The Financial Times has compiled predictions on the world's key issues for the new year, ranging from the possibility of a Russia-Ukraine ceasefire and the path of US interest rates to the "friendship" between Trump and Musk...

On the last day of 2024, the Financial Times gathered opinions from over a dozen contributors to make predictions on global focus issues for 2025. These include conflicts in Ukraine, the Middle East, and Sudan, as well as another type of war—the "tariff war." Hot topics such as US interest rates, the "Magnificent Seven" US stocks, and Bitcoin were also discussed.

Will Trump Launch a Full-Scale "Tariff War"?

In short, yes—but it's not a done deal. By "tariff war," we assume that by the end of this year, the US will impose tariffs of at least 10% on at least half of its imports. No one truly understands Trump's plans. China accounts for about 15% of total US imports, while Mexico and Canada together make up around 30%. The leaders of the latter two countries—Claudia Sheinbaum and Justin Trudeau (or their successors)—will maintain a tough stance on immigration to avoid Trump's threat of 25% tariffs.

Other trade partners will also make concessions and promise retaliation. Over time, some will succeed, but Trump may become too immersed in the power and revenue from the "tariff war" to remove most tariffs by December.

— Alan Beattie

Will There Be a Peace Deal Between Ukraine and Russia?

Yes. But the US president will have to threaten harsher sanctions and increase support for Kyiv to convince Moscow to engage seriously in negotiations. US allies will persuade Trump not to exclude Ukraine's NATO membership from the negotiating table, at least initially.

Ukrainian President Zelensky will agree to de facto (though not legal) control over the territories currently held, with some land swaps in exchange for European security guarantees and US support. Ukraine's NATO membership will ultimately be shelved. Russian President Putin will doubt Europe's resolve, believing it will eventually waver.

— Ben Hall

Will US Interest Rates Be Lower by the End of the Year?

No. Following the Federal Reserve's December meeting under Powell's leadership, the latest economic projections suggest the federal funds rate will be 3.9% by December 2025. If so, this would be more than 25 basis points below the 4.25-4.5% target range in December 2024.

Even so, the market may be too optimistic. Trump's tax cuts, tariffs, and deportation policies will add inflationary pressure to an already stubborn economy.

The Fed will have to tread carefully. Unless the stock market crashes (which is conceivable), this will be the case. Meanwhile, the European Central Bank and the Bank of England will continue to cut rates, further widening policy divergence.

— Martin Wolf

Can Macron Continue as French President?

Yes. But the fact that this question is being asked shows that the man once compared to Jupiter (the Roman king of the gods) for his top-down style has seen his stature weakened. With about 30 months left in his second term, Macron is reeling from his camp's failed decision to call early elections this summer.

After Macron's "political gamble" to call early parliamentary elections, voters elected a "hung parliament" unable to pass a budget. France has had four prime ministers in a year, and Macron's signature economic achievements are eroding.

All of this has emboldened his long-time far-right rival Marine Le Pen and far-left figures, who are calling for his resignation to break the deadlock. Macron insists he will never do so.

— Leila Abboud

Will the "Magnificent Seven" US Stocks Fall?

No, but they won't climb higher either. The rise of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla reflects the vitality of the US private sector, Silicon Valley's leadership in digital technology, and investor hype around AI. These factors will remain strong in 2025. In fact, the incoming US administration signals a takeover of a stagnant political world by a vibrant private sector led by tech.

But three warnings will limit further expansion of these tech giants. First, explosive growth in capital expenditure could erode profitability. Second, investor hype around AI is so frenzied that disappointment seems inevitable. Third, sky-high valuations have already prompted some investors to seek alternatives like smaller tech companies.

In the long run, even AI cannot escape the law of gravity in financial markets—reversion to the mean. High-flying stock prices will come down, allowing lower-tier stocks to rise.

— Gillian Tett

Will Musk and Trump Fall Out?

No. For Musk, the benefits of aligning with the president are too great to waste. Even before Trump took office, Musk's net worth surged by about two-thirds on expectations that deregulation would boost Tesla, SpaceX, Neuralink, and his other companies.

Musk is expected to remain in his role at least until July 4, 2026, when the "Department of Efficiency" he co-leads with Vivek Ramaswamy will complete its goals.

— Edward Luce

Will Germany Relax Its "Debt Brake"?

Yes. As Germany grapples with massive spending needs (especially in defense) and economic stagnation, calls to relax its "debt brake" (Schuldenbremse) policy are growing louder. This fiscal mechanism limits government borrowing to no more than 0.35% of GDP in any given year.

A key reason for the collapse of Olaf Scholz's coalition government, the "debt brake" has become a central campaign issue ahead of February's elections. Friedrich Merz, the CDU candidate whose party leads in polls, will have to agree to some form of relaxation in any coalition agreement, whether with the Social Democrats or the Greens—both staunch critics of the policy.

