Tax War 2025 could cost the global economy $1.4 trillion

US Expands Tariffs Globally

Global trade shrinks drastically, prices surge, and North America’s welfare takes a major hit. The UK experiences a sharp drop in trade volume.

Full-Scale Global Retaliation

Worldwide trade declines significantly, causing widespread disruptions. The US faces severe welfare losses, while global economic damage reaches $1.4 trillion.

Scenario 6: Full Trade War

This scenario poses severe risks for highly trade-dependent economies like the UK, which is still adjusting post-Brexit.

The report highlights that as a trade-reliant nation, the UK stands at a crossroads. Trump’s tariffs could disrupt supply chains and exports, yet also create new trade opportunities, particularly for increased exports to the US.