US Tariffs Expected to Impact GDP, Manufacturing Activity

Recent analyses reveal that tariffs imposed by the Trump administration could significantly impact the U.S. economy, leading to a projected contraction of real GDP by as much as 0.9 percentage points in 2025. The Institute for Supply Management reported that U.S. manufacturing activity fell into contraction in March for the first time in 2025, driven by uncertainty surrounding the new tariffs and a decline in new orders and employment. Prices for factory goods have surged due to these tariffs, marking the highest increase since June 2022. The contraction reflects broader economic headwinds, with manufacturers reducing output and staffing in response to weakening demand. The implications of these tariffs extend internationally, with countries like Thailand also facing potential GDP reductions due to their export exposure to the U.S. economy. Overall, the manufacturing sector's outlook has shifted from optimism to caution as companies grapple with rising costs and demand confusion.