Fitch: Global economy recovering as tariff war eases – China and US may drive growth

Tariff truce, economic momentum

The report presented at Fitch’s headquarters in London highlights the recent easing of trade policy as a key factor. The tariff conflict between the United States and China has been one of the sharpest economic confrontations in recent years – according to the credit rating agency, the two superpowers have been engaged in a tariff war on a scale not seen since the 1930s. However, recent months have brought significant relief, and this “truce” has allowed this year’s growth expectations to be revised upwards.

Fitch has revised its forecast for US GDP growth from 1.2% to 1.5%, while China’s growth is expected to increase from 3.9% to 4.2%. The eurozone forecast has also been revised upwards, with growth expected to reach 0.8% in 2025, up from 0.6% in April.

Varying tariffs

Tariffs on international trade are also changing: the US effective tariff rate (ETR) is currently at 14.2%, and while it could rise to 18% in the second half of the year, this is still below the previous forecast of 27%. This reduction could help to boost trade and export activity.

Fitch’s optimism is more moderate

Fitch Ratings remains more cautious about the outlook than other rating agencies. Bank of America (BofA), for example, is forecasting global economic growth of 3 percent in 2025, significantly higher than Fitch’s estimate of 2.2 percent. According to BofA, China’s GDP could grow by as much as 4.7 percent and by 4.3 percent in 2026 – both significantly higher than Fitch’s forecast.

However, both institutions agree that the easing of tariff tensions is pushing global growth prospects in a positive direction. The differences lie more in their cautious approach and different weightings of economic risks.