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| May happen global economy in 2025 | Photo:AP |
The question is whether Donald Trump will wage a full-scale tariff war or not. A report in the Financial Times (FT) said that a full-scale tariff war is possible, but it is not 100% certain. By tariff war, the FT means that at least 10 percent tariffs will be imposed on all goods imported into the United States by the end of the year. Trump has threatened to impose tariffs of up to 25 percent on goods from Canada and Mexico, in addition to China. The United States imports 30 percent of its total imports from these two countries. They will also continue to pressure Trump in various ways.
But the FT believes that Donald Trump will continue this tariff fight due to the additional tariffs he receives. As a result, Trump does not think that these tariffs will be withdrawn by the end of the year.
The next most serious concern is the Federal Reserve's policy rate. The policy rate has been cut several times since September 2024. As a result, the question is whether the policy rate in December 2025 will be lower than the policy rate in December 2024. The FT believes that this is unlikely to happen.
The reality is that if Donald Trump's election promises, including tax increases and corporate tax cuts, are implemented, inflationary pressures will increase. The FT reported that the Fed will be cautious on this issue, although the European Central Bank and the Bank of England are expected to continue their policy rate cuts.
The most talked about event in the global economy in the latter half of 2024 is the rise in the price of Bitcoin. Especially after Trump was elected, the price of Bitcoin has increased by more than 50 percent. In this reality, it is believed that the price of Bitcoin could rise to $200,000.
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| Global Economy in 2025 | Photo: Pexels |
Electric vehicle sales have increased significantly in the global market in the past few years. It was predicted that 25 percent of all cars sold worldwide by 2025 would be electric vehicles. But now it is being said that this number could be slightly higher than 22 percent.
The FT said that this situation may be caused by the fact that demand for electric cars has not grown as much in other countries outside China. But due to environmental obligations, European car companies will bring new models of electric cars to the market and offer billions of dollars in discounts to bring them within the reach of consumers. The biggest issue for the electric car market is US policy. Donald Trump is in favor of the use of fossil fuels, although Elon Musk, the head of the largest electric car company Tesla, is a very important ally of his.
Investors around the world have been turning to US Treasury bonds in the past few years due to the increase in policy interest rates. But there is some concern about what will happen to that market due to Trump's announced policies. However, the FT news said that the promise made by Trump during the election to increase the central government's debt and reduce tax rates may have an impact on the market. But if investors lose confidence in US Treasury bonds, the country's financial sector could suffer a major blow, and even the stock market could be affected. Therefore, it is believed that Trump will not do anything that will cause investors to lose confidence in the US bond market.
The FT believes that the price of Chinese exports may fall further in the new year. The news says that this situation will arise due to China's greater production capacity and company competitiveness. In October 2024, China's export price index was 5.2 percent lower than the same period the previous year. It is estimated that it could fall by up to 10 percent in the same period this year. This will make it more difficult for other countries to compete with China. It will not be possible for US products to replace Chinese products.
The FT expects the tech sector to continue to grow in the new year. Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla will continue to dominate. The excitement around AI, or artificial intelligence, that has been building over the past few years is set to continue. What has happened with Trump's victory is that the stagnant political cycle has been replaced by a dynamic private sector, led by the tech sector. However, the excess enthusiasm around AI is expected to subside somewhat.