The world’s major growth engines are about to run in reverse. The policies and uncertainties of US President Donald Trump’s second administration have hit a sluggish global economy with a transformational exogenous shock. Risks are especially worrisome in both the United States and China, which have collectively accounted for a little more than 40% of cumulative global GDP growth since 2010.

Global GDP is likely to shrink again in Q2. Inflation will rise, and real pain will start to set in. Key industries will be disrupted, dragging down production and consumption. The United States may miss its growth target for 2025, and as a new cross-Atlantic trade war looms, growth may slow in the eurozone as well.

A great many negative consequences would follow a successful effort by the United States to pull the MFN rug out from under the world’s second-largest economy. If this key pillar of global trade is taken away, the collapse of the WTO itself could follow.

The introduction of reciprocal tariffs represents a pivotal shift in U.S. trade policy. The move from multilateral trade engagements to bilateral or regional agreements is a strategic effort to redefine international trade and ultimately give the United States an advantage.

The recent wave of volatility reflects policy missteps, market overheating and a shifting global landscape. Short-term risks remain, and vigilance is required for both economic indicators and policy. We’re living through a time in which there is no substitute for calm and prudent analysis.

A combination of diverse factors, including interest rates, inflation, the fiscal sustainability crisis and judicial and political resistance, may reduce the flexibility of U.S. President Donald Trump’s economic policies.

At the wake of the 2008 financial crisis, investor Warren Buffett warned of derivatives as weapons of financial mass destruction. President Trump's "reciprocal tariffs" could have a similar impact on world trade.

It’s impossible to predict the outcome of a random experiment. Yet that is the task that awaits us as we try to make sense of another Donald Trump era.

In a dramatic escalation of trade tensions, US President Donald Trump has imposed an across-the-board 10% tariff on goods from China, threatened a 25% tariff on imports from Canada and Mexico, and vowed similar measures against the European Union. His stated objective is to secure deals to halt the flow of drugs and unauthorized immigration into the United States, suggesting that tariffs will now be an instrument of border security. But trade barriers on this scale could destabilize global markets, drive up prices for American consumers, and potentially drag the US – and the world – into recession. In betting that the potential economic fallout is worth the gains in border security, Trump is gambling with America’s long-term influence and prosperity.

In a social media post on January 30, 2025, US President Donald Trump threatened 100% tariffs on BRICs countries unless they committed to “neither create