Global economic growth down over 30% due to Trump

Due to the trade restrictions to be introduced by the new US President Trump, global export value is estimated to fall $135 billion. Thus, 4% of the expected global export growth for 2025-2026 will be lost.

According to our report, Trump will introduce a 25% import tariff for Chinese products when he takes office. For imports from the rest of the world 5%. If this ignites trade disputes with China and Europe, the tariff for Chinese imports could rise to 60% and for Europe to 10%. If this happens, it will reduce global economic growth by -0.8 percentage points. That is almost a third of global growth.

The re-election does not mean good news for the Belgian economy either. Johan Geeroms, our Director Risk Underwriting Benelux: "Belgian companies are going to suffer. With €35 billion in exports per year, the U.S. is in the top 5 of Belgium's most important export countries. Chemical and pharmaceutical products account for a significant portion. The port of Antwerp is crucial for world trade in chemical products. Trump's import tariff is a serious threat to this."

According to Johan Geeroms, free trade has been under pressure for some time. "And Trump is putting a big scoop on that. The international trade climate will further sour. Not only due to protectionism, uncertainty will also increase. Will Trump cut off aid to Ukraine? How lenient is he toward Putin? What will the EU do in response to U.S. restrictions, etc. It all has implications for the euro zone and certainly for an open economy like Belgium."

Belgian business is already affected in two ways. The tariff increase weakens the competitive position of companies exporting to the US. Supply chains may also be disrupted by the increase in protectionism and the backlash that follows.

Johan Geeroms points to China, for example. "If Chinese companies can sell fewer products in the U.S., they will try to sell them in Europe (at dumping prices). Bad news for Belgian SME companies because they are pre-eminently the suppliers of the big European companies that will soon be able to sell less on their own market."

We expect that with Trump's return, inflation in the U.S. will ramp up which will also drive up interest rates. This because of expected stimulus policies such as tax cuts, deregulation and subsidies. We have revised inflation expectations to 2.9% in 2025 and 3.4% in 2026 (previous estimates hovered around 2.2%).

If the Republicans do indeed gain the majority in the US Congress, it means that Trump could influence the appointment of the new Federal Reserve chairman. After all, Jerome Powell's term expires in May 2026.

Johan Geeroms: "Even though the Fed is an independent institution (and probably will be in the future), the very idea of possible market intervention by Trump could lead to higher inflation because it would make financial policy less restrictive." Historical data show that frequent interactions between the president and the Fed chairman in the 1960s and 1970s led to higher inflation, according to our report.