Interview: U.S. trade restrictions may accelerate global economic fragmentation, Brazilian economist warns

SAO PAULO, Dec. 19 (Xinhua) -- U.S. tariffs and trade barriers are disrupting global supply chains and could push the world economy toward deeper fragmentation by 2026, Brazilian economist Luis Paulino said in an interview with Xinhua.

Washington's protectionist measures and retreat from multilateralism are expected to fuel persistent trade frictions, weighing on global trade and economic growth, said Paulino, a professor at Sao Paulo State University and director of its Confucius Institute.

Paulino noted that the impact is already being felt in the United States, where broad tariffs have raised living costs, especially for lower-income households.

"Tariffs are essentially taxes on imports that are usually paid by consumers and companies," he said.

Globally, trade restrictions are disrupting supply chains, increasing production costs and adding to inflationary pressures, the professor warned.

He also pointed to structural shifts in which companies relocate production to politically aligned or perceived "safer" countries, a process he said requires heavy investment and takes years to complete.

Looking ahead, Paulino expects global economic growth in 2026 to remain broadly in line with 2025, highlighting China as a key growth driver.

China's growth target of around 5 percent for this year "is likely to be achieved," he said, adding that the country's macroeconomic policies could help support global conditions.

Still, Paulino warned that escalating trade disputes, a weakening rules-based trade system and persistent inflation risks could continue to slow global economic expansion.