The year to come. The three factors that will push the USA in 2026

2025 will be remembered as the year of America’s turning point. Or rather, two American turning points. The first is due to Donald Trump. In just a few months, the new president raised tariffs on imported goods on average to nearly 18% from about 2%; stopped immigration, reducing workforce growth; it has caused economic uncertainty to rise above the peak reached in the Covid years; reversed the industrial policies introduced by the Biden administration.

American growth

Many, including this writer, expected that this would hurt economic growth in the United States. And in fact there was a slowdown: growth halved, going from 2.8% in 2024 to a probable 1.4% in 2025. But nothing catastrophic. The reason is that there has been a second, equally important turning point: the race to win the artificial intelligence (AI) race. JP Morgan estimates that AI-related investments contributed more than 1% to US growth in the first half of 2025.

We still don’t know what other news President Trump will have in store for us in 2026. There will certainly be some. But it is likely that, even in the new year, the American economy will surprise us with its strength and dynamism. Both the International Monetary Fund (IMF) and the Congressional Budget Office (an independent body) forecast growth of just above 2% for the United States in 2026, and other forecasts are also around or just below 2%. There are three factors that will boost the American economy: a powerful fiscal stimulus, which should contribute almost 1% to growth; again investments related to AI and its adoption throughout the economy; last but not least, a climate of optimism and confidence in the future, which should support investments and consumption in the year to come. Of course, there are also risks: an increase in inflation could lead to a less expansionary monetary policy or, if the US central bank lost its independence, it would cause long-term interest rates to rise; AI adoption could destroy more jobs than expected; or a hypothetical speculative bubble in AI-related stocks could burst, causing the stock market to fall.

The technological revolution

The push of AI

Lhe breakthrough due to AI is truly epochal. Today the potential growth of the American economy, i.e. sustainable growth under full employment, is estimated at around 1.8% per year. This number is arrived at by assuming that the workforce grows by 0.4% and labor productivity by 1.4%. Rigorous studies on the effects of AI predict that productivity growth could increase by 1.8 percentage points in the coming years. This would bring US potential growth to 3.5-4%, almost at China’s levels. It would be a revolution. The sustainability of the American public debt would no longer be at riskthe downsizing of the workforce and inflation would no longer be a problem, the dollar would strengthen again, the American stock market would continue its run.

All this will not happen next year, or even the year after. Past experience teaches that such profound technological revolutions need time to spread throughout the economy. However, data indicates that the adoption of AI is faster than other recent innovations, such as PCs, the internet and mobile phones. A significant acceleration in productivity could already materialize starting from 2030. This prospect will instill optimism and stimulate investments and financial markets already in the coming years, although there is also the risk of unemployment among workers displaced by new technologies.

Europe and Italy

The prospects for Europe and Italy, however, are far from bright. The IMF and the OECD estimate growth of 1.1-1.2% for the Euro area in 2026, with Italy further behind at 0.6-0.8%. A first problem is the ongoing global changes, which have eroded European competitiveness. Exports to the United States (about a fifth of European Union exports) have become less convenient, due to American tariffs (about 16% on average on the value of goods exported from the European Union) and the appreciation of the euro (7% from March 2025). Uncertainty over American trade policy has not disappeared, both due to the unpredictability of the Trump administration and due to the appeals pending at the American Supreme Court. Added to this is the geopolitical uncertainty over the outcome of the war in Ukraine, and the prospect that the terms of a possible truce will be dictated above all by American economic interests. The IMF estimates that all this could cause a loss of half a percentage point in European growth in the two-year period 2026-27, only partially offset by the expected increase in spending on defense and infrastructure.re.

In theory, the productivity gains associated with AI should also benefit the European economy. In practice, however, there are important differences between the two continents. Not being a protagonist of this technological revolution, Europe has not seen a significant acceleration of investments in this sector. AI adoption in Europe also lags behind the United States. Structural rigidities, which make labor mobility more difficult, and the structural composition of the economy weigh heavily, with a lower weight of financial and business services and high-tech sectors, where AI applications are more immediate and relevant.nti.

The risks for the West

Overall, economic fundamentals should remain good also in 2026, with global growth above 3%, and without significant risks of recession or surges in inflation. However, it is not a reassuring economic picture. Politically and institutionally, the United States is moving away from the values ​​and traditions of Western democracies, and increasingly resembles an oligarchy led by an unscrupulous business regime. But economically they are stronger than ever, capable of innovating and adapting quickly to a rapidly changing world.

Europe, however, remains fragmented and trapped in an institutional structure that prevents it from reacting to the changes underway. Without a reform of the treaties, which allows for a deeper political integration of European countries, Europe’s economic decline is destined to continue. But ambitious reforms of the European institutions seem difficult to achieve today.

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