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Escalating Trade Tensions Disrupt the Global Economy

Escalating Trade Tensions Disrupt the Global Economy and Force Companies to Recalculate

Amid intensifying global trade disputes, the IMF warns of slowing growth,
while major companies like Ford take decisive actions to mitigate losses.

 

 

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Georgieva

Ford

 

 

 


 Georgieva


 Trade Tensions Will Lower Global Growth Forecasts Without Causing a Full Recession

Kristalina Georgieva, Managing Director of the International Monetary Fund,
warned that global trade tensions and radical shifts in the trade system will lead the IMF to lower its global economic growth forecasts.
However, she ruled out the likelihood of an imminent global economic recession.

In her remarks on Thursday, Georgieva explained that the world is going through a delicate phase of structural changes in the trade system amid escalating U.S. tariffs and retaliatory responses from China and the European Union.
This has created an unprecedented level of uncertainty in trade policies and led to sharp fluctuations in financial markets.

She added that these trade shifts are imposing heavy economic costs,
and the IMF will issue downward revisions to its growth forecasts in upcoming reports.
However, she emphasized that these conditions do not yet amount to a global recession,
despite the expected impact on inflation levels in some countries.

Georgieva also pointed out that rising uncertainty increases the risk of financial instability,
highlighting movements in the U.S. bond yield curve as a concerning indicator. She said,
“If financial conditions deteriorate, everyone will be affected.”

 

 

Ford

It Halts Vehicle Shipments to China Due to High Tariffs

Ford Motor Company announced it has stopped shipping its vehicles from the United States to China after feeling the effects of retaliatory tariffs imposed by Beijing, which raised import taxes on certain vehicles to 150%,
directly affecting the competitiveness of American products in the Chinese market.

In an official statement, the company said it has adjusted its exports to China “in line with current tariff conditions.”
As a result, Ford has halted exports of several popular models such as the F-150 Raptor,
Mustang, Bronco, and Lincoln Navigator, which are manufactured in Michigan and Kentucky.

This decision comes at a time when U.S. automakers are facing increasing pressure due to tariffs imposed by President Donald Trump, which were later reinstated, raising concerns about their impact on company profits and suppliers alike.

Despite the halt in full vehicle exports, Ford will continue to export engines and transmissions manufactured in the United States to China.
The company also clarified that its local production in China, such as the Lincoln Nautilus, will continue unaffected by these tariffs.

It’s worth noting that Ford is considered one of the most adaptable companies to tariffs,
with approximately 80% of its vehicles manufactured within the United States.

 

 

 

Escalating Trade Tensions Disrupt the Global Economy and Force Companies to Recalculate

ECB Cuts Rates for the Seventh Consecutive Time

ECB Cuts Rates for the Seventh Consecutive Time Amid Trade Pressures and Falling Inflation

In a move reflecting the continuation of its monetary easing policy,
the European Central Bank has cut interest rates for the seventh time amid trade pressures and a decline in inflation rates.

Topic
Monetary Easing

Monetary Easing

The European Central Bank (ECB) announced on Thursday, following a meeting of its monetary policy committee,
a 25 basis point cut in interest rates—an action in line with market expectations—marking the seventh consecutive easing move.

With this decision, the main refinancing operations rate now stands at 2.40%, down from 2.65%,
while the deposit facility rate was reduced to 2.25%.

In the monetary policy statement released after the decision,
the ECB indicated that the process of reducing inflation is moving in the right direction,
noting that both headline and core inflation declined in March, including a notable drop in services sector inflation.

The statement also pointed out that most indicators support the return of inflation to the bank’s medium-term target of 2%,
with wage growth remaining moderate and corporate profits helping to absorb the impact of rising wages on inflation.

The ECB affirmed that the eurozone economy continues to show a degree of resilience in the face of global shocks.
However, it warned that escalating trade tensions are starting to negatively affect growth prospects
and confidence among households and businesses,
adding that a negative market reaction could tighten financial conditions.

