The "World Economic Trends 2025 I - Global Economic Developments in Response to US Trade Policy" released by the Cabinet Office in August 2025 is a comprehensive analytical report on the global economy in the first half of 2025. This report provides detailed analysis of how US trade policies impact regional economies amid increasingly complex international economic conditions.
Chapter 1 analyzes global economic trends in the first half of 2025 by region, examining US economic conditions, structural changes in the Chinese economy, and the economic situation in Europe (Eurozone and UK). For the US economy, the analysis focuses on the monetary policy normalization process, labor market developments, and inflation control effects to assess the potential for sustained growth trajectory. Regarding China, the report analyzes the adjustment in the real estate market, progress in consumption recovery, and the turning point in growth models accompanying manufacturing advancement, examining spillover effects on the global economy. For the European economy, it provides detailed evaluation of how energy price stabilization and monetary policy adjustments affect economic recovery.
Chapter 2 focuses on analyzing US trade and investment structure, providing multifaceted verification of structural changes in goods trade and the effectiveness of trade policies. Particularly, it offers quantitative analysis of changes in US-China trade relations, geopolitical risks in supply chains, and economic effects of bilateral and multilateral trade agreements. The report notes that changes in services trade and income-investment structures create new economic dynamics difficult to explain with traditional trade theory due to digital economy expansion and financial services internationalization.
Throughout the report, key risk factors and outlook for the global economy include continued geopolitical tensions, accelerated climate response investments, and structural changes in labor markets due to demographic shifts, which are positioned as important policy challenges. These analyses provide significant policy implications for formulating Japan's medium to long-term growth strategies, offering insights rich in suggestions for achieving both enhanced international competitiveness and sustainable economic development.