The Great Non-Crisis of 2025: A Global Sigh of Relief
The dawn of 2025 was shadowed by deep anxiety for the global economy, with India bracing for significant impact. A second Donald Trump presidency in the United States had sparked fears of an all-out global trade war, with predictions of crashing stock markets and widespread recession. Yet, as the year unfolded, the anticipated cataclysm simply failed to arrive. The question on everyone's mind is: why did the feared economic meltdown not happen?
Trump's Negotiating Tactics: More Bluster Than Bite
A key reason the crisis was averted lies in the shifting perception of presidential statements. Historically, announcements from the US president were viewed as firm policy commitments. The year 2025 marked a decisive change in this narrative. Donald Trump, known for his dramatic pronouncements, would announce sweeping trade measures, only to subsequently delay, significantly dilute, or withdraw them entirely. This pattern became so predictable that Wall Street traders coined a new acronym for it: TACO, standing for 'Trump Always Chickens Out'.
This behaviour led global markets and governments to view him less as a traditional statesman and more as a shrewd businessman. Analysts noted he was effectively opening negotiations with an outrageously high initial asking price, fully expecting to settle for a much more moderate deal. This understanding prevented the panic that similar announcements might have caused in earlier years.
Implications for India and the Global Economic Landscape
For India, which had been poised for potential economic turbulence, this development provided crucial breathing room. The absence of a full-blown trade war meant that export sectors and financial markets could stabilise without the shock of sudden, severe tariffs. The global economy, while facing other challenges, dodged the bullet of a recession triggered primarily by protectionist policies. The experience of 2025 serves as a lesson in geopolitical and economic analysis, highlighting that loud rhetoric does not always translate into immediate, disruptive action.
As noted by commentator Swaminathan Anklesaria Aiyar in his December 27, 2025 analysis, the year ultimately proved far less 'tariffying' than initially forecast. The world learned to decode the difference between negotiation posturing and executable policy, a distinction that helped avert a major downturn.