— Anne-Sylvaine Chassany

Will the US Bond Market Collapse?

No. The bond market may experience turbulence, but it won't collapse entirely. Investors are on high alert for any signs, as Trump's relaxed stance on borrowing and push for tax cuts in an era of already high debt levels could lead to a "Truss moment" in the US government bond market.

Given the potential for inflation triggered by tariffs and immigration policies, this isn't impossible. But a disorderly loss of confidence in US Treasuries would be catastrophic for US markets, including stocks, so a resurgent Trump is unlikely to take such a risk.

— Katie Martin

Will the UK Labour Government Stick to Its No-Further-Tax-Increases Promise?

Yes, for now. But in reality, this is an unstable promise. Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer himself proposed £40 billion in tax hikes (mainly targeting businesses) in October's budget. Given fiscal and public service constraints, the promise of no further tax increases will be hard to keep.

— Miranda Green

Will Israel and the US Strike Iran's Nuclear Facilities?

No. But Israel will be very interested. Israeli Prime Minister Benjamin Netanyahu has long vowed to prevent Tehran from developing nuclear weapons. Israel, emboldened after a year of regional conflict, sees Iran weakened. However, Israel may need US support—and its green light—to destroy Iran's nuclear facilities, and the incoming US president, though unpredictable, will tread carefully to avoid triggering the next war in the region.

However, if Tehran moves closer to building a bomb, this calculus could change. One key lesson from 2024 in the Middle East is that nothing can be ignored.

— Andrew England

Will Bitcoin Reach $200,000?

Yes. Bitcoin only broke $100,000 in December last year, so doubling again seems a stretch—but why not? Trump's team has wholeheartedly embraced cryptocurrencies, with digital asset advocates holding top positions in Washington, driving Bitcoin to record highs after the US election.

Under friendlier leadership, the SEC is expected to end aggressive lawsuits against crypto firms and establish rules making Wall Street banks and asset managers more willing to trade and hold cryptocurrencies. Inflows of institutional money, coupled with reduced litigation fears, will only push Bitcoin higher.

— Nikou Asgari

Will India's GDP Surpass Japan's?

No. While this will happen soon (it's already true in purchasing power parity terms), it's more likely in 2026 than 2025. According to the IMF, Japan's overall economy will grow by 4.7% by the end of next year, while India's growth has slowed in recent quarters, requiring more time to overtake Japan.

Exchange rates could play a role, but the yen is already weak, and the rupee is strong, so the odds are slim.

— Robin Harding

Will Electric Vehicles Make Up Over 25% of Global Car Sales?

No. If recent trends continue, this is possible, but the actual figure will likely be just over 22%. With waning enthusiasm for EVs outside China, 2025 will be another tough year for the industry. But to meet Europe's stricter emissions regulations and the UK's EV sales targets, automakers will launch dozens of new EV models and continue offering billions in discounts to make them more affordable.

As EV prices reach parity with petrol cars, China will still drive industry growth. The biggest uncertainty is the US, where the incoming administration's measures could slow the EV transition.

— Kana Inagaki

Will Javier Milei Lift Argentina's Currency Controls?

Yes. Fearing an inflation spike and concerned about insufficient foreign reserves, the libertarian president has so far refused to lift strict limits on how much foreign currency individuals and companies can buy.

But in 2025, Milei will take the risk. The need to attract foreign investment and showcase his small-state instincts will loom large in his thinking when judging whether to take the plunge.

— Michael Stott

Will the War in Sudan Continue?

Sadly, yes. The war in Sudan has become a proxy conflict, with players from the UAE to Russia involved. Sudan's main combatants—de facto President General Abdel Fattah al-Burhan and Rapid Support Forces leader Mohamed Hamdan Dagalo (Hemedti)—still harbor illusions of victory.

Too many external and internal actors are profiting from the war. The conflict has displaced 12 million people, with millions on the brink of famine. It will take a major international push to stop it. Sadly, Sudan ranks too low on the world's priority list for this to happen.

— David Pilling

Will We Have Usable AI Agents?

Yes. AI agents are becoming the most sought-after phrase this year among big tech companies, AI startups, and enterprises. AI agents are software that exists on your phone or web browser and can perform digital tasks on your behalf—from filling out online forms to organizing your shopping cart, sending emails, or transcribing your calls.

Next year, we'll see products from Google, OpenAI, Anthropic, Microsoft, and others. Ultimately, AI agents could become our primary gateway to the digital universe.

— Madhumita Murgia

Christine Voong

2025 Global Predictions: Trump Tariffs, AI Agents, Bitcoin Surge, and More | Key Insights