World Economic Outlook Update, July 2025: Opening Remarks by Pierre-Olivier Gourinchas

Global trade developments continue to shape the outlook. Following an unprecedented escalation in tariffs imposed on the rest of the world in April, the United States partly reversed course, pausing the higher tariffs for most of its trading partners. This, and a de-escalation of trade tensions with China in May modestly reduced the US effective tariff rate from 24% to about 17%. Despite these welcome developments, tariffs remain historically high, and global policy remains highly uncertain, with only a few countries having reached fully-fleshed out trade agreements. This modest decline in trade tensions, however fragile, has contributed to the resilience of the global economy so far.

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