A seismic shift in U.S. trade policy has added to the uncertainty that has roiled markets and raised the specter of a global economic slowdown. To help understand the potential effects, S&P Global has updated its macro view, including GDP growth and inflation forecasts and chances of a recession.

"The jump in U.S. import tariffs, trading partner retaliation, ongoing concessions, and subsequent market turbulence constitute a shock to the system centered on confidence and market prices. The real economy is sure to follow, but by how much?," said S&P Global Ratings Global Chief Economist Paul Gruenwald.

S&P Global has again lowered its GDP growth forecasts for most countries and raised its inflation forecast for the U.S. While there are increased risks to the downside across all regions and S&P does anticipate a material slowdown in growth, the organization does not foresee a U.S. recession at this juncture.

S&P Global's new forecasts are outlined in its report published May 1, "Global Macro Update: Seismic Shift In U.S. Trade Policy Will Slow World Growth."

"The risks to our baseline remain firmly on the downside in the form of a stronger-than-anticipated spillover from the tariff shock to the real economy. The longer-term configuration of the global economy, including the role of the U.S., is also less certain," said Gruenwald.

Global growth is 0.3 percentage points lower in 2025 and 2026 relative to our previous forecast round, and all regions are affected negatively. Relative to our previous forecast round:

• U.S. GDP growth falls by about 60 basis points (bps) over 2025-2026, while Canada's and Mexico's GDP growth falls by a similar amount.

• Eurozone GDP growth is about 0.2 percentage points lower over the next two years, with Germany taking the biggest hit among the major economies.

• In Asia-Pacific's major economies, China sees growth drop by 0.7 percentage points in 2025-2026, while Japan and India see a reduction of 0.2-0.4 percentage points.

• In emerging markets (EM), more open Asia-Pacific economies (such as Malaysia, Vietnam, Thailand, and Singapore) see the biggest decline in GDP growth, falling by 0.5-1.0 percentage points per year.

This report does not constitute a rating action.

The report is available to RatingsDirect subscribers at www.capitaliq.com.