An uncertain future. Donald Trump’s return to the White House will mark a 2025 that seemed to have a positive trend. The interest rate cuts by the US Federal Reserve and the European Central Bank, the good evolution of the Euribor and the reduction in inflation had filled the forecasts with a certain optimism, but the recipes that the elected candidate plans to promote raise numerous doubts.
Although he has not yet taken office, the Republican leader has already sent more than one warning to sailors about the plans he plans to implement in the next legislature. On December 20, it warned the European Union that it will raise tariffs on European products in the event that the purchase of gas and oil from your country does not increase very significantly.
“I told the European Union that it must compensate for the tremendous deficit with the United States by purchasing our oil and gas on a large scale. Otherwise, it will be tariffs all the time!” he threatened on his social network, Truth.
A message with which the president-elect reiterates that tariffs continue to be the main economic measure that the new North American administration will implement. From The Institute of German Economics (IW) is already saying that the increase in tariffs could cost around 180 billion euros annually.. “Trump would use tariffs as a means of pressure to achieve short-term advantages for the US and would ignore or even abandon multilateral regulatory systems and institutions,” .
In suspense for his promises
Everyone is waiting to see what the Republican leader is up to. Their promises suggest that tariff policy will be inevitable, in a context of economic recovery after the drop in inflation and the cuts applied by the US Federal Reserve (Fed) and the European Central Bank (ECB).
Although the two central banks continue with their roadmap, the uncertainty about the effects that a tariff approach like the one proposed by Donald Trump will cause raises fear of a negative future economic effect for the rest of the countries.
As soon as he won the elections on November 5, the president-elect issued several warnings to different countries. He assured that It would ‘punish’ Mexico and Canada with a 25% tax on all their products and 35% for China.
José Manuel Corrales, professor of Economics and Business at the European University, explains that the effect that Trump will cause with this type of policies will be “instability.” “What Trump brings is uncertainty and if he applies the recipes and fulfills his commitments it is clear that we are going to a more insecure world,” he defends.
“In a context of polarization, there is a trade war. What Trump is proposing is to impose tariffs and that could cost Spain 0.6% of GDP. Possibly, it will have the positive result that some will make gold, like Elon Musk , for example, but not to the entire citizenry,” he criticizes.
What Trump is proposing is to impose tariffs and that could cost Spain 0.6% of GDP
José Manuel Corrales, professor of Economics and Business at the European University
José Manuel Corrales is pessimistic in the event that the new North American administration continues with its plans and believes that “there is a good chance that an economic crisis will begin at the end of 2025.” “I hope I’m wrong and Trump’s commitments and promises are not fulfilled, because The trade war is not going to have positive results for anyone and here we will be very harmed“he adds.
Álvaro Herrando Guibert, academic coordinator of the Master of International Economics at the International University of La Rioja (UNIR), also considers that 2025 may be marked by “a new wave of protectionism if Trump applies widespread tariffs, as he has promised.”
“The experience of 2018-2019 showed that these policies did not reduce trade deficits, but they did generate significant economic costs, especially for consumers and companies dependent on imports. In the current context, with a more resilient China and Europe in stagnation, these tariffs could amplify global disruptions, impacting supply chains and reconfiguring international trade,” he explains.
In the current context, with a more resilient China and Europe in stagnation, these tariffs could amplify global disruptions
Álvaro Herrando Guibert, academic coordinator of the Master of International Economics at UNIR
A new hybrid war
Trump’s words make it clear that his return to the White House will be marked by the tariff policy he plans to implement against countries like China. In fact, his stance against the Asian country has led him to request that the social network TikTok be banned in the United States.
For experts, measures such as those proposed by the president-elect would generate a hybrid war scenario between two of the main world powers and would open a tax crossing in which they believe that the most affected will be Europe.
Álvaro Herrando Guibert considers that it is a “practically inevitable” scenario and that “Trump’s protectionist policies, especially tariffs of 10-20% or specific tariffs of 60% directed at China, would be perceived as a direct escalation in commercial and technological rivalry“.
Trump’s protectionist policies would be perceived as a direct escalation in trade and technological rivalry
Álvaro Herrando Guibert, academic coordinator of the Master of International Economics at UNIR
“China has learned from previous tensions, boosting its technological self-sufficiency and market diversificationbut will respond with equivalent measures. “This will not only affect the US and China, but will drag down other countries, intensifying tensions in critical sectors such as technology, energy and strategic minerals,” he says.
José Manuel Corrales, professor of Economics and Business at the European University, looks further and sets his sights on the mid-term elections of November 2026. “A policy cast with too little left hand could make him receive a serious corrective in the midterm elections“, he justifies.
“The EU must be more strengthened to face this new stage. If the answer only comes from China and Europe is not able to reach an agreement, we are going to have a very bad time. If this model ends up being imposed on China, things will not go so badly, because it is playing an important role,” he details.
If the answer only comes from China and Europe is not able to agree, we are going to have a very bad time
José Manuel Corrales, professor of Economics and Business at the European University
The new leadership in the midst of rate cuts
Trump’s return to the White House occurs at a time of general de-escalation of interest rates by the Fed and the ECB. The president-elect was very critical of the head of the North American financial institution, Jerome Powell, and accused him of doing campaign in favor of the Democratic candidate, Kamala Harris, after applying an aggressive reduction.
Doubts about whether these rate cuts will continue with the new administration are evident, but experts assure that Trump will not cause a change in monetary policy.
José Manuel Corrales anticipates that the cuts in the price of money “will not be interrupted”, but he does see the increase in tariffs as key to their evolution. “They can cause an increase in inflation and that makes us return to the orthodox recipes of maintaining higher rates“, he assures.
“The rate hike that occurred from 2022 to mid-2024 was the wrong policy. To a large extent, they have facilitated Trump’s victory because they have impoverished families. But it is not going to affect the rate cut much in the short term either.“he reasons.
Álvaro Herrando Guibert agrees with José Manuel Corrales that the Fed is “independent”, but that protectionist policies under Trump “could fuel inflationary pressures.” “New tariffs would increase import costs, generating additional inflation that would force the Fed to maintain or even tighten its restrictive policy.“he points out.
“This could limit any expected de-escalation in 2025. For its part, the ECB, facing a stagnant European economy, would have less room to follow the same line, aggravating the monetary divergence between the US and the eurozone. This scenario would increase pressure on the euro and make economic recovery in Europe even more difficult.“he adds.
