Introduction
In this article, we will explore the economic landscape of mid-2025, under the Trump administration, as well as its trade policies and international outlook. Let’s dive into this information-rich snapshot of the United States, to better understand the trends shaping the economy and the strategies shaping international relations.
Leadership, Economy & Growth
Donald J. Trump, elected as the 47th president of the United States, was sworn in on January 20, 2025, with J.D. Vance serving as the Vice President. Under this leadership, the U.S. economy has shown varying degrees of vitality, with GDP growth noted at approximately 2.4% in Q2, despite a slight contraction in Q1. Unemployment hovers around 4.1%, indicating a stable economic progression. Inflation, as per core CPI, places itself between 2.7-2.9%.
On the other hand, the OECD forecasts project a slight slowdown in growth to 1.6-1.7%, with inflation rising to around 3.9% by the end of 2025. As for government revenues and expenditures, tariff revenues have roughly hit the $200 billion mark in FY2025, and blue-collar wage growth is recorded at 1.7%, while capital expenditures have risen a notable ~16.6% in H1 2025.
Tariffs & Trade Policies
Following a robust tariff regime imposed by the Trump administration across China, EU, Canada, and Mexico, baseline rates have been set between 15-50% by the August 1 deadline. Noteworthy developments in trade relations include EU negotiations at Turnberry golf resort aiming for a 15% baseline tariff, and a trade agreement with Japan which reduces import duties to ~15%, prompting a rally in the markets with the deal estimated at around $550 billion in investments.
Despite Court of International Trade ruling against the enforcement of tariffs imposed under the IEEPA, the U.S. administration continues its aggressive trade stance. However, the increasing tariffs have their toll on households, with an average cost of around $1,296 in 2025, projected to rise to ~$1,683 in 2026, and the resultant reduction in market income estimated around 1.4%.
International & Regional Developments
The OECD has warned of a possible global slowdown, with trimmed U.S. growth, rising inflation, and a slow crawl to an estimated global growth of 2.9% in 2025-26. The current trade uncertainty has particularly impacted UK firms, with a modest negative impact, given their relatively low exposure to U.S. trade (approximately 3% revenue).
While trade conversations progress with the U.K. and Pakistan, there’s a chorus of discontent brewing in the form of a European boycott movement, protesting against U.S. goods and a series of travel warnings instigated by U.S. border policies.
Conclusion
The landscape remains dynamic under the 2025 Trump administration, with assertive economic strategies and trade policies shaping both domestic growth and international relations. As the year progresses, the contours of these policies will continue to refine and impact the global economic canvas.