International News 21 April 2025
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WTO Slashes 2025 Global Trade Outlook, Warns of Deeper Slump!
The World Trade Organization (WTO) has made substantial adjustments to its global trade growth forecasts for 2025, projecting a contraction of 0.2% instead of the previously predicted 3.0% expansion. This downgrade can be attributed to the United States' escalating tariff policies and the ripple effects they are having on the global economy, potentially leading to the biggest decline in trade since the height of the COVD-19 pandemic. The US has imposed additional import tariffs on steel, automobiles, and various countries, while tensions with China have continued to escalate, resulting in retaliatory tariffs above 100% on both sides. The WTO has expressed concerns that if the US reinstates the previously paused tariffs, global trade in goods growth may experience a 0.6% decrease, with the overall contraction potentially reaching 1.5%. This situation is a significant concern for the global economy and could negatively impact overall global GDP growth.
Trump takes aim at nickel, US considers new tariffs on critical minerals
US President Donald Trump has ordered an investigation into potential tariffs on all critical mineral imports, in a move that escalates the US trade war and directly challenges China's mining industry dominance. The investigation, to be initiated by Commerce Secretary Howard Lutnick, is based on national security considerations under Section 232 of the Trade Expansion Act of 1962. This section has previously been used by Trump to impose global tariffs on steel and aluminum. The investigation will encompass critical minerals such as cobalt, nickel, rare earth elements, uranium, and other elements as determined by federal officials. Trump has expressed concerns that the US's reliance on imports and vulnerabilities in its supply chain could potentially compromise national security, defense readiness, price stability, and economic stability. At present, the United States has limited domestic production of key minerals such as lithium, nickel, and cobalt.
Wary of Trump's Tariffs, Fed Waits for Additional Data Before Changing Interest Rates
US Federal Reserve Chairman Jerome Powell has stated that the central bank will adopt a cautious approach and wait for more clarity regarding the direction of the economy before considering any changes to interest rates. In addition, Powell issued a note of caution regarding the potential ramifications of President Donald Trump's tariff policies. These policies, as he saw it, could result in an uptick in inflation and a deterioration in labour conditions, thereby deviating from the Federal Reserve's primary objectives. He further explained that these tariff policies have the potential to create inflationary pressures while weakening economic growth and the labour market. Powell has stated that the Trump administration's trade policy represents a substantial shift, and that this has not provided businesses and economists with the desired level of certainty. Consequently, Powell believes that the Fed may move away from its goals for the remainder of the year and not make progress towards stabilising inflation at 2% and achieving maximum employment.
Trade War Heats Up, China Faces Import Tariffs of up to 245% from the US
The US government has implemented import tariffs on China, with the highest tariffs reaching up to 245%. This is in response to China's retaliatory measures in the escalating trade conflict between the two largest economies in the world. President Donald Trump's executive order to investigate potential national security risks from the US' reliance on imports of critical minerals and their derivatives accompanies these tariffs. The Chinese Foreign Ministry spokesperson, Lin Jian, stated that the US side is responsible for providing specific tariff details. President Trump had previously imposed a general tariff of 10% on all countries, but delayed the implementation of additional, tailored tariffs to allow for further negotiations. However, China is not exempt from the new tariffs, which are accompanied by other retaliatory measures from Beijing. The Trump administration has also issued warnings to other countries against imposing tariffs on imported goods.