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The United States ended 2024 with robust economic momentum-real GDP grew 2.8%, underpinned by strong consumer demand and a resilient labor market. Yet, the November election ushered in profound policy change. The Trump administration’s return brought a rapid deregulatory push and a sharp pivot in trade and climate policy, with immediate consequences for business confidence and global markets.
Over 100 executive orders were issued in the administration’s first hundred days, targeting climate, financial and ESG regulations for rollback. The SEC’s climate disclosure rule was withdrawn and the EPA’s authority was curtailed. The administration also challenged state-level climate policies, raising the prospect of a fragmented compliance landscape. The independence of the Federal Reserve and other agencies came under scrutiny, with threats to remove key officials and assert greater executive control.
Trade policy became a source of volatility. Sweeping new tariffs on Chinese, Mexican and EU imports were announced, triggering stockpiling, supply chain disruptions, and the risk of global retaliation. Inflation, which had moderated through much of 2024, began to climb again, with S&P Global forecasting 3% for 2025 as tariffs feed through to consumer prices.
While headline growth remained strong, the final quarter of 2024 saw consumer sentiment begin to waver. Rising prices-driven by new tariffs and supply chain disruptions-prompted households to become more cautious in their spending. Retailers and manufacturers responded by stockpiling goods and adjusting inventories, anticipating further cost pressures and potential shortages.
The labor market continued to show resilience, with steady job creation in healthcare, logistics, and services. However, hiring slowed in manufacturing and retail as businesses navigated higher input costs and shifting trade policies. The Federal Reserve maintained a cautious approach, holding rates steady in the face of persistent inflation and growing policy uncertainty. As a result, both businesses and consumers entered 2025 preparing for a more volatile and unpredictable economic landscape.
The outlook for 2025 is one of slower growth and heightened uncertainty. S&P Global and the Congressional Budget Office both forecast GDP growth below 2%, with risks tilted to the downside as tariffs and regulatory volatility weigh on investment and trade. Unemployment is expected to rise modestly, while inflation remains above the Fed’s 2% target.
Regulatory Policy: The administration will continue its deregulatory agenda, targeting federal climate and financial rules while challenging state-level initiatives. The risk of legal challenges and a patchwork compliance environment is high. The independence of financial regulators and the Federal Reserve will remain in the spotlight, with potential implications for monetary policy and market stability.
Trade and Geopolitics: The tariff regime is likely to persist, raising costs for businesses and consumers and increasing the risk of global retaliation. The expiry of the EU’s suspension of retaliatory tariffs in March 2025 could spark renewed transatlantic trade friction. The administration’s foreign policy will be more transactional, affecting global supply chains and investment flows.
Monetary Policy: The Fed is expected to cut rates only once in 2025, maintaining a cautious stance amid inflationary risks and political pressure.
The principal risks are policy-driven: regulatory and trade uncertainty, potential erosion of institutional independence and the prospect of retaliatory measures from key partners. However, there are opportunities for businesses that can adapt to a more fragmented regulatory environment, leverage domestic supply chains and capitalize on deregulatory tailwinds in energy and traditional sectors.
2025 will be a year of vigilance and adaptability. Companies should invest in scenario planning, compliance agility, and regulatory engagement to navigate a turbulent policy landscape and position themselves for resilience in the face of ongoing economic and geopolitical flux.
Europe concluded 2024 in a climate of cautious optimism, underpinned by regulatory acceleration but tempered by modest economic growth and persistent geopolitical uncertainty. Real GDP growth for the EU was 0.9% and 0.8% for the euro area, reflecting a subdued rebound from prior stagnation. Inflation moderated sharply-falling to 2.6% in the EU and 2.4% in the euro area-yet higher interest rates, energy costs, and ongoing conflicts on Europe’s borders continued to weigh on sentiment and investment.
The year was defined by the rollout of ambitious regulatory frameworks. The Digital Services Act and Digital Markets Act came into force, reshaping compliance for technology, media, and e-commerce. The EU finalized the world’s first comprehensive Artificial Intelligence Act, setting a global precedent for AI governance. In financial services, the Basel III package was adopted, introducing stricter capital and disclosure requirements from January 2025.
Sustainability and ESG remained central. The Corporate Sustainability Reporting Directive and Sustainable Finance Disclosure Regulation expanded non-financial reporting, while the phased introduction of the Carbon Border Adjustment Mechanism began to impact energy-intensive importers and supply chains. The new EU Anti-Money Laundering Authority was established, promising more consistent enforcement across member states.
Geopolitically, Europe’s external environment remained volatile. Russia’s ongoing war in Ukraine, intensifying conflict in the Middle East, and the return of a transactional U.S. administration contributed to heightened uncertainty. European Parliament elections saw mainstream parties retain control, but nationalist and populist groups gained ground, signaling a more fragmented policy debate for 2025.
Despite these headwinds, Europe’s labor market proved resilient, with unemployment falling to 6.1% in the EU and 6.5% in the euro area. The IT and financial sectors faced acute talent shortages and compliance burdens, while small businesses contended with rising costs and a patchwork of national regulations.
