How does trade war affect global investment in 2025?

A recent study prepared by the Oxford Economics Corporation warned that the escalation of uncertainty over global trade will have a significant negative impact on economic growth, expecting this to reduce trade investments in the European Union and the United Kingdom by 2% during the year 2025, according to the Euronews.
Decreased in investment plans due to the escalation of tensions
The study stated that companies in various major economies, including the European Union, tend to reduce their investment plans as a result of increasing fog over commercial policies, especially in light of the ongoing escalation by the administration of US President Donald Trump, which contributed to igniting a wider trade war that affects the imports of states.
Also read: European Central: Trump makes the economic climate more turbulent
Huge costs on the global economy
According to the report, instability in commercial policy is expected to pay the global economy high costs, which are primarily due to the decline in investment levels, which is a major engine for growth in both advanced and emerging economies.
Four scenarios for the future of the global economy
The report dealt with four different scenarios to measure the impact of the continuation of the state of commercial uncertainty on investments, and thus on the general performance of the global economy.
Big Economist Michael Sonders and economist Dr. Daniel Harringg said that investment recorded a remarkable decline in 2025, noting a 4% decrease in the United States and China, and about 2% in the euro and the United Kingdom.
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In 2023, the contribution of commercial investment to GDP reached about 22% in China, 15% in the United States, 12% in the eurozone, and 10% in the United Kingdom, according to the report data.
The study expected that this decline will lead to a significant effect – albeit disastrous – on the growth of GDP in those countries.
Trade and customs tariffs
The report pointed out that the state of uncertainty is exacerbated by the rise in customs tariffs, which may contribute to slowing the pace of economic growth and raising the levels of inflation globally.
In a new escalation of commercial tension, US President Donald Trump suggested imposing 200% customs duties on some European Union imports, while the European Commission announced its willingness to take counter -measures that include American goods valued at 26 billion euros.
In the same context, the White House is closely monitoring the application of European Union laws for digital competition, and the United States may respond if fines are imposed on major American technological companies such as “Apple” or “dead”.
Why is the ingredient of corporate investments obstructing?
According to a previous study of “Oxford Economics”, commercial fog may only reduce the gross domestic product of the euro area by 0.2% over the next 12 months, as a result of its direct impact on the volume of investments.
The study concluded that the most open and most influential countries will be the most affected, such as Luxembourg, Slovakia and Bulgaria, where the gross domestic product may record a decrease between 0.8% and 1% within two years.
As for the major European economies, the study stated that Belgium and Italy will be among the countries most affected by this situation.