BIS Warns Trump Trade Policies Could Reignite US Inflation, Global Economy Vulnerable

The Bank for International Settlements (BIS) has flagged former President Donald Trump's trade policies as a potential catalyst for resurgent US inflation. In its annual report, the BIS highlighted how tariffs imposed during Trump's administration disrupted economic stability, creating a period of heightened uncertainty. While markets have partially recovered since the 90-day suspension of these measures, the underlying risks persist.

Agustin Carstens, BIS General Manager, noted that the global economy is entering a critical phase marked by slowing growth potential and mounting threats to price stability. "We were on track for a soft landing until volatility spiked," Carstens said, emphasizing how tariffs complicated inflation convergence toward 2% targets.

Structural challenges—including climate change, geopolitical tensions, aging populations, and supply chain fragility—are compounding these vulnerabilities. Post-pandemic inflation surges have also distorted public perceptions of price movements, while elevated debt levels further strain fiscal health.