The Bank for International Settlements recently released its "2025 Economic Report," noting that the all-out tariff war launched by the US government in April of this year has completely overturned expectations of a soft landing for the global economy, creating rifts in long-established trade relations, leading to financial market volatility, increased policy uncertainty, and widespread downward revisions to economic growth expectations.
Soft indicators, such as businesses deferring investment and reducing hiring, and households increasing precautionary reserves, clearly indicate that the US tariffs will have a severe impact on global economic growth.
US Economic Current Situation and Risks
◉ Economic Resilience and Current Situation
The US economy has gradually shown potential for a soft landing. Despite facing the dual pressures of high inflation and tight monetary policy, a recession has not occurred as expected.
This is primarily due to several factors:
- Fiscal stimulus measures have effectively ensured the relatively sound financial conditions of US households and businesses;
- The slowdown or recession in the US economy has been limited to certain sectors and not a global phenomenon;
- The Federal Reserve's monetary policy has been neither overly stringent nor lags behind, providing a buffer to the economy. According to the latest forecast from the Atlanta Federal Reserve, US GDP could grow as high as 5.8% year-on-year in the third quarter of 2023, demonstrating the US economy's resilience in the short term, potentially exceeding expectations. However, the slow decline in core inflation compels the Federal Reserve to maintain a tight monetary policy, thus leaving the US economy with significant downside risks.
Macro Growth
◉Soft Landing and Cyclical Slowdown Coexist
The US economy in 2025 presents significant complexity. Goldman Sachs forecasts US GDP growth of 2.4% in 2025, significantly higher than market expectations, primarily driven by continued strength in consumer spending and business investment. However, CMB International's forecast is more cautious, predicting that real GDP growth will slow from 2.7% in 2024 to 2.3% in 2025, indicating the late stage of the economic cycle expansion. This discrepancy reflects the current state of the US economy, characterized by a combination of a "soft landing" and a "cyclical slowdown":
- Consumption-driven Effect
Consumption spending accounts for 69% of GDP. In November 2024, personal consumption expenditures increased by 5.5% year-on-year, while retail sales grew by 4.1%. The wealth effect of rising household net worth supported consumption resilience, but the debt-to-income ratio, falling to a historically low 82%, and the excellent quality of mortgages (68% of which were held by individuals with credit scores above 760) provided a double buffer.
- Diverging Business Investment
Technology investment remained strong, with AI equipment spending growing at an annual rate of 5%, but non-residential investment growth slowed from 3.7% in 2024 to 3.5%. Manufacturing, impacted by tariffs, faced pressure to restructure supply chains in sectors such as machinery and electronic equipment, where over 50% of factories are located overseas.
- Policy Stimulus Effect
Trump's tax cuts are expected to boost GDP growth by 0.2-0.3 percentage points from 2025 to 2027, but tariffs could increase supply chain costs and create stagflation. As fiscal stimulus gradually fades, the marginal benefits of policy dividends will diminish significantly.
Labor Market
◉ Structural Cracks Beneath the Surface of Stability
The US labor market exhibits a complex combination of high resilience and low quality. The unemployment rate remained at 4.2% in November 2024, with 7.7 million job vacancies (the third highest on record). However, deep-seated contradictions are accumulating:
- Declining Job Quality
Among new jobs, part-time positions increased from 17% before the pandemic to 24%, and the gig economy has surpassed $1.2 trillion. While wage growth remained at 4.1%, actual growth after adjusting for inflation was only 1.2%.
- Demographic Impact
The labor force participation rate remained below 63%, down 1.3 percentage points from before the pandemic. Generation Z (born between 1997 and 2012) has become the primary workforce, but their job stability is 15% lower than that of millennials, exacerbating labor costs for businesses.
- Intensifying Skills Mismatch
The manufacturing job vacancy rate reached 5.3%, but vocational training systems are inadequate. The penetration of AI technology has led to a faster-than-expected decline in demand for low- and medium-skilled jobs. It is estimated that 23% of existing jobs will be at risk of automation by 2025.
International Comparison and Strategic Risks
◉ In the global economic landscape, the United States maintains a relative advantage, but its lead has narrowed:
- Growth Momentum Comparison
Compared to the Eurozone's projected 0.9% growth, the US's 2.3% growth highlights resilience. However, China's 5% growth and India's 7% catch-up momentum shift the balance of power. The US dollar index fell from 105.5 to a projected value of 102, reflecting a weakening of currency hegemony.
- Supply Chain Restructuring Costs
The average cost of reshoring overseas factories for multinational corporations has increased by 18%, and tariffs on Mexico and Canada have reduced North American supply chain efficiency by 12%. Semiconductor equipment delivery cycles have lengthened to 18 months, four months longer than in 2020.
- Geopolitical Premium
In an election year, the policy uncertainty index rose to 158 (with a historical average of 100). Restrictions on US-China technology investment have expanded to include quantum computing and biotechnology, and diverging technical standards have increased corporate compliance costs by 7%.
Conclusion
The US economy in 2025 is at a critical juncture in an "atypical cycle." Consumption resilience, technological breakthroughs, and policy stimulus form the three pillars of growth, but undercurrents such as labor imbalances, industrial fault lines, and geopolitical risks are eroding these foundations. To achieve sustainable development, breakthroughs are needed in the following areas:
- Reconstructing the innovation ecosystem: Increase the proportion of basic research investment from 16% to 25%, and establish a collaborative mechanism among government, enterprises, and universities.
- Income distribution reform: Optimize redistribution through digital taxes and capital gains taxes, reducing the Gini coefficient from 0.49 to 0.45.
- Upgrading global governance: Lead the formulation of new rules such as AI ethics and carbon tariffs, and reshape institutional power.
In this era of simultaneous technological revolution and restructuring of order, whether the US economy can escape the "middle power trap" depends not only on short-term policy choices but also on a deeper transformation of its civilizational form.