Abstract Most climate models simulate greater warming in the equatorial eastern Pacific than in the west under historical forcing, resulting in a reduced zonal sea surface temperature (SST) gradient and a weakened Walker circulation. This contrasts with observed trends and highlights a persistent model–observation discrepancy with far‐reaching impacts on regional climate extremes. The authors’ previous work showed that reducing mean‐state biases in a coupled model yields SST trends more consistent with observations. Here, we downscale tropical cyclones (TCs) from these simulations and find that a strengthened zonal SST gradient is associated with increased TC frequency and hazards in the North Atlantic and suppresses activity in the South Pacific. In future projections, both biased and bias‐corrected models simulate relative eastern Pacific warming, yet their TC responses differ regionally, with the bias‐corrected model projecting greater TC activity and hazards over the North Atlantic.