Global economic growth under the influence of customs duties… and the IMF warns of an upcoming decline
Global economic growth under the influence of customs duties…and the IMF warns of an upcoming decline
The International Monetary Fund announced that it has raised its forecast for global economic growth in 2025 to 3%, in an upward revision compared to last April’s forecast of 2.8%. This improvement was driven by a boom in trade activity, resulting from international companies accelerating the import of goods, with the aim of avoiding new customs duties imposed by US President Donald Trump, in a controversial return toprotectionist economic policy. Despite the immediate positive impact on trade and growth indicators, Fund experts warned that this jump does not reflect real economic strength, but rather reflects immediate disturbances that may fade quickly.
However, what appears on the surface to be an economic recovery hides significant uncertainties, especially in the second half of this year and beyond. With warehouses full of goods, there will be no need to store more; Which threatens a possible contraction in imports and industrial activity later. Also, the continuation of customs complications may limit the movement of trade and push companies to reduce long-term investment, which threatens the stability of emerging markets that depend on capital flows and external demand.
Concern about the slowdown in economic growth in the second half of the year
What is most worrying about this scenario is that it comes at a time when the global economy has not fully recovered from the repercussions of the Covid-19 pandemic and climate change. If protectionist tariffs and short-sighted trade policies represent an obstacle to free trade, at the same time they weaken the ability of countries to finance the green transition, due to the uncertainty of the economic future and market fluctuations. Because higher tariffs on steel and aluminium, for example, could slow down sustainable infrastructure projects and affect the costs of clean energy and sustainable transportation technologies.
The impact of economic growth rates on sustainable development
The apparent increase in growth rates does not necessarily mean that we are close to achieving the Sustainable Development Goals (SDGs), but perhaps the opposite. It reflects a state of “flight forward” at the expense of long-term sustainability. Here, there is an urgent need to rethink global trade policies, in a way that balances economic security with protecting the planet.
Saudi Arabia and China are at the forefront of economic growth
According to the report, Saudi Arabia and China recorded the highest expected growth rates for the year 2025, as the Kingdom is expected to achieve growth of 3.6%, compared to 3% in April’s expectations, while the growth rate of the Chinese economy is expected to rise to 4.8%, after it was 4%, and this is partly due to monetary and trade factors, including the decline in the value of the local currencies and the US dollar. Which contributed to enhancing exports.
The eurozone is moving at a slow pace
On the other hand, other major economies, such as the Eurozone and Germany, appear to be moving at a slower pace; Germany recorded modest growth of 0.1%, after expectations were only zero. As for the United States, its expectations rose to 1.9%, amid rapid economic and financial fluctuations, resulting from fluctuations in trade policies and the White House’s interventions in the Federal Reserve’s monetary policy.
Does economic growth reflect a fair distribution of opportunities?
However, behind these numbers lie deeper questions related to the distribution of the fruits of growth. Does this improvement reflect a fair distribution of opportunities? Will fragile communities and workers in green sectors benefit from it? The answer is not clear, especially since most economic booms were driven by commercial speculation, and not by structural reforms that enable economies to shift towards more sustainable production and consumption models.
The biggest concern here is that some countries will achieve strong economic growth in the short term, which comes at the expense of strategic issues such as climate, the transition to renewable energy, and social justice. Trade inventory build-up, industrial repositioning, and currency devaluation policies may increase emissions and delay investment in green innovation.
Economic growth faces sustainability test
Since his return to the White House, Trump has launched a new wave of tariffs that included 10% on most trading partners, with additional increases on cars, metals, and medicines. Despite reaching a preliminary agreement with China to reduce mutual duties – which was scheduled to be implemented in August – the Fund indicated that the average actual duties in the United States rose to 17.3%, compared to only 3.5% globally.
These ratios pose a major challenge to the global trading system, which has always relied on openness and reducing barriers. If protectionism aims to protect local industries, it actually hinders global supply chains, increases costs for consumers, and confuses investment strategies, especially in sectors related to the green economy. These protectionist trends also make it difficult for international cooperation on climate and sustainable finance.
The effect of pre-fee storage on market stability
As for what is known as “front-loading storage”, which was the main reason for the recent recovery in trade, it does not reflect real growth, but rather a temporary rush by companies to avoid future losses, and the danger here is that this pattern creates short-term consumption bubbles, and exposes the global economy to sudden shocks if demand rates decline later.
Hence, the tests of sustainability are not only environmental, but also economic and social, and if expectations indicate a slowdown in growth in 2026 to 3.1%, the challenge lies in maintaining an economic dynamism that achieves prosperity without compromising the rights of future generations, and within the planet’s environmental limits.
Towards a more balanced global economy
Despite the seeming optimism of the IMF report, many analysts believe that this increase in expectations may be only a temporary “digital mirage.” The global economy – according to the chief economist at the International Monetary Fund – is still in pain, and short-term gains may turn into long-term burdens, especially if confidence indicators in the markets decline or new waves of inflation break out.
Climate challenges continue to cast a shadow over the future of global growth, and if these factors are not included in economic and trade policies, any booms in domestic product will remain incomplete, and perhaps misleading. It is not possible to talk about real economic recovery in light of increasing emissions, erosion of biodiversity, or marginalization of entire population groups.
As mentioned above, growth indicators – no matter how promising they seem – lose their value if they are not translated into a structural transformation that reshapes the global economy, to be more just and sustainable. Therefore, theThe Earth Guards Foundation stresses that current experience reveals that rapid booms based on commercial speculation may give markets a temporary boost, but at the same time they exacerbate the fragility of the economic system, and postpone investment in the green transition and long-term innovation.
Building a balanced global economy requires reshaping trade and financial policies, to be able to protect natural resources, ensure a more equitable distribution of wealth, and enhance the resilience of societies in the face of climate and economic crises together. Therefore, integrating sustainability into the heart of economic decisions becomes a strategic condition for the survival of economies themselves and their ability to continue in a world where challenges are increasing day by day.