The ECB’s Governing Council emphasized its commitment to a data-dependent approach,
stating that it will assess inflation expectations based on evolving economic and financial conditions,
core inflation dynamics, and the effectiveness of monetary policy transmission.

The bank also reiterated that it is not pre-committed to a specific interest rate path,
stressing its readiness to use all available tools to ensure inflation stabilizes at the 2% medium-term target
and to safeguard smooth policy transmission amid rising global uncertainty.

ECB Cuts Rates for the Seventh Consecutive Time Amid Trade Pressures and Falling Inflation

US Sanctions Escalation Pressures Chipmakers

US Sanctions Escalation Pressures Chipmakers and Shakes Global Markets

Global markets fell sharply during Wednesday’s trading session, driven by pressures on technology stocks,
particularly after the U.S. government’s decision to impose restrictions on Nvidia’s exports to China.
This comes amid growing concerns about weakening demand and escalating trade tensions.

 

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Japan

The Nikkei 225 Index dropped by 1%, closing at 33,920 points, driven by a sharp decline in chipmaker stocks.
Advantest, a key supplier to Nvidia, fell by 6.55%, while Disco slumped nearly 8%.
The U.S. dollar also weakened against the yen, falling to 142.28,
while the yield on 10-year Japanese government bonds dropped to 1.288%.

 

Europe

The Stoxx Europe 600 index recorded losses exceeding 1%, with technology stocks falling by more than 3%.
The French CAC, British FTSE, and German DAX indices also declined amid gloomy forecasts for global demand.

Dutch chip equipment maker ASML saw a notable drop,
losing over 6% of its value after reporting earnings that fell short of expectations.
The company reported net bookings of €3.94 billion for the first quarter, compared to market expectations of €4.89 billion.

 

United States

In the U.S., Nasdaq 100 futures fell by 2.3%, and Nvidia’s stock dropped by 7% in pre-market trading.
Asian chipmakers such as SK Hynix and Taiwan Semiconductor also came under heavy pressure due to concerns over a slowdown in production expansion.

These developments coincide with Japanese negotiators heading to Washington to begin a new round of trade talks.
Japan is seeking to understand the implications of the Trump administration’s decision to ban the H20 chip from access to the Chinese market
— a move that has raised investor fears and negatively impacted growth prospects in the global semiconductor sector.

 

 

 

US Sanctions Escalation Pressures Chipmakers and Shakes Global Markets

Global Economies Between Real Estate Highs and Trade Tensions

Global Economies Between Real Estate Highs and Trade Tensions UK House Prices Hit Record Levels Amid Criticism of Trump’s Tariff Policies

As the UK housing market experiences an unprecedented surge,
trade tensions resurface with sharp criticism of U.S. tariff strategies —
painting a contrasting picture of domestic growth versus global uncertainty.

 

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United Kingdom

UK House Prices Reach Record High Despite Supply Surge

House prices in the UK reached an all-time high in April,
even as the number of homes listed for sale climbed to its highest level in a decade during the same period.

According to the monthly report, the average asking price rose by 1.4% month-over-month,
equivalent to an increase of £5,312, bringing the national average to £377,182 — the highest in British housing market history.

The report also indicated that current prices are 1.3% higher than the same period last year,
with expectations that affordability for buyers may improve if the Bank of England begins cutting interest rates starting in May.

 

United States

Yellen: Trump’s Tariff Policies Are “Confusing” and Could Harm American Families

Former U.S. Treasury Secretary Janet Yellen criticized former President Donald Trump’s tariff approach,
describing his policies as “vague and illogical,” particularly due to the lack of clarity behind imposing tariffs on nations
that have helped diversify supply chains away from China, such as Vietnam.

Yellen pointed out that China has shown willingness to ease trade tensions if the U.S. reciprocates,
but warned that the continued imposition of tariffs could lead to an effective economic decoupling between the world’s two largest economies
— a move that may negatively impact American consumers by increasing their financial burden.

She also noted that recent volatility in the bond market and the decline of the U.S. dollar signal a drop in investor confidence.
However, she ruled out any immediate need for Federal Reserve intervention,
affirming that the U.S. economy remains strong and resilient.

