The 2025 trade war initiated by Donald Trump has had a much smaller economic impact than anticipated, the European Bank for Reconstruction and Development (EBRD) said on Thursday, as it raised its growth forecasts for this year.
Last Friday, the US Supreme Court dealt a blow to President Trump, ruling he lacked the authority to impose most of the tariffs he introduced. In response, Trump implemented new 10% tariffs, which came into effect on Tuesday.
The EBRD, established in 1991 to support former Soviet bloc countries in transitioning to market economies, now operates in regions including the Middle East, Central Asia, North Africa, and Sub-Saharan Africa.
Across its areas of operation, the EBRD projects economic growth to accelerate to 3.6% this year, up 0.2 percentage points from last year and its previous September forecast.
Looking forward, the institution also anticipates further growth in 2027, with rates predicted to increase to 3.7%.
Certain countries might benefit from lower tariffs following the Supreme Court decision. The EBRD names Serbia, Bosnia-Herzegovina, Moldova, and Tunisia as potential beneficiaries, though overall effects remain limited.
According to Beata Javorcik, the bank’s chief economist, the impact of US tariffs on EBRD regions has been considerably less pronounced than initially expected.
However, Javorcik cautioned that some effects have yet to materialise, as much of 2025’s exports reached the US market in the year’s first quarter, before the tariffs were implemented.
Separately, the EBRD highlights the rise of artificial intelligence in the US, which has stimulated import demand for goods such as semiconductors, computing equipment, and precision optical instruments.
European nations like Central Europe, the Baltics, Bulgaria, and Romania, which export such products, could see economic benefits from this shift, Javorcik added.
