Trump 2.0 could be bad news for global inflation, analysts say

• A second presidential term for former President Donald Trump could reignite global inflation as his America-first policies drive up costs across the world, analysts warned.
• The high tariff, low tax economic agenda, which defined Trump's first term would prove even more damaging this time around, they said, as the "inflation mindset" remains pervasive.
• "Compared to 2016, when inflation had been low forever and inflation expectations were low ... 2024, 2025 is going to be very different," Michael Metcalfe told CNBC.

A second presidential term for former President Donald Trump could reignite global inflation as his America-first policies drive up costs across the world, analysts warned.

The high tariff, low tax economic agenda, which defined Trump's first term — and is inflationary in its own right — would prove even more damaging this time around, the analysts said, as the "inflation mindset" persists.

"There's a bigger risk that Trump's policies will be more inflationary in a second term than they would have been in the first," Michael Metcalfe, head of macro strategy at State Street Global Markets, told CNBC's "Squawk Box Europe" on Tuesday.

"Compared to 2016, when inflation had been low forever and inflation expectations were low ... 2024, 2025 is going to be very different," he continued. "The level of inflation is higher, inflation expectations are higher, and we're still in this inflation mindset."

That could impact price rises both domestically but also well beyond U.S. borders, in Asia and Europe.

High tariffs are typically seen as inflationary because they raise the cost of imported goods, enabling domestic producers to increase their prices, leaving consumers to pay more. Tax cuts, meanwhile, can boost consumer