The outlook for 2025 is one of cautious recovery and continued regulatory acceleration. Modest economic growth is expected, but businesses will need to navigate an increasingly complex policy environment and heightened geopolitical risk.
Regulatory Expansion: The European Commission’s new mandate will drive further implementation of the Artificial Intelligence Act, stricter ESG disclosure standards, and expanded oversight from the new Anti-Money Laundering Authority. Companies must prepare for a demanding compliance agenda across digital, financial, and sustainability domains.
Political Fragmentation: Mainstream coalitions remain in control, but populist and nationalist parties are poised to exert greater influence over policy debates-particularly in areas such as migration, trade, and digital sovereignty. This will likely result in more unpredictable and fragmented policymaking at both the EU and national levels.
Geopolitical Resilience: The region faces ongoing external pressures, including the risk of renewed transatlantic trade tensions and continued instability on its borders. Europe’s ability to maintain unity and adapt its economic and security strategies will be tested throughout the year.
The principal risks for 2025 stem from regulatory complexity, political polarization, and external shocks. Businesses face the challenge of adapting to an evolving compliance landscape, fragmented policy responses, and potential supply chain disruptions. However, opportunities exist for organizations that can proactively engage with regulators, invest in compliance infrastructure, and build resilience into their operations. Those able to anticipate policy shifts and collaborate effectively with stakeholders will be best positioned to thrive in Europe’s dynamic environment.
2025 will reward vigilance, adaptability, and strategic engagement. Companies should prioritize scenario planning, regulatory intelligence, and stakeholder outreach to navigate a shifting European landscape and secure sustainable growth amid ongoing uncertainty.
Latin America closed 2024 with a cautiously positive outlook, balancing modest economic growth, regulatory innovation, and persistent political and security challenges. Regional GDP growth reached 2.4%, slightly outperforming earlier forecasts, while inflation continued to decline from post-pandemic highs. Unemployment remained at historic lows, and several countries-including Brazil and Peru-posted stronger-than-expected results. However, the region’s long-standing “low growth trap” persisted, with structural weaknesses in productivity, infrastructure, and fiscal capacity holding back more dynamic expansion.
The year was marked by significant political continuity and a handful of historic milestones. Claudia Sheinbaum’s election as Mexico’s first female president reinforced political stability, while Brazil’s leadership of the G20 and Peru’s hosting of the APEC Summit underscored Latin America’s growing role on the global stage. At the same time, Venezuela’s disputed elections and the growing influence of transnational criminal organizations highlighted the region’s ongoing governance and security risks.
Regulatory progress was notable, particularly in Brazil, where new chemical safety legislation and advances in health sector oversight reflected a broader regional trend toward regulatory convergence and modernization. Across Latin America, agencies prioritized harmonization with global standards, streamlined approval processes, and enhanced safety monitoring-though uneven implementation and resource constraints remain challenges.
Geopolitically, China deepened its economic footprint, with Colombia joining the Belt and Road Initiative and Chinese investment rising across energy, infrastructure, and technology sectors. Meanwhile, the region faced external headwinds from a more transactional U.S. administration, trade policy uncertainty, and the ongoing need to build climate and disaster resilience.
The outlook for 2025 is one of steady, if unspectacular, progress. Regional GDP growth is projected at 2.5%, with inflation expected to remain near target ranges as central banks cautiously ease monetary policy. However, external risks, political volatility, and persistent structural challenges will continue to shape the business environment.
Regulatory Modernization: Countries across Latin America are accelerating efforts to harmonize with international standards, particularly in chemicals management, health, and financial services. Brazil’s new chemical safety law and the region-wide push for better pharmacovigilance and technovigilance signal a more robust, transparent regulatory environment. Companies should anticipate ongoing reforms and invest in compliance agility.
Political and Security Dynamics: While political continuity prevails in key economies, governance risks remain, especially in Venezuela and parts of Central America. The influence of organized crime and the potential for social unrest continue to pose operational challenges. Businesses must monitor local developments and prioritize robust risk management strategies.
External Pressures and Opportunities: The region’s economic prospects are closely tied to global trends, including US and Chinese demand, commodity prices, and shifting trade policies. Nearshoring and supply chain diversification present new opportunities, but heightened trade tensions and currency volatility could dampen growth. Climate resilience and sustainable investment will be critical themes as governments seek to attract capital and mitigate disaster risks.
Latin America enters 2025 with a cautiously optimistic trajectory, but downside risks persist. Policy uncertainty, external shocks, and security concerns could disrupt growth and investment plans. However, organizations that engage proactively with regulators, invest in compliance and resilience, and leverage the region’s evolving trade and investment landscape will find opportunities for sustainable expansion. Enhanced regulatory convergence, digital innovation, and climate adaptation are likely to define the winners in the year ahead.
2025 will reward adaptability, local insight, and strategic engagement. Companies should invest in scenario planning, risk management, and stakeholder relations to navigate Latin America’s shifting policy, security, and economic landscape-and to position themselves for growth as the region continues its gradual transformation.
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