US Growth Defies War Shock, Tops 3.5%

U.S. Treasury Secretary Scott Bessent said on Tuesday, April 14, that the underlying U.S. economy remains strong and that growth this year could come in above 3% or even 3.5%. His comments were delivered as markets grapple with the effects of the ongoing U.S.-Israeli war on Iran, which has pushed oil prices higher and contributed to broader volatility.

The conflict has also been linked to a blockade of the Strait of Hormuz, a major energy transit route. Officials described the strait as a critical chokepoint for roughly 20% of global oil and natural gas exports, a share that underscores why disruptions there can quickly ripple through energy pricing and risk sentiment across regions.

Bessent’s outlook diverged from updated projections released the same day by the International Monetary Fund and the World Bank. The IMF cut its global growth forecast, pointing to energy price spikes tied to the conflict. Bessent said the downward revisions and higher inflation projections reflected an overreaction to current conditions, arguing that the U.S. economy’s fundamentals remain resilient even as energy costs rise.

Alongside the growth discussion, Bessent addressed trade policy and the potential path for U.S. tariffs. He said tariffs on other nations could be restored to their prior levels by July, signaling that the administration is considering ways to re-establish duties after a key legal setback earlier this year.

That setback came in a February Supreme Court ruling that found President Donald Trump exceeded his authority by imposing broad global duties under an emergency law. In response, the Trump administration has been weighing alternative mechanisms, including investigations under Section 301 of the Trade Act of 1974, as a possible route to reimpose tariffs within a different legal framework.

For global markets, the combination of higher energy prices and renewed tariff uncertainty places attention on two major channels: inflation pressures and trade flows. Energy costs can affect consumer prices and corporate margins across multiple economies, while tariff changes can reshape supply chains and pricing for cross-border goods. S. growth view and the IMF’s global downgrade highlights uncertainty over how quickly conflict-driven energy shocks translate into slower activity.

Key unknowns remain centered on the duration and intensity of the war, the persistence of the Strait of Hormuz disruption, and whether tariff levels are in fact reset by July. Officials have not provided a definitive timeline for how trade probes would proceed, and the market impact of any tariff move would depend on scope, timing, and the response of affected countries.