2025 Prediction: If the United States raises taxes on China by 60%

In the risk scenario, global exports as a whole would be $1.3 trillion lower by 2035 than in the standard scenario. In terms of the decline in real GDP in 2035 compared to the standard scenario, the US is the largest, at 3.9 per cent. U.S. exports are expected to decline 3.2% year on year in 2025, and the decline in employment is also the main reason for the economic downturn.

In the risk scenario, global exports as a whole would be $1.3 trillion lower by 2035 than in the standard scenario. In terms of the decline in real GDP in 2035 compared to the standard scenario, the US is the largest, at 3.9 per cent. U.S. exports are expected to decline 3.2% year on year in 2025, and the decline in employment is also the main reason for the economic downturn.

 

In most countries and regions except China, real GDP will decline in 2035 due to a reduction in exports as a result of the 20% tariff increase in the United States. Canada (-0.6%), Vietnam (-0.4%), and India (-0.2%), which have a high proportion of exports to the United States, saw larger declines. In China, Australia and Hong Kong, real GDP will rise slightly because their own exports will not fall as much as the world as a whole.

As a response, the Japan Center for Economic Research called for strengthening free trade agreements. The United Kingdom joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on December 15, and the 12 member countries have a combined population more than 1.5 times that of the United States.

The East Asia Regional Comprehensive Economic Partnership (RCEP), to which China is also a member, has a nominal GDP of $29.6 trillion, which is comparable to the size of the United States. The Japan Center for Economic Research stressed that maintaining a free trade system is in the interest of most countries.