It has become almost routine to end each year with talk of the “polycrisis”, and to acknowledge the difficulty of anticipating a future that seems pregnant with the risk of new wars, pandemics, financial crises and climate-driven devastation.
Yet 2025 added a uniquely toxic ingredient to this mix: the return to the White House of US President Donald Trump, whose erratic, unlawful policies have already upended the post-war era of globalisation. Faced with so much uncertainty, can we say anything with confidence about where the United States and global economies are heading?
One thing we can say is that the US economy is not doing as well as Trump would have us believe. Job creation is almost at a standstill, which is no surprise, given that Trump has been sowing uncertainty and weakening the economy in unprecedented ways.
On the supply side, his most pernicious policy has been the frontal attack on immigrant workers. The administration’s mass deportations – carried out by masked Immigration and Customs Enforcement (ICE) agents snatching people off the streets – have killed off the most important source of additional labour supply at a time when the domestic labour force is declining.
Not only do Americans depend on immigrants in industries ranging from agriculture and construction to hospitality and care work, but these immigrants are also a source of demand. Yet now, many Americans of colour, even US citizens, are afraid to leave their homes, lest they be brutalised by ICE.
The negative effects of Trump’s indiscriminate cuts to government have also spread throughout the economy. There are multiplier effects to government contractions, just as there are to expansions, and in the current context, the costs have been amplified by the erratic nature of the process. The administration’s incompetent, blunderbuss approach has sown even deeper uncertainty and induced precautionary behaviour on the part of businesses and consumers.