Barclays expects today’s tariff announcement to significantly raise US trade barriers, pushing the average tariff rate to 15%. The bank anticipates global growth to decelerate in 2025 as a result, with consumers likely boosting savings amid higher prices and economic uncertainty.
Key Points:
-
Tariff Expectations:
-
30% tariffs on China, 10% on other countries in baseline scenario.
-
This would raise the average US tariff rate to 15%, a historically elevated level.
-
-
Consumer Behavior:
-
Personal savings rate remains low despite a higher unemployment rate (U3).
-
Anticipated consumer concerns—job losses, higher prices, and weaker equities—could drive a rise in savings, reducing consumption.
-
-
Growth Forecasts:
-
Europe: 10% tariffs expected; forecast for Q4/Q4 2025 growth is 0.4%.
-
China: CY 2025 GDP growth at 4.3%, Q4/Q4 growth at 3.4%.
-
Global: Q4/Q4 2025 growth seen at 2.5%, with CY 2025 at 2.9%.
-
Conclusion:
Barclays views the anticipated US tariffs as a meaningful drag on global economic momentum, especially in 2025. While not the worst-case scenario, the expected average 15% tariff rate would still mark a sharp protectionist turn. Markets should prepare for slower global growth, more cautious consumer behavior, and potential financial market volatility.
For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.
On this topic, here is a chart from Deutsche Bank highlighting historical tariff levels and where this will shake out.
This article was written by Adam Button at www.forexlive.com.