 

 

 

Global Economies Between Real Estate Highs and Trade Tensions

Trump Denies Tariff Exemptions for Electronic Devices

Trump Denies Tariff Exemptions for Electronic Devices and Threatens New Restrictions on Chips

U.S. President Donald Trump has denied reports claiming certain electronic devices were exempted from tariffs,
stating that these products are still subject to a 20% duty.

 

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Electronic Devices

Trump clarified that the affected devices fall under what he referred to as the “Fentanyl Tariffs”,
imposed to pressure countries like China, Canada, and Mexico to curb the flow of narcotics into the U.S.
He noted that these products have been reclassified under a different tariff category.

Recently, U.S. Customs and Border Protection announced new exemptions that included smartphones and computers,
narrowing the scope of previous tariffs imposed by Trump — 125% on Chinese goods and 10% on most other countries.

Despite this announcement, Trump affirmed that electronic products originating from countries subject to the “Fentanyl Tariffs” will remain under a 20% tariff.

China welcomed the exemptions, describing them as a limited step in the right direction,
but urged Washington to fully remove the tariffs.
It emphasized that mutual respect and dialogue are the best path to resolving trade disputes.

 

Semiconductors Chips

New tariffs on the chip industry under review

In a separate context, Trump revealed the launch of a formal investigation targeting the semiconductor supply chain,
with an eye toward imposing additional tariffs to protect the vital U.S. tech sector.

Media reports indicate that the investigation is being conducted under Section 232 of the Trade Expansion Act of 1962,
which authorizes the president to restrict imports deemed a threat to national security.

Economic analysts expect this move to escalate tensions with key East Asian countries, especially Taiwan,
one of the largest chip suppliers to the U.S. This could directly impact American tech companies that heavily rely on importing these components.

Trump emphasized that the U.S. “will no longer allow itself to be held hostage by unfair trade practices,
“ calling for greater domestic manufacturing and restoring balance in trade relations with what he described as “hostile nations.”

 

 

Trump Denies Tariff Exemptions for Electronic Devices

Tariff War: The UK Moves to Support Exporters as the U.S. Eases

Tariff War: The UK Moves to Support Exporters as the U.S. Eases Pressure on Consumers

Amid growing global trade tensions, the UK counters U.S. tariffs with a historic support package,
while Washington exempts phones and computers to reduce domestic pressure.

 

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United Kingdom

Boosts Export Support with £20 Billion to Counter U.S. Tariffs

The United Kingdom announced on Sunday an increase in financial support for exporters,
allocating £20 billion (approximately $26 billion) to provide stability for businesses impacted by U.S. tariffs,
in what the government described as a new era for global trade.

This step follows the tariffs imposed by U.S. President Donald Trump,
which included a 25% duty on steel, aluminum, and cars, and a 10% tariff on most other imports from countries like the UK,
exacerbating uncertainty for British companies.

Under the new plan, the lending capacity of UK Export Finance will rise to £80 billion,
with £10 billion earmarked specifically to support the most affected companies in the near term.

Finance Minister Rachel Reeves stated:
“The world is changing, and now more than ever, it’s important to support our world-leading companies to help them overcome upcoming challenges.”
 She added:
“Today’s announcement will provide tangible support for thousands of businesses across the country.”

The government also clarified that small and medium-sized enterprises will be eligible for loans of up to £2 million as part of the support package.

 

 

 

 

Washington

Exempts Phones and Computers from Tariffs to Ease Pressure on Consumers

Amid the ongoing trade war with China, the United States announced an exemption for smartphones and computers from the additional tariffs imposed by President Donald Trump—a move aimed at easing the burden on American consumers.

The exemptions, detailed in a notice issued by U.S. Customs and Border Protection on Friday evening,
included a range of electronics from China that had previously faced additional tariffs of up to 145%.
This comes as the U.S. continues to exclude semiconductors from these tariffs and maintains a general 10% exemption for most trade partners.

