6 percent for 2025 while global growth is expected to reach 2.9 percent. The organization emphasizes that trade barriers and policy uncertainty could drive growth even lower than current projections suggest.

Trade volumes are experiencing particularly severe impacts, with global trade growth projected to dip to 1.7 percent in 2025, representing a significant downward revision since January forecasts. The World Bank notes that developing economies face especially challenging conditions, with many struggling to recover from previous economic setbacks.

Inflation pressures are mounting alongside growth concerns, with U.S. headline inflation expected to reach 3 percent in 2025, substantially higher than Federal Reserve targets. The combination of slower growth and persistent inflation creates a challenging economic environment that could persist through 2026 unless trade policies are reversed.