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The OECD has downgraded its economic growth forecasts, projecting a 1.6% growth for the US in 2025, down from 2.2%, primarily due to the impact of tariffs and trade policies. Global growth is expected to slow to 2.9%, with significant repercussions for the US, Canada, Mexico, and China. The uncertainty surrounding tariffs is anticipated to reduce business investment and consumer purchasing power, disproportionately affecting lower-income households.
South Korea's new President Lee Jae-myung may delay trade negotiations with the US as his administration reviews strategies amid economic pressures. With the economy projected to grow only 0.8% this year, Lee emphasizes the importance of trade discussions, particularly in light of historical patterns and previous agreements that yielded mixed results. His recent election provides a strong mandate, yet the leadership vacuum from recent resignations complicates the negotiation landscape.
China's EV market faces significant challenges as BYD's shares plummet by 17%, erasing HK$122.3 billion in market value amid price cuts on 22 models. Despite a slight increase in vehicle deliveries, domestic sales have declined, raising concerns over financial stability in a fiercely competitive landscape. The ongoing price war, supported by government strategies, is creating international trade tensions, with Western nations considering tariffs in response to China's aggressive pricing.
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Bank of Japan Governor Kazuo Ueda expressed confidence that Japan's economy can endure the impact of U.S. tariffs, supported by strong corporate profits and a tight labor market that may sustain rising wages and prices. Despite a recent contraction and slowing export growth, Ueda anticipates inflation will gradually approach the BOJ's 2% target, contingent on improved trade negotiations. The timing of the next interest rate hike remains uncertain, dependent on future economic developments.
Middle East airlines are projected to achieve a net profit of $6.2 billion in 2025, leading the global market with an 8.7% profit margin per passenger, driven by strong economic performance and investments in travel infrastructure. While global airline profits are expected to rise to $36 billion, challenges such as delays in aircraft deliveries and a decline in cargo revenues highlight the industry's ongoing struggles amidst macroeconomic pressures.
UK trade minister Jonathan Reynolds will meet US trade representative Jamieson Greer in Paris on June 3, 2025, to discuss the impact of rising US steel tariffs, which are set to increase from 25% to 50%. This change poses significant challenges for British steel producers, who export around £700 million worth of steel and aluminum to the US annually. The meeting will also address trade arrangements with the EU, highlighting the vulnerabilities created by delays in implementing political agreements.
China's manufacturing sector contracted sharply in May, with the Caixin/S&P Global PMI dropping to 48.3, reflecting a significant decline in export orders due to US tariffs. This downturn, driven by reduced foreign demand, marks the fastest contraction since September 2022 and signals broader economic challenges, prompting Chinese policymakers to plan a substantial increase in government spending to mitigate tariff impacts. The divergence between the Caixin and official PMI readings highlights the sensitivity of export-oriented firms to trade tensions, underscoring the complex economic repercussions of US-China tariffs on global supply chains.
US President Donald Trump and Chinese President Xi Jinping are set to discuss trade issues this week, following accusations of China violating tariff agreements. The talks will focus on critical minerals and export restrictions, highlighting China's dominance in rare earth processing, which gives it significant leverage in negotiations. Despite ongoing tensions, both leaders recognize the economic costs of tariffs, prompting the need for dialogue to address structural trade imbalances.
The Reserve Bank of Australia (RBA) has raised concerns about the global economic risks stemming from elevated US tariffs, which may lead to reduced investment, output, and employment. Interestingly, these tariffs could lower inflation in Australia by increasing the influx of cheaper goods, creating a complex policy challenge for the central bank. Historical data indicates that Australia is particularly vulnerable to trade tensions, with past conflicts resulting in significant job losses and economic contraction, prompting the RBA to adopt a cautious approach in its monetary policy.
Global Trade Developments
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OECD revises global growth forecasts amid rising US trade tariffs
07:20 04.06.2025
south korea's president reevaluates us trade talks amid economic challenges
07:00 04.06.2025
China's electric vehicle market faces turmoil amid price cuts and competition
05:30 04.06.2025
Chinese firms adapt to US tariffs by focusing on domestic markets
05:02 04.06.2025
boj governor confident in economy's resilience amid us tariff challenges
12:06 03.06.2025
middle east aviation projected to lead global profits in 2025
10:57 03.06.2025
UK and US officials to address rising steel tariffs in Paris meeting
10:05 03.06.2025
China's manufacturing index contracts amid US tariff impacts on exports
09:40 03.06.2025
Trump and Xi Jinping to discuss trade issues amid ongoing tensions
09:30 03.06.2025
Australia's central bank warns of global economic risks from US tariffs
09:00 03.06.2025
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