January 12, 2026

The below transcript is a translation of the podcast audio that has been machine generated by Notta.

Hi, everyone. My name is Taylor St. Germain with ITR Economics. Thanks so much for joining me on this episode of TrendsTalk. We at ITR are your apolitical and unbiased source of economic intelligence. I hope 2026 off to a great start for everyone.

Today, I wanted to kick off 2026 by talking about the global economy. I wanted to highlight different regions around the world, how some of our trade relationships are changing, and talk about the direction of the broader global economy. So we’ll start with the latter, we’ll start at the end. Where is world industrial production going? That is our benchmark for the global economy. As we sit here today, we’re in accelerating growth as it pertains to the global economy. World industrial production is up about 2.8% year-over-year. And as we look ahead to the rest of 2026, we expect growth to continue to characterize world industrial production. Albeit, we’ll start to see that pace of growth slow down as we move into the latter half of this year.

One of the leading indicators that we track very closely as we look at the global economy is the G7 leading indicator. That is an indicator that is comprised of exactly as it’s titled, which is the countries that belong to the G7, the major seven developed countries around the world. It is an eight-month leading indicator to world industrial production, and it is suggesting that we see some sideways movement in the growth rates of the global economy. It’s not pointing below zero, which is the important context here. That leading indicator is suggesting that we see growth, but that that growth could come at a slower pace.

The reason I bring this up is because I know there’s a lot of concerns geopolitically when we look at what has happened in recent weeks with the situation in Venezuela, when we continue to monitor Russia-Ukraine, when we look at some conflicts in the Middle East and some challenges in the EU. There are a lot of concerns and anxieties out there, but our global economy is growing and our leading indicators suggest that that growth continues, even if it is at a slower pace as we move into the second half of 2026. So no global recession in the cards, just a little bit of slowing growth.

Now, there are going to be certain countries or regions that grow faster than others. And for those of you that are Trends Report subscribers, you could head over to our Trends Report, because in the Trends Report we have our global dashboard. And that highlights many of these countries and regions and their forecasts for 2026. The regions that we focus on in that global dashboard are Canada, Mexico, Brazil, Western and Eastern Europe, India, and China. The good news is that in 2026, we expect growth in every single country or region that I just listed off. So let me put that growth in context. We have Canada’s industrial economy growing at 1.3% year-over-year, Mexico at 0.8%, Brazil at 0.5%, Western Europe at 1.2%, Eastern Europe at 3.5%, India at 3.3, and China at 3.9%. So it is important to acknowledge that some regions will grow faster than others. But again, the key takeaway here is there’s no negative numbers for those countries as we look at growth rates for 2026. That’s not to say there aren’t still challenges out there. I’m not that naive as an economist, but I think it’s an important part of the story, which is most of these major developed regions around the world are projected to grow in 2026.

Now, I did want to linger on the fact that our trade relationships are changing a little bit. One, I should say, a few metrics all under the same umbrella that I focus on is import, US imports of goods. And I look at US imports of goods from China, Canada, Mexico, and Europe. And we have seen some massive shifts over the last nine months since tariffs have been in place. We have seen a significant decline in imports from China. The US is buying a lot less from China. That number is down to $359 billion. Canada has also seen a decline in imports. So the US is importing less from Canada and importing less from China. Then the question is, who’s making up the difference? Well, it’s Mexico and the EU and Europe that are making up the difference. We have seen an increase in our imports from the EU. We have seen an increase in our imports from Mexico. So the clear takeaway here is tariffs and trade relationships, they have impacts on economies. China and Canada are the real losers so far of this whole situation as the US is importing a lot less from those two countries. And Mexico and the EU have been the winners so far in 2025.

Everybody always asks me, Taylor, what’s going to happen with the tariffs? Folks, if I knew what’s on President Trump’s mind, I’d be a very wealthy guy somewhere. That’s not always the case. My guess is as good as yours there. But what we can do is continue to evaluate the impacts from the tariff policies. As they change, we continue to look at how our trade relationships change. We look at the resiliency of supply chains around the world so you can be best positioned to take on the global economy, the global supply chain, regardless what’s happening with tariffs. That’s my goal for 2026. Again, I don’t set tariff policy. I don’t know what’s on President Trump’s mind. But we here at ITR, we have a lot of data. We have a lot of resources to help you through these uncertain times so that we can grow, just like all of the growth rates for 2026 are showing us for the different countries around the world.

I’ll continue to keep you updated on this and a lot of other great global events throughout 2026. Thanks for tuning in. Thanks for joining me on this episode of TrendsTalk. Please like and subscribe to TrendsTalk wherever you listen to your podcasts. I look forward to seeing you all in the next one. Thanks so much. Take care for now.