Splinternet threat and economic uncertainty in the USA: A comprehensive analysis of the key factors 2025 – Image: Xpert.Digital
USA 2025: Focus on Economic Transformations and Macroeconomic Risks
Between growth and uncertainty: An overview of the US economic situation
The economic landscape of the United States in 2025 is characterized by a complex mix of structural transformations, political uncertainties, and macroeconomic risks. While gross domestic product (GDP) growth remained stable at an annualized rate of 2.8% in the third quarter of 2024, recent developments point to an erosion of the fundamentals. This report analyzes the drivers of current uncertainty, focusing in particular on the interaction between consumer behavior, technology markets, monetary policy frameworks, and geopolitical tensions.
Consumer dynamics and the retail crisis: Walmart as a canary in a coal mine
Retail giant Walmart acts as a seismographic indicator of consumer sentiment. Its latest quarterly figures reveal a paradoxical situation: despite comparable sales growth of 4.9% in the 2024 holiday quarter, the company is forecasting sales growth of only 3–4% for fiscal year 2026. This discrepancy between current performance and future expectations can be explained by three factors:
- Inflation-related loss of purchasing power: Consumer prices rose more than expected in January 2025, increasing by 3.0% annually, with basic foodstuffs (egg prices +53%) and insurance costs in particular putting a strain on household budgets.
- Credit crunch: The Federal Reserve has frozen its key interest rates at 4.25–4.50%, which is driving up refinancing costs for consumer loans.
- Trade policy risks: The tariffs on Chinese and Mexican imports threatened by the Trump administration could further accelerate the price spiral.
The bankruptcy of the fashion chain Forever 21 – with planned closures of 200 stores – underscores the structural crisis facing brick-and-mortar retail. While online sales at Walmart rose by 20%, traditional business models are struggling with declining margins and changing consumer behavior. Analysts point to a “retail Darwinism” in which only omnichannel-capable companies survive.
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Technology sector: Between AI euphoria and regulatory chaos
The tech industry presents a mixed picture in 2025. On the one hand, companies like Nvidia and Alphabet are driving the commercial application of generative AI, while on the other hand, established players are suffering from declining profits. Meta Platforms and Microsoft significantly missed recent profit expectations, indicating saturation effects in their core markets.
The financial difficulties of Twitter X (formerly Twitter) under Elon Musk illustrate the risks of overstretched platform strategies. Despite massive cost reductions (including the automation of content moderation), user growth has stagnated at 300 million monthly active users, while advertising revenue has halved. Musk's parallel negotiations to acquire TikTok raise questions about strategic coherence: Integrating a curated video platform into the Twitter ecosystem could provoke regulatory antitrust concerns.
At the regulatory level, there are increasing indications of a fragmentation of the digital single market. The planned sale of TikTok to US investors – possibly with Oracle involved as data trustee – reflects the growing polarization between Chinese and American tech interests. Experts warn of a “splinternet” that undermines global economies of scale.
A splinternet refers to the fragmentation of the global internet into smaller, isolated networks, often due to regional, political, economic, or regulatory reasons. This division results in the open, globally connected internet breaking down into a collection of separate networks controlled by governments or corporations.
Examples of Splinternet practices:
- China's "Great Firewall": A heavily censored and controlled internet ecosystem.
- Russia's "sovereign internet": Efforts to create a Russian internet independent of the global network.
Inflation and monetary policy dilemma: The Fed under fire
The US Federal Reserve faces a trilemma: balancing price stability, economic growth, and political pressure. Although core PCE inflation, at 2.7%, is significantly above the 2% target, the Trump administration is demanding aggressive interest rate cuts to stimulate the economy.
Economists identify three persistent sources of inflation:
- Wage-price spiral: The increase in the minimum wage to $18/hour in 20 states is driving up service costs.
- Energy costs: The reintroduction of fracking restrictions has led to oil prices of $95/barrel.
- Trade protectionism: The 10% special tariffs on Chinese electronics imports are reflected in consumer prices.
The Federal Reserve is responding with an asymmetric response framework: While further interest rate hikes are ruled out, moderate cuts are not planned until Q3 2025. This stance is supported by the labor market – the unemployment rate remains at 3.8% – but carries the risk of overheating.
Geopolitical risks and trade policy volatility
Donald Trump's re-election has destabilized the 21st-century trade architecture. Key measures include:
- Section 232 duties of 25% on steel imports and 10% on aluminium imports.
- Termination of the USMCA agreement with renegotiations on “American Automobile Production”.
- Export controls for high-tech goods to allies of the BRI initiative.
This policy is leading to supply chain shifts, as demonstrated by the 12% increase in nearshoring activities in Mexico. However, industry associations warn of productivity losses: relocated manufacturing is on average 23% more expensive than Asian production.
In the technology sector, systemic competition with China is escalating. In 2024, the Committee on Foreign Investment in the United States (CFIUS) blocked 47 acquisitions by Chinese investors, while at the same time US cloud providers are losing access to the Chinese market.
Resilience through diversification
The economic uncertainty in the US in 2025 stems from the interdependence of overheated financial markets, structural industry transformations, and the geopolitical instrumentalization of economic policy tools. Companies are responding with regional diversification (65% of S&P 500 firms plan to relocate production) and AI-driven efficiency improvements (average productivity gains of 18% in manufacturing).
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