The global economy is entering a new era of uncertainty: tariff escalations, AI breakthroughs, and shifting trade alliances all contributing to a fragile balance. Discover how these forces collide and what businesses, investors, and policymakers must watch closely in the second half of 2025.

The Surge of Tariffs in a Fractured Trade Landscape

Global trade tensions are rewriting the rules of international business.

Tariffs are no longer isolated tools — they’re wielded as strategic weapons. The IMF warns of a “mixed inflation picture” amid rising tariffs globally, as companies absorb costs and others struggle with demand contraction. Reuters

Italy’s business lobby has already downgraded its GDP growth forecast to just 0.5% for 2025, citing weak exports and geopolitical stress from U.S.–EU tariff disputes. Reuters

Inflation’s Uneven Path and Central Bank Responses

Central banks are walking a tightrope between inflation control and growth support.

In the U.S., core inflation is rising even as demand softens — a scenario that complicates rate decisions. Reuters Meanwhile, China's central bank is pledging more policy support, signaling possible easing to counter external headwinds. Reuters

The divergence in inflation trajectories across regions could lead to volatile capital flows, straining smaller and developing economies that depend on stable foreign investment.

AI as a Macro Disruptor

Artificial intelligence isn’t just a tech story — it’s an economic engine and a destabilizer.

Recent academic work suggests AI adoption is significantly affecting GDP growth across nations. arXiv As generative models, automation, and predictive analytics become tightly integrated into industries, businesses must adapt or risk obsolescence.

For many companies, AI is no longer optional — it’s a competitive necessity. But scaling AI requires investment, data infrastructure, and regulatory alignment, which many economies are only beginning to address.

Global Growth Outlook: Weakening & Uneven

The world may be shifting from synchronized growth to fragmented stagnation.

According to the World Bank, global growth is projected to decline to 2.3% in 2025, driven by trade barriers and policy uncertainty. Banco Mundial The OECD, meanwhile, expects global growth to slow to 3.2% in 2025. Trading Economics

Much of this slowdown will stem from emerging markets, where tighter external financing and weakening exports could amplify inequality and debt risks.

What Businesses and Policymakers Must Do Now

Adaptation is the only path forward — but the route is complex.

First, firms must reconfigure supply chains for resilience over efficiency. Diversification matters more than ever as tariffs bite.