President Donald Trump's tariffs could steer the US economy toward a storm. According to analysts at Citi, the impact of the US administration's sweeping tariffs on economic growth is just beginning to be seen, and the worst may be yet to come. Experts warn that Trump's trade measures are slowing global economic activity.

Despite repeated warnings that President Trump's tariffs, whether immediate or delayed, would harm industrial output, the global economy has so far shown "remarkable resilience," Citi notes.

The White House initially announced tariff hikes targeting both allies and adversaries. Later, the administration temporarily suspended some of these measures to allow time for trade talks with several nations. China received a separate delay and partial tariff relief.

Currently, a universal 10% tariff remains in effect, along with duties on select products such as aluminum, steel, and auto parts. Experts estimate that the effective US tariff rate is now at its highest level since the 1930s.

According to Citi analysts, American businesses and consumers rushed to stock up on goods ahead of the tariff implementation, creating a temporary cushion against an immediate economic downturn.

However, the full effects of the tariffs are expected to set in over the coming months. Consumer demand could suffer a double hit: first, from shrinking purchasing power, and second, from the fallout of the pre-tariff buying frenzy. On this basis, Citi foresees a storm brewing for the economy, calling the current phase a lull before the storm. Their negative outlook targets the second half of 2025.

Citi forecasts that global growth will slow to 2.3% this year, down from 2.8% in 2024. Advanced economies may be particularly vulnerable, with growth potentially falling to just 1%.