Introduction
An essential part of a country’s journey is its leadership. The US, no stranger to the world’s watchful eyes, has once again shifted gears with the swearing-in of the 47th President, Donald J. Trump, and Vice President J.D. Vance on January 20, 2025. This mid-2025 review examines the new administration’s economic and trade positions, policy initiatives, and their international implications.
The U.S Economy and Growth in 2025
Mid-2025 economic indicators reveal a slight contraction in Q1, followed by a rebound to a GDP growth of approximately 2.4% in Q2. With a core CPI around 2.7%–2.9% and an unemployment rate holding steady around 4.1%,1 the economic landscape appears to be stable. Treasury-reported milestones include tariff revenues nearing $200 billion in FY2025, a modest blue-collar wage growth of about 1.7%, and a notable rise in capital expenditures – approximately 16.6% in the first half of 20251.
However, expert outlooks from OECD warn of a potential slowdown, projecting growth of around 1.6%–1.7% and increased inflation of approximately 3.9% by year-end1.
Tariffs and Trade Policy Overview
President Trump’s aggressive stance on tariffs continues unabated, with baseline tariff rates across China, EU, Canada, and Mexico set at 15–50% by the August 1 deadline1. The ongoing US-Japan trade deal has seen a reduction in import duties to around 15%, causing market rally as investments surge to the tune of $550 billion1.
The Court of International Trade ruled in May 2025 that tariffs imposed under the IEEPA exceeded presidential authority, placing a temporary halt to their enforcement1, causing some international negotiations. The OECD has highlighted the potential risks of a global economic slowdown, with U.S. growth trimmed, inflation rising, and the international forecast decelerating to around 2.9% in ’25 –’261.
International and Regional Developments
The aggressive tariff regime is sparking a backlash, with a European boycott movement targeting U.S. goods and travel warnings issued over U.S. border policies1. Meanwhile, the effects of trade uncertainty are becoming clearer on UK firms, as a panel found a negative impact, though it’s worth noting the exposure is relatively low on average (~3% of revenue from U.S.)1.
Conclusion
Only six months into his second term, President Trump’s aggressive economic and trade policies are in full swing. While there have been some positive economic developments, the potential for a slowdown remains a looming concern. With ongoing international negotiations, protests, and legal battles, the road ahead remains unpredictable. As we continue to monitor developments, it’s clear that staying informed and understanding the implications of these decisions has never been more crucial.
1 Information provided by OECD, U.S. Department of Treasury and Court of International Trade reports.