Trump’s tariff turmoil yet to significantly dent growth in emerging economies, despite raising trade tensions

The European Bank for Reconstruction and Development (EBRD) released a report stating that the trade policies of the Trump administration have not dented growth as much as feared, in spite of growing concerns in emerging economies. Growth in the 40 countries covered by the development finance institution rose by a larger-than-forecast 3.4%.

The bank has issued warnings that continued trade turmoil could derail growth in some economies. It now expects 3.6% growth this year and 3.7% in 2027. Interestingly, exports from some EBRD countries to the United States even grew, specifically those driven by the AI boom.

According to the EBRD, Hungary, the Czech Republic and Poland all export AI-related products-such as servers, processors and computing systems - meaning they could benefit from this trade shift.

On the other hand, Javorick warned that the full impact of the tariffs remains unclear, most of the trade tracked by the report arrived in the US before the duties took effect. Uncertainty continues to rise following the US Supreme Court ruling that Trump had exceeded his authority in imposing the initial tariffs.

The turbulence forces policymakers to focus on urgent tasks, draining their ability to tackle complex, long-term problems that affect standards of living. Consequently, many investors believe that uncertainty persists will dampen private investment, underscoring the vital role of public investment.