Tariffs are rising sharply in 2025, with the US rates jumping to 13.3%—the highest since 1939—fueling global uncertainty and triggering a projected $2 trillion hit to global GDP by 2027.

The International Monetary Fund is upgrading the economic outlook for the world this year because President Donald Trump’s protectionist trade policies have so far proven less damaging than expected

The I.M.F. expects the U.S. economy to grow 1.9 percent this year, down from 2.8 percent in 2024. Output in the euro area is projected to accelerate to 1 percent from 0.9 percent last year. Europe’s outlook was revised higher because U.S. importers rushed to buy Irish pharmaceutical exports ahead of tariff increases.