The new exemptions narrow the scope of Trump’s earlier 10% general tariff announced earlier this month,
as well as the punitive tariffs targeting Chinese imports specifically.

The Trump administration continues to impose reciprocal tariffs on China in response to what Washington deems unfair trade practices.
The most recent move saw a new 125% tariff on Chinese goods, which came into effect recently,
adding to a prior 20% tariff imposed due to accusations involving the fentanyl drug supply chain.
With old and new tariffs combined, many products now face duties of 145% or more.

Many of the exempted items, such as hard drives and computer processors,
are not typically manufactured in the U.S. While Trump has insisted that the tariffs aim to revive domestic manufacturing,
experts believe achieving that goal could take several years.

 

 

 

 

 

 

Coffee

Warnings of Record-High Coffee Prices in the U.S. Due to Tariffs

Food commodity experts have warned that coffee prices in the United States are heading toward unprecedented levels
due to rising import tariffs and soaring global coffee prices,
as the country is entirely dependent on imports due to its unsuitable climate for coffee cultivation.

President Donald Trump surprised markets by imposing a new 10% tariff on coffee imports,
even after previously reversing a 46% reciprocal tariff on Vietnam, one of the top coffee exporters.
However, the new tariff remains in place,
leading to a direct 10% increase in import costs—just as Arabica coffee prices soared past $4 per pound in February,
the highest level in history.

 

 

 

Tariff War: The UK Moves to Support Exporters as the U.S. Eases Pressure on Consumers

Continued Price Decline in China and Divergence in Global Market Performance

Continued Price Decline in China and Divergence in Global Market Performance

China continued to witness deflation in consumer and producer prices during March,
raising concerns about the recovery of its economy amid ongoing trade pressures.
Meanwhile, TSMC recorded a strong surge in revenues, driven by advancements in artificial intelligence,
coinciding with renewed trade tensions between China and the United States following fiery remarks from Donald Trump.

 

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China

Consumer and Producer Prices in China Continue to Decline in March
 Consumer prices in China continued to shrink for the second consecutive month in March,
amid concerns over falling exports and increased supply due to the trade war.
 Official data released on Thursday showed that the Consumer Price Index (CPI) fell by 0.1% year-on-year,
following a 0.7% drop in February.
 The core CPI — which excludes food and energy — rose by 0.5%, compared to a 0.1% contraction in February.
 On a monthly basis, the index fell by 0.4% in March, after a 0.2% decrease in February, while expectations pointed to a 0.3% decline.
 Similarly, the Producer Price Index (PPI) dropped by 2.5% year-on-year, compared to a 2.2% fall in the previous month.
 Julian Evans-Pritchard, Senior China Economist at Capital Economics, commented on the data,
stating that deflationary pressures persist and may worsen if companies face greater difficulty in exporting their excess output.

 

 

 

 

 

 

 

TSMC

TSMC Reports Strong Revenue Growth Driven by AI Boom
It announced in a brief statement that its revenues rose by 42% in the first quarter of this year,
supported by a strong boom in the artificial intelligence sector.
 The company, which is the world’s largest chip manufacturer by contract,
posted revenues of 839.3 billion New Taiwan dollars (approximately $25.6 billion) from January to March.
 Although slightly below market expectations of 835.7 billion NT dollars,
the results were in line with the company’s previous guidance of between $25 and $25.8 billion.
 TSMC — whose clients include Apple and Nvidia —
is expected to announce its full Q1 earnings report on April 17,
along with its outlook for the upcoming period.
 The company remains one of the biggest beneficiaries of strong growth in the AI sector,
which has helped offset the decline in demand for chips used in consumer electronics.

 

 

 

 

 

Trump

China Wants a Trade Deal Amid Tariff Hike to 125%
 U.S. President Donald Trump stated on Wednesday that he believes the U.S. will reach a trade deal with China,
despite criticizing Beijing’s retaliatory measures in response to American tariffs.
 Speaking to reporters after his decision to suspend increased tariffs on most countries,
Trump said China wants to reach a deal but “doesn’t know how to act.”
 He described Chinese President Xi Jinping as “a proud man,” adding that Beijing is starting to recognize the current reality.
 Trump also labeled China as “the greatest manipulator in history,” noting it generated $1 trillion in trade with the U.S. last year.
 His remarks came after announcing an increase in tariffs on China to 125%,
just hours after raising them to 104%, in response to Beijing’s retaliatory actions.

