Renewed US tariffs are raising alarm among global economists. More than 80 per cent of respondents to a survey from the World Economic Forum said an increase in tariffs would have a negative impact on the global economy, with 42 per cent predicting a “strongly negative” effect.

The May 2025 Chief Economists Outlook, released this week, outlines five key global economic forces: diverging regional growth, the acceleration of generative AI, lingering inflationary pressures, restructured supply chains and weakening business confidence in the West.

The report noted that such measures could intensify geopolitical tensions and disrupt trade flows, particularly in sensitive sectors such as energy and technology.

The authors said: “The prospect of tariff hikes by the US in 2025 is already prompting businesses to reconsider cross-border supply chains and global investment strategies.”

For trade-dependent economies such as Bermuda, the report said, more global friction could have ripple effects on services, shipping and logistics sectors.

A striking 82 per cent of chief economists expect moderate or strong growth in Asia this year, compared with only 3 per cent for Europe. Investment flows and corporate strategies may begin shifting eastward, according to the report.

Furthermore, chief economists have a subdued outlook for Latin America and the Caribbean in 2025, with 55 per cent expecting weak growth for the rest of the year.

“Fiscal space remains constrained in many economies, limiting policymakers’ ability to cushion shocks or support growth,” the report noted.

The International Monetary Fund has downgraded the region’s growth forecast to 2 per cent in 2025, citing external shocks such as US tariff hikes.

At the same time, 64 per cent of economists expect global supply chains to be “rewired” over the next three years due to geopolitical fragmentation. That trend, the WEF warned, would require companies and jurisdictions to be more agile and resilient.

Generative AI is also reshaping the economic landscape. More than 80 per cent of respondents agree AI will drive productivity gains but 60 per cent anticipate major labour market disruptions.

Meanwhile, global inflation remains sticky. Although inflation has eased in Europe and the US, it remains well above target in Latin America and Africa.