Global News Summary 7–12 April 2025

United States

Trade & Policy

• President Donald Trump raised tariffs on China to 145%; in response, China imposed 125% tariffs on US goods (from 84%).

• Trump implemented a 90-day pause on additional tariffs for countries willing to negotiate, though China was excluded.

• The administration defended its strategy as a “necessary transition,” despite broad market criticism and global retaliation.

Inflation & Growth

• March CPI fell to 2.4% YoY, below expectations—largely before tariffs took full effect.

• Fed officials, including Governor Kugler and Chair Powell, signalled a wait-and-see approach, wary of stagflation and recession risks.

Markets & Debt

• Wild swings:

  • S&P 500 surged 9.5% on April 9, its best day since 2020, but ended the week with only a 1.8% gain.

  • 10-year Treasury yields rose to 4.47%, up 50bps on the week, questioning Treasuries' haven status.

  • Over $5 trillion in equity value was wiped out at one point during the week.

  • VIX spiked to COVID-era levels, showing extreme volatility.

China

Trade Response

• On April 12, China officially implemented 125% tariffs on US goods, the highest retaliatory measure yet.

• Officials said no further tariffs would follow, framing it as a strategic cap.

• China restricted outbound investment into the US and signalled possible monetary easing in April.

Inflation & Stimulus

• CPI declined by 0.1% YoY in March, revealing deepening deflationary pressure.

• The government convened a top-level meeting to coordinate stimulus on housing, consumption, and tech innovation.

United Kingdom

Tariff Impacts

• The UK faced a 10% tariff on all exports and a 25% levy on cars. PM Starmer is pushing for reductions, especially on auto exports.

• Despite fiscal pressure, Starmer ruled out tax hikes and vowed to protect household budgets.

Monetary Outlook

• BoE’s Breeden warned of a “chilling effect” on growth and trade but said inflationary consequences were still unfolding.

• March inflation eased to 2.8%, strengthening the case for a May rate cut.

European Union

Trade Measures

• The EU paused €21bn in retaliation tariffs for 90 days to pursue a negotiated solution.

• Still, officials prepared a second-tier countermeasure plan, including possible digital services taxes.

ECB Position

• ECB officials, including Villeroy de Galhau and Escriva, said Trump's tariffs represent a “significant negative shock”.

• Markets priced in a 90% chance of a 25bp cut at the ECB’s April 17 meeting.

German Coalition

• Friedrich Merz formed a new coalition, focusing on reasserting German competitiveness amid tariff and

• security spending shocks.

Japan

Tariff Impact

• Japan was excluded from the 90-day tariff pause but has begun high-level talks with Washington.

• PM Ishiba warned tariffs risk damaging US-Japan investment flows.

Economic Signals

• PPI rose 4.2% YoY, with food inflation leading gains.

• Wage growth hit 3.1%, aiding the case for further gradual BoJ hikes.

Canada

Retaliation

• Canada responded with 25% tariffs on US vehicles after the US levied auto tariffs on all foreign imports.

• PM Carney reiterated the need to reshape trade alliances beyond the US.

Australia

Consumer & Central Bank

• Consumer sentiment slumped 6% to 90.1, one of the worst readings since COVID.

• Economists expect the RBA to cut 50bps in May to counteract external shocks and slowing household spending.

Artificial Intelligence (AI)

• Microsoft launched a new assistant that remembers user preferences and can act autonomously.

• Alibaba is set to release Qwen 3, with multimodal capabilities.

• The UK debated AI copyright regulation, as artists oppose opt-out-based training regimes.

• OpenAI closed a $40bn funding round, reaching a $300bn valuation.

• Replit is reportedly seeking to triple its valuation to $3bn in its next round.

Environmental, Social & Governance (ESG)

• China issued RMB-denominated green bonds in London, boosting cross-border ESG cooperation.

• EU ministers floated ESG-linked trade rules as part of future retaliatory frameworks against the US.

Recession Watch

• BlackRock’s Larry Fink warned a “real downturn is developing” in US corporate and consumption sectors.

• JPMorgan downgraded US 2025 GDP forecast to –0.3% from +1.3%.

• Markets are pricing in 4 Fed rate cuts in 2025, up from 2 before the tariff escalation.