Global Slowdown Ahead? Tariffs May Tip the World Into Stagflation
Nick from CoinBureau lays out a deep dive on why the global economy is walking a tightrope — and why stagflation may be closer than most realize. With Trump’s sweeping tariffs now active, the risk of a 1970s-style economic trap is growing fast.
🔍 What Is Stagflation, and Why Should You Care?
-
It’s the worst of all worlds: high inflation, high unemployment, and low growth.
-
The usual central bank tools (raising or cutting rates) don’t work well — they only fix one problem by making another worse.
-
Historically rare, but when it hits (like in the 1970s), it can paralyze economies for years.
⚠️ What’s Driving the Fear Now?
-
Trump’s base 10% tariff on global goods hasn’t been rolled back. US–China tariffs are now up to 125% on some items.
-
Inflation expectations just hit 6.7%, the highest since 1981.
-
Manufacturers are warning of rising input costs and production delays — especially due to Chinese rare earth metal embargoes.
-
Moody’s projects US unemployment could reach 7.5% if tariffs stay through 2026.
-
JP Morgan expects GDP growth to stall out entirely. Larry Fink says a recession is likely already underway.
🔮 CoinBureau’s Outlook:
-
The economic impact hinges on how long the tariffs stay in place. Tariffs can vanish quickly — but Trump’s unpredictability makes that uncertain.
-
Even if stagflation takes hold, the scale won’t match the 1970s unless we see a second major shock.
-
Policymakers today are quicker to act than they were in the past — but the longer this drags on, the worse the fallout.
Nick’s Bottom Line: Tariffs have set the stage for a serious slowdown. If the trade war escalates, expect worsening inflation and falling output. The only bright side? A fast policy reversal could defuse the crisis — but don’t count on it happening soon.