 

 

 

 

Continued Price Decline in China and Divergence in Global Market Performance

Global Trade War Escalates: New U.S. Tariffs Shake Markets

Global Trade War Escalates: New U.S. Tariffs Shake Markets and Prompt Critical Economic Decisions

With the enforcement of strict new U.S. tariffs, the global economy has entered a new phase of tension,
pushing major economies to adopt defensive measures that have shaken financial markets.

 

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United States

Implementation of New U.S. Tariffs Deepens the Trade War and Pressures Global Markets

The United States has begun implementing new tariffs imposed by President Donald Trump on dozens of countries,
including a 104% tariff on Chinese goods, further intensifying the global trade war.

These reciprocal tariffs came into effect at 04:01 GMT, at a time when the global trade system is experiencing severe disruptions.
Fears of a global economic recession have increased, leading to a sharp downturn in global markets.

 

  • The S&P 500 index closed on Tuesday below the 5,000-point mark for the first time in nearly a year,
    nearing bear market territory, where the index is down     20% from its recent peak.
  • Estimates indicate that companies listed on the index have lost $5.8 trillion in market value
    since Trump announced the tariffs last Wednesday.

 

 

 

 

India

Indian Central Bank Cuts Interest Rates to Lowest Since September 2022 Amid Growth Concerns

The Reserve Bank of India decided on Wednesday to cut its key interest rate by 25 basis points,
bringing it down to 6%, the lowest level since September 2022.
The decision was in line with expectations, amid declining inflation rates and slowing economic growth in the world’s fifth-largest economy.

In a statement, the central bank explained that the rate cut was driven by improved inflation outlooks
and growing confidence in reaching the 4% inflation target within the next 12 months.

This decision coincides with the implementation of U.S. tariffs on Indian imports, which stand at 26%.
The bank noted that these tariffs have increased uncertainty affecting economic forecasts across regions,
posing new challenges for both inflation and growth domestically and globally.

 

 

 

 

Japan

Japanese Stocks Slide Amid Escalating Trade War and Rising Yen Demand as a Safe Haven

Japanese stocks declined sharply at the close of trading on Wednesday,
amid growing trade tensions sparked by new U.S. tariffs on multiple countries.
The turmoil prompted investors to sell long-term sovereign bonds to secure liquidity.

  • The Nikkei index fell by 3.93%, a drop of 1,298 points, closing at 31,714.
  • The Topix index declined by 3.40%, ending the session at 2,349 points.

This decline followed the enactment of new U.S. tariffs, which targeted Japanese imports with a blanket 24% tariff,
exacerbating global trade tensions and deepening fears over the consequences of the trade war.

Amid negative impacts on the stock market, Japanese investors liquidated long-term government bonds to secure cash.
This led to a 17-basis-point rise in the 30-year Japanese bond yield, reaching 2.702%, after touching 2.785% earlier in the session
—the highest level since August 2004.

In terms of currency exchange, the U.S. dollar fell against the Japanese yen by 0.77%, reaching 145.14 yen,
as demand for the yen rose as a safe haven in the face of escalating global trade tensions.

 

 

 

Global Trade War Escalates: New U.S. Tariffs Shake Markets

Reserve Bank of New Zealand Cuts Interest Rates Again

Reserve Bank of New Zealand Cuts Interest Rates Again Amid Global Economic Slowdown

The Reserve Bank of New Zealand (RBNZ) announced on Wednesday morning a 25 basis point interest rate cut,
lowering the official cash rate from 3.75% to 3.50%, marking the second consecutive cut this year.

 

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Details

This decision came in line with expectations, which had indicated a likely rate cut of the same magnitude.

