US-China Trade Disputes Threaten Global Growth, US Inflation by 2026
Escalating US-China trade disputes and the removal of tariff exemptions are causing ripples of concern worldwide. Economists warn of significant risks to global growth and US inflation, with consumers feeling the pinch as early as 2026.
The US-China trade war is expected to slow world trade growth to a mere 0.6 percent in 2026, according to Allianz Trade's CEO Milo Bogaerts. However, a recovery is predicted for 2027, with growth expected to reach 1.8 percent.
The slowdown is not the only threat. There's a 45 percent risk of a world trade recession if tensions escalate further. Geopolitical tensions, such as those between Russia and NATO, or China and Taiwan, also pose significant risks to the global economy.
In the US, consumers are set to bear the brunt of tariffs, with increased inflation expected by 2026. Meanwhile, Switzerland's inflation is forecast to remain low, between 0.2 and 0.7 percent.
Despite the challenges, there's a silver lining. World trade growth in 2025 is expected to be 2.0 percent, boosted by early stockpiling, trade route shifts, and high AI investments.
The US-China trade disputes and geopolitical tensions are casting long shadows over the world economy. While a recovery is predicted, the risks are real and significant. Consumers in the US are expected to feel the impacts of tariffs by 2026, with inflation likely to rise. In contrast, Switzerland's inflation is expected to remain low. The world must navigate these challenges carefully to avoid a potential trade recession.
