Economic Forecast Indicates Challenges to Sustainable Development Goals

Impact on SDG 8: Decent Work and Economic Growth

A projected slowdown in U.S. economic growth for the second half of 2025 poses a significant threat to the advancement of Sustainable Development Goal 8 (SDG 8), which promotes sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The Conference Board reports that while a recession is unlikely, Gross Domestic Product (GDP) growth is expected to slow substantially.

• GDP Forecasts: The Conference Board anticipates a 1.6% increase in GDP for the year, while the New York Fed projects a lower growth rate of about 1%. Pantheon Macroeconomics notes the economy has “slowed decisively,” with GDP growth likely averaging 1.5% in the first half of 2025.
• Leading Economic Indicators: Weakness in the economy, as measured by the Conference Board’s Leading Economic Index, is attributed to rising unemployment claims, poor consumer expectations, and weak new manufacturing orders.
• Threats to Employment: The Yale Budget Lab forecasts that current tariff policies will likely increase unemployment by 0.5 percentage points by the end of the year, directly undermining the targets of SDG 8. Furthermore, reduced immigration is expected to slow labor force growth, compounding challenges to economic vitality.

Implications for SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities)

The implementation of new tariffs is expected to increase consumer prices, creating significant headwinds for SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities). Price hikes on goods disproportionately affect low-income households, threatening to increase financial hardship and widen the economic divide.

• Increased Consumer Costs: Following the announcement of 30% tariffs on imports from Mexico and the EU, consumers now face an average effective tariff rate of 20.6%, the highest level recorded since 1910.
• Household Financial Burden: A study by the Yale Budget Lab estimates that these tariffs will result in a 2.1% short-run increase in prices, costing the average U.S. household an additional $2,800 this year.
• Economic Inequality: Such a regressive financial impact risks pushing more families toward the poverty line and exacerbating existing inequalities, moving the nation further from the goals of SDG 1 and SDG 10.

Setbacks for SDG 9 (Industry, Innovation, and Infrastructure) and SDG 17 (Partnerships for the Goals)

The current trade policy environment creates obstacles for SDG 9, which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation, as well as SDG 17, which calls for strengthening global partnerships for sustainable development.

• Industrial Impact: Weak new manufacturing orders and a slowdown in industrial production, as noted in economic indexes, signal a challenge to the sustainable industrialization targets of SDG 9.
• Trade Partnerships: The imposition of high tariffs runs counter to the principles of SDG 17, which advocates for a universal, rules-based, and equitable multilateral trading system. This policy direction strains international economic relationships and undermines global cooperation.
• Long-Term GDP Impact: The Yale Budget Lab estimates that over the long run, the tariff policies will trim 0.5 percentage points from GDP, hindering the long-term economic capacity needed to invest in the innovative and sustainable infrastructure central to SDG 9.

Summary of Economic Outlook and SDG Alignment

The consensus among economists indicates a decisive economic slowdown, driven primarily by tariff-related price increases and dampened consumer sentiment. This outlook presents a multi-faceted challenge to the United States’ progress on the 2030 Agenda for Sustainable Development.

1. A significant economic slowdown is forecast for 2025, directly impacting the objectives of SDG 8 (Decent Work and Economic Growth).
2. Tariff-induced inflation is projected to increase the cost of living, posing a direct risk to SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).
3. Disruptions to trade and manufacturing challenge the foundations of SDG 9 (Industry, Innovation, and Infrastructure) and SDG 17 (Partnerships for the Goals).

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth

  The article is fundamentally about economic performance. It extensively discusses Gross Domestic Product (GDP) growth projections, the slowing of the economy, and factors influencing it. It also directly addresses employment issues, such as “rising claims for unemployment insurance” and the potential for tariffs to “push up unemployment by 0.5 percentage point.”

• SDG 1: No Poverty

  The article connects macroeconomic policies to household finances. It states that tariffs will lead to higher prices, setting back “the average U.S. household by $2,800 this year.” This direct impact on household disposable income is relevant to poverty, as a significant loss of purchasing power can push vulnerable households closer to or into poverty.

• SDG 10: Reduced Inequalities

  The article touches upon inequality through its discussion of immigration and trade. The mention of “reduced immigration to slow labor force growth” relates to policies on migration. Furthermore, while the article mentions an “average” cost to households, economic shocks like price increases from tariffs often disproportionately affect lower-income families, potentially exacerbating inequality.

• SDG 17: Partnerships for the Goals

  The article’s focus on “30% tariffs on imports from Mexico and the EU” and an “average effective tariff rate of 20.6%” directly relates to international trade policy. Tariffs are a tool that can hinder global partnerships and work against the goal of an open and equitable multilateral trading system, which is a key aspect of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 8.1: Sustain per capita economic growth

   The entire article revolves around the rate of economic growth. It provides multiple forecasts for Gross Domestic Product (GDP), such as expectations for growth to “slow substantially in 2025,” a projection of “1.6% this year,” and other estimates like “1.5%” and “1 percent.” This directly aligns with the goal of sustaining economic growth.

2. Target 8.5: Achieve full and productive employment and decent work for all

   The article explicitly discusses employment challenges. It notes “rising claims for unemployment insurance” as a negative economic indicator and cites a study predicting that tariffs will “push up unemployment by 0.5 percentage point.” This directly concerns the goal of achieving full employment.

3. Target 10.7: Facilitate orderly, safe, regular and responsible migration and mobility of people

   This target is implicated by the statement from the New York Fed President, who expects “reduced immigration to slow labor force growth.” This highlights the connection between migration policies and their economic consequences, a central theme of Target 10.7.

4. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system

   The article’s central theme is the economic impact of tariffs. The implementation of “30% tariffs on imports from Mexico and the EU” and reaching the “highest level [of average effective tariff rate] since 1910” are actions that run counter to the promotion of an open and non-discriminatory trading system.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 8.1 (Sustain per capita economic growth)

  Annual growth rate of real GDP: The article is replete with this indicator. Specific figures mentioned include “GDP will likely increase 1.6% this year,” “GDP growth likely averaging about 1.5%,” and a forecast for “real GDP growth this year to be about 1 percent.” These figures are direct measures of economic growth.

• Indicator for Target 8.5 (Achieve full and productive employment)

  Unemployment rate: The article provides a specific, measurable impact on this indicator, stating that tariffs will “push up unemployment by 0.5 percentage point.” It also refers to “Rising claims for unemployment insurance,” which is a leading indicator for the unemployment rate.

• Indicator for Target 17.10 (Promote an open trading system)

  Average tariff rate: The article explicitly provides this indicator, noting that consumers face an “average effective tariff rate of 20.6%.” This metric directly measures the level of trade restriction, which is what Target 17.10 seeks to minimize.

• Implied Indicators for Household Well-being (Related to SDG 1)

  Change in consumer prices and household costs: The article implies indicators related to inflation and household financial burden. It mentions a “2.1% short-run increase in prices” and a direct cost to households, stating the tariffs “will likely set back the average U.S. household by $2,800 this year.” These can be used to measure the impact on household purchasing power and poverty levels.

4. Summary of SDGs, Targets, and Indicators

Source: cfodive.com