The move reflects a shift in the overnight borrowing rate for banks from the central bank,
which significantly impacts the medium-term value of the currency.

As a result, traders are closely monitoring upcoming data from the RBNZ to assess the likelihood of further rate cuts in the near future.

In its latest monetary policy meeting, members of the Monetary Policy Committee agreed to lower the interest rate by 25 basis points,
bringing it to 3.50%.

The monetary policy statement issued by the bank included the following key points:

  • If economic conditions continue to evolve as expected,
    the Reserve Bank may be able to implement     additional rate cuts in 2025. 
  • Greater clarity on the impact of tariff measures gives the bank more room for future monetary easing. 
  • Global trade challenges are showing a weak impact on global growth outlooks,
    adding more risks to New Zealand’s economy. 
  • With inflation currently near the midpoint of the target range,
    the committee now has     greater flexibility to respond to any future changes in economic conditions. 

 

 

Reserve Bank of New Zealand Cuts Interest Rates Again Amid Global Economic Slowdown

Global Economic Landscape: U.S. Slowdown and Asian Rebound

Global Economic Landscape: U.S. Slowdown and Asian Rebound

Global economic indicators vary between cautious growth downgrades and strong quarterly results from tech giants,
amid an intensifying trade conflict between major powers.

 

 

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Morgan Stanley

Expected Slowdown: Morgan Stanley Lowers U.S. Economic Growth Forecast for 2025

In a fresh sign of mounting concerns over the U.S. economic outlook,
Morgan Stanley has cut its forecast for U.S. GDP growth in 2025 to just 0.8%, down from its earlier estimate of 1.5%.

In a recent report, the bank explained that while the U.S. economy is still expected to grow,
it is facing mounting challenges that are weakening its momentum.
It noted that the gap between a slow-growth scenario and an outright recession is narrower than it used to be.

Although the bank currently rules out the likelihood of a recession, it emphasized that ongoing tight monetary policies,
persistent inflationary pressures, and geopolitical tensions could add strain to the markets in the coming period,
prompting a more conservative growth outlook.

This downgrade comes amid the escalating consequences of the trade war between the U.S. and its trading partners,
which is beginning to weigh heavily on American economic activity.

 

 

 

 

Samsung

Strong Sales Drive Samsung’s Profits Beyond Expectations in Q1

Samsung Electronics’ preliminary results for the first quarter of the year have exceeded market expectations,
supported by a recovery in memory chip sales and increased demand for smartphones.

The South Korean company announced on Tuesday that it recorded operating profits of 6.6 trillion won
($4.49 billion) for the three months ending in March, surpassing analysts’ projections of 5.1 trillion won.

While the profits were higher than the previous quarter’s 6.49 trillion won,
they showed a slight decline compared to the same period last year, when earnings stood at 6.61 trillion won.

In terms of revenue, Samsung saw an annual increase of around 10%,
reaching 79 trillion won — marking its highest-ever Q1 sales and the second-highest quarterly revenue in the company’s history.

Samsung is set to release its full financial results, including net profits and segment performance, on April 30.

 

 

 

China

U.S. Treasury Secretary: China’s Escalation Is a Grave Mistake; Balance of Power Favors Washington

Amid the intensifying trade war between the world’s two largest economies,
U.S. Treasury Secretary Scott Besant described China’s recent moves as “a big mistake,”
asserting that the United States holds a clear advantage in the ongoing dispute.

In an interview with CNBC, Besant stated, “I believe China’s escalation was the wrong decision.
In the end, what do we have to lose from raising tariffs?
We export to China one-fifth of what they export to us, so the damage will be greater on their side.”

The secretary added that around 70 countries have contacted the White House to begin trade discussions,
highlighting President Donald Trump’s commitment to addressing global trade imbalances.

Besant clarified that the imposition of import tariffs is ultimately aimed at bringing jobs back to the U.S. economy, stating,
“We might be building a tariff wall, but in the meantime, we’re reaping great benefits from those tariffs.”

 

 

 

Global Economic Landscape: U.S. Slowdown and Asian Rebound