In a forward-looking reading of the future of the global economy, Bank of America CEO Brian Moynihan predicted that US trade policy would undergo a radical shift towards de-escalation rather than escalation during the coming year, 2026. This prediction comes after 2025, which experts described as a year of widespread disruptions in the US economy as a result of the imposition of extensive tariffs that affected global supply chains.
Indicators of reduced trade tensions
In a recent television interview, Moynihan explained that the bank, which possesses a vast database on consumer and business spending, sees clear signs of a de-escalation in trade tensions. He indicated that the most likely scenario is for average tariffs to stabilize at around 15%, a level that markets can absorb compared to previous sharp fluctuations. He added that higher tariffs would be imposed only on countries that fail to increase their purchases from the United States, suggesting a "managed trade" approach rather than an open trade war.
From escalation to stability
Moynihan asserted that the shift from a general tariff of 10% to 15% on most trading partners would not have the significant negative impact some feared, viewing it as the beginning of a "de-escalation" phase. This comes within a broader economic context, where the US administration typically seeks, after periods of trade tension, to consolidate economic gains and open new channels of negotiation to ensure continued growth without triggering stagflation.
Challenges of the labor market and small businesses
In a related context, regarding domestic challenges, the CEO of Bank of America pointed out that small businesses were particularly hard hit during the second quarter of this year. However, the irony lies in the fact that the damage wasn't solely due to tariffs; the greatest concern now stems from labor shortages and the uncertainty surrounding immigration policies. This point is crucial to understanding the US economy, as the service and construction sectors are suffering from a labor gap, which is putting downward pressure on wages and increasing operating costs, independent of foreign trade policies.
The economic importance of forecasts
Moynihan's remarks carry particular weight given Bank of America's position as one of the largest lenders in the United States, making its forecasts a compass for investors. A move toward easing in 2026 could mean more stable prices for imported goods and a reduction in the inflationary pressures that have recently plagued American and global consumers, paving the way for a more predictable investment environment.
