As 2024 comes to a close, the political turbulence around the globe is likely to have lasting effects well into 2025. From the war in Gaza to the escalating tensions in Ukraine, the year has seen crises that have reshaped geopolitics. However, it’s the shifting political landscape, especially the return of former U.S. President Donald Trump, that has the potential to shake up the global economy in 2025.
This year witnessed the rise of populist leaders and growing frustration with current economic conditions, leading to a record number of elections. Many governing parties struggled to maintain their positions, and Trump’s reelection, in particular, raises significant concerns. His stance on tariffs has economists worried. On the campaign trail, Trump proposed hefty import taxes — including a 10-20% levy on all goods and an additional 25% tax on imports from Mexico and Canada. Such measures could spark trade wars, significantly impacting global growth.
Higher tariffs could also hurt the U.S. economy itself. The U.S. is already the world’s largest economy, but imposing tariffs risks stoking inflation, raising consumer prices, and reducing spending. Experts predict that a trade war could knock 2-3% off global GDP, derailing economic progress.
Political instability isn’t confined to the U.S. France and Germany have both seen political upheaval, and instability in the Middle East could also affect global oil prices. While the geopolitical landscape is unpredictable, the economic fallout from these events is expected to reverberate across the world, making 2025 a year of economic uncertainty.
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