Scope Warns of Trump Escalation in Trade War

Rating agency Scope warns of a potential escalation in the trade war, despite the resilience of the US economy. Dennis Shen of Scope analyzes five reasons why US trade tensions may increase, reducing global production by 0.7 percentage points.

The reasons include markets' favorable attitude to risk, the resilience of the US economy, increased tariff revenue, limited reactions from trading partners, and internal political conditions in the US.

Average US tariffs have increased to 18.6%, from 2.5% at the end of 2024. Scope estimates that the reduction in global production will be 0.7 percentage points, with greater impacts on the US (0.9%) and milder impacts on the EU (0.4%).