What does 2025 hold? The Financial Times’ seasoned journalists share their predictions, analysing trends that will drive markets, shape policy, and transform society in the months to come.
Trade & economics
Q: Will Donald Trump start a full-scale tariff war?
A: Likely, yes. Trump is expected to implement at least 10 per cent tariffs on at least half of US imports by year-end. China will definitely be hit with tariffs, affecting about 15 per cent of US total imports. Mexico and Canada (30 per cent of imports) may avoid the threatened 25 per cent tariffs if their leaders demonstrate toughness on immigration. While some trading partners will successfully negotiate, Trump is likely to maintain most tariffs through December.
Q: Will US interest rates end the year lower than now?
A: No. Despite market predictions of a fed funds rate at 3.9 per cent by December 2025, this is too optimistic. Trump’s policies (tax cuts, tariffs, deportations) will increase inflationary pressure. The Federal Reserve will remain cautious unless the stock market collapses, while the ECB and Bank of England will continue cutting rates.
Q: Will Chinese export prices fall further?
A: Yes. China’s export price index, which was down 5.2 per cent year-on-year in October 2024, could fall as much as 10 per per cent in some months of 2025. This will challenge companies competing with Chinese rivals and help Beijing offset any US tariff increases.
Q: Will the bond market buckle?
A: No. While investors are concerned about Trump’s relaxed stance on borrowing and tax cuts, a disorderly loss of confidence in Treasuries is unlikely given how disastrous it would be for US markets.
Politics & international relations
Q: Will there be a peace deal between Ukraine and Russia?
A: Yes. The US president will need to threaten tougher sanctions and increase support to Ukraine to bring Moscow to serious talks. Ukraine will likely accept de facto but not de jure Russian control of currently occupied territories, with some land swaps, in exchange for European security guarantees.
Q: Will Emmanuel Macron survive as French president?
A: Yes, but his position is weakened following lost snap elections, a hung parliament, four prime ministers in a year, and challenges from both far-right and far-left opponents.
Q: Will Germany relax its debt brake?
A: Yes. The constitutional limit on government borrowing will likely be eased due to massive spending needs and a stagnating economy, regardless of which coalition forms after February’s elections.
Q: Will Britain’s Labour government stick to its promise not to raise taxes further?
A: Yes, for now. However, this commitment may become difficult to maintain given squeezed state finances and public services.
Q: Will the war in Sudan continue?
A: Yes. The conflict has become a proxy war involving international powers, with too many actors profiting from its continuation and insufficient international pressure to end it.
Technology & markets
Q: Will the Magnificent Seven take a fall?
A: No, but their growth will be limited. While Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla will maintain their strength, factors like explosive capex, AI hype, and high valuations will constrain further expansion.
Q: Will Elon Musk and Donald Trump fall out?
A: No. The benefits for Musk of maintaining good relations with the president are too valuable, particularly given how his net worth has already increased by about two-thirds on expectations of deregulation.
Q: Will we have AI agents we can use?
A: Yes. “Agentic AI” will be widely hyped, with companies like Google, OpenAI, Anthropic, and Microsoft offering AI assistants that can complete digital tasks on users’ behalf.
Environment & energy
Q: Will China’s carbon emissions fall?
A: No. While emissions may be peaking ahead of the 2030 pledge, President Xi’s economic stimulus efforts in 2025 are likely to offset progress in solar, EVs, and batteries as energy demand rebounds.
Q: Will electric vehicles make up more than a quarter of global auto sales?
A: No. The figure will likely be around 22 per cent due to waning consumer enthusiasm outside China, though carmakers will continue launching new models and offering discounts to meet emissions rules.
Global finance & markets
Q: Will Bitcoin hit $200,000?
A: Yes. With the Trump administration’s pro-crypto stance and expected friendlier SEC regulations, institutional money will likely flow into crypto without fear of lawsuits.
Q: Will India’s GDP overtake Japan’s?
A: No, not yet. Japan will likely end 2025 with an economy 4.7 per cent larger than India’s, with the “sorpasso” – India overtaking Japan — more likely in 2026.
Media & entertainment
Q: Will there be another big Hollywood studio deal?
A: Yes. Warner Bros Discovery is likely to be sold, possibly to the upcoming Comcast cable TV business spin-off or to private equity, following Paramount’s sale to Larry Ellison.
Q: Will CDs begin a long-term revival similar to vinyl?
A: No. While CD sales are being boosted by K-pop marketing tactics, this doesn’t represent a true format revival like vinyl has experienced.