Global Economy Remains Strong, Despite Tariff Uncertainty

New York, NY, July 22, 2025-"The global economy is sailing through this year’s historic increase in tariffs, displaying an unexpected trait: resilience,” reports the Wall Street Journal.

“Faced with extreme uncertainty, businesses and households have surprised economists with their ability to hedge, finding a short-term path through as they await clarity on where tariffs will end up. 

“Global producers brought forward purchases and rerouted goods destined for the U.S. through third-party countries that are subject to lower tariffs. For the most part, households and businesses have continued to spend and invest despite the uncertainty, analysts say.

“The world economy grew at a 2.4% annual rate in the first half of this year, around its longer-term trend, according to JPMorgan.

“Trade volumes are buoyant, stock markets on both sides of the Atlantic have rebounded to record highs and growth forecasts from Europe to Asia are being raised.

“Investment, manufacturing employment, spending and overall activity all held up globally, according to Goldman Sachs. 

“‘What people have gotten wrong is the chaotic behavior [of trade policy] and the hedging that has introduced,’ said Marcus Noland, executive vice president at the Peterson Institute for International Economics in Washington, D.C.

“In part, businesses are benefiting from reflexes learned and changes made during the Covid-19 pandemic, such as bulletproofing their supply chains, which compressed margins at the time, but is now paying off. Governments from the U.S. to Germany are also spending lavishly, helping to support confidence.

“Some businesses may be building up inventory now in the expectation that tariffs will be higher in the future, said Angel Talavera, an economist at Oxford Economics.

“‘It seems that the uncertainty is weighing less on economic activity than we thought,’ Isabel Schnabel, who sits on the European Central Bank’s six-member executive board, said in an interview published in recent days on the central bank’s website.”