US Tariff Hikes Expected to Trigger Global Industrial Recession

The recent escalation of US tariffs is projected to trigger a shallow recession in global industry, sharply reducing growth forecasts for 2025 and 2026, particularly affecting US manufacturing, which is expected to contract. These tariffs are driving up US goods prices, slashing imports by an estimated 15% from previous baselines, and hurting export-dependent economies such as China, Japan, Canada, Mexico, and Korea. The Indian auto component sector faces a significant hit, with exporters at risk of losing up to 15% of their operating profits and experiencing a slowdown in revenue growth due to reduced US demand. In Europe, the tariffs, combined with a surging euro, are compounding challenges for exporters, with the euro's 10% rise potentially cutting corporate earnings by as much as 2-3% and threatening a mild recession in Germany. In China, the tariffs could endanger up to 16 million export-related jobs, especially in sectors like communication equipment and apparel. Overall, the tariffs are expected to have a lasting negative impact on global industrial activity, world trade, and employment in multiple regions.