Growth slumps significantly in 2026 due to trade war
So far, global trade has fared better than expected despite the trade war. However, the consequences are likely to become more noticeable in 2026. This is shown by analyses from the world's leading credit insurer Allianz Trade in the current "Economic Outlook".
According to Allianz Trade's "Economic Outlook", global trade in goods and services is likely to slow from +2 % in 2025 to +0.6 % in 2026 due to the delayed effects of the trade war - a decline of around two thirds. Only in 2027 will there be a slight recovery again, with an expected increase of 1.8 %. The global economy will also continue to operate with the handbrake on: global gross domestic product will grow by a meagre 2.7 % in 2025 and 2.5 % in 2026, which is well below average. At the same time, stagflation risks remain with inflation remaining high at 3.9 % (2025) and 3.6 % (2026).
The customs receipt arrives in 2026
"Unfortunately, postponed is not canceled," says Milo Bogaerts, CEO of credit insurer Allianz Trade in Germany, Austria and Switzerland. "2025 was characterized by early deliveries and US hamster purchases, shifts in trade flows and significant investments in artificial intelligence. This supported global trade. In 2026, however, the trade war is likely to hit and global trade growth is likely to slump significantly."
This development is not leaving most industrialized nations unscathed - they are facing the lowest growth rates since 2008, and the US economy itself is also treading water: GDP in the US is expected to grow by +1.8 % in 2025 and +1.6 % in 2026, which is one of the lowest growth rates since the beginning of the century and below its potential. At the same time, US companies only pay the bill for the additional tariff costs for around a quarter of imported products. For more than three quarters of all products, this falls on either US consumers or foreign exporters.
Buffer for the US economy: AI investments, interest rate cuts, fiscal stimulus
"So far, political uncertainties and tariff increases have not fully impacted the US economy. The strong increase in AI-related investments such as data centers, but also software and hardware, as well as relatively robust consumption have acted as a buffer," says Ana Boata, Head of Economic Research at Allianz Trade. "In 2026, tariffs are likely to have a gradual impact on consumer prices and weigh on consumption - cushioned by lower interest rates and further fiscal stimulus from the US government to boost the economy. Overall, we expect a decline in growth, but not a drastic slump."
The eurozone is also barely budging, with a further slowdown in growth from 1.2 % in 2025 to +0.9 % in the coming year. For Switzerland, Allianz Trade expects growth of +1 % for 2025, but this has been revised downwards due to the high tariffs, which are particularly detrimental to Swiss exports. Growth of +1.1 % is expected for 2026 and +1.5 % for 2027. Inflation expectations are 0.2 % for 2025, 0.55 % for 2026 and 0.7 % for 2027.
Downside risks lurk: protectionism, de-dollarization, sovereign debt and geopolitics
While global trade has to digest the low blow from the tariffs in 2026, other - not unlikely - downside risks are already lurking, above all a further escalation of tariffs. "Another spiral of tariffs could, at worst, plunge global trade into a recession," says Boata. "The probability of this happening is relatively high at 45 %." Three scenarios would have to occur for this to happen: the escalation of tariffs by President Trump as part of the Section 232 measures, the removal of product exemptions and the end of the current "tariff truce" with China. There is then a risk of serious negative effects on global growth and a sharp rise in inflation in the US. Outside the US, lower demand from the US would lead to oversupply and rising inventories, particularly in Asia, which would put massive pressure on global prices.
Other downside risks include a possible de-dollarization shock in US monetary policy (35 % probability), a sovereign debt crisis (20 % probability) that could constrain fiscal policy in France, Italy, the UK and the US, and a further increase in geopolitical tensions - in particular a conflict between NATO and Russia, an escalation in the Middle East and an open conflict between China and Taiwan.
Source: Alliance Trade
