05 JUNE 2025
The global economy looks like it’s just been hit by a mini-pandemic.
The chart below shows the Philadelphia Fed New Orders index; a monthly survey of manufacturing activity in the Mid-Atlantic region. It offers early insights into broader US growth trends and global trade momentum.
It fell sharply in April in the immediate aftermath of the “Liberation Day” tariffs, but has rebounded strongly since.
In general, such volatility is not good for the economy; businesses find it hard to plan and commit resource against a backdrop of such extreme uncertainty.
However, the recent pandemic experience should help firms to navigate the trade war.
As the chart below shows, it was only five years ago when a similar, more pronounced trend was taking place with the sudden lockdown of the global economy making way for a V-shaped recovery as supply chains reopened.
Management teams will be drawing on the pandemic experience to shape their response to President Trump’s tariff flip-flopping.
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