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S\&P Cuts Global Growth Forecast Due to US Tariffs
S\&P Global Ratings slashed global growth forecasts by 0.3 percentage points for 2025 and 2026 due to US trade tariffs, projecting a 0.5 percentage point decrease in US growth to 1.5 percent in 2025, while the UK is expected to have a higher growth than initially anticipated in 2025 (0.9 percent).
- What are the potential long-term implications of the current US trade policy shift on the global economic landscape, and what uncertainties remain?
- The long-term consequences of the US trade policy shift remain uncertain, according to S\&P. Further downward revisions to growth forecasts are possible, depending on the extent of the spillover effects from the tariff shock to the real economy. The report underscores the interconnectedness of global markets and the potential for significant disruptions stemming from protectionist trade measures.
- How does S\&P Global Ratings differentiate between the direct and indirect economic impacts of the US tariffs, and what is the relative significance of each?
- The downward revision reflects both the direct impact of tariffs on trade and the indirect effects on global confidence and uncertainty. S\&P's analysis indicates that indirect effects, stemming from reduced investor confidence and uncertainty, often outweigh the direct impacts of tariffs on prices and profits. This highlights the broader systemic risk associated with escalating trade disputes.
- What is the primary factor contributing to S\&P Global Ratings' downward revision of global growth forecasts, and what are the immediate consequences for major economies?
- S\&P Global Ratings has lowered its global growth forecast by 0.3 percentage points for 2025 and 2026, citing US trade tariffs as the primary cause. This negative impact is projected across all regions, with the US economy expected to be 0.5 percentage points weaker in 2025 at 1.5 percent growth. The UK, however, is projected to experience slightly higher growth than previously anticipated in 2025 (0.9 percent).
Cognitive Concepts
Framing Bias
The framing emphasizes the negative economic consequences of the US tariffs. While the report presents data, the headline and introduction immediately highlight the negative impacts, potentially shaping the reader's interpretation toward a pessimistic view of the global economy. The inclusion of the UK's short-term bucking of the trend is presented as an exception rather than a potential counterpoint to the overall negative forecast.
Language Bias
The language used is largely neutral and factual, relying on data and quotes from S&P. However, terms like "seismic and uncertain shift" and "trade war" may carry a slightly negative connotation, implying greater uncertainty and conflict than may be strictly factual.
Bias by Omission
The analysis focuses primarily on the economic impacts of US tariffs, as reported by S&P Global Ratings. While it mentions the UK and Eurozone, the depth of analysis for these regions is significantly less than that for the US. The long-term global economic implications beyond the immediate impact of tariffs are not fully explored. Omission of alternative perspectives on the tariff impact beyond the S&P's assessment is a notable point. For example, perspectives from businesses directly affected by the tariffs or economists with differing viewpoints are absent.
Sustainable Development Goals
The article highlights a negative impact of US trade tariffs on global economic growth, leading to weaker economic output across various regions. This directly affects 'Decent Work and Economic Growth' as reduced economic activity can lead to job losses, lower incomes, and hinder overall economic progress. The downward revision of growth forecasts for the US, Eurozone, and other economies underscores the substantial negative impact on employment and economic prosperity.