Global News Summary 14–19 April 2025

United States

• Tariffs & Trade War Escalation:
  President Trump signalled tariffs may soon apply to smartphones and electronics from China, reversing earlier exemptions. New national security probes launched into chips and pharmaceuticals could result in further tariffs, escalating tensions.

  • Tariffs on Chinese imports have risen to 145%.

  • Trump also threatened critical mineral tariffs, hinting at new trade fronts.

• Market Response & Fed Commentary:
  Markets remained volatile. U.S. Treasury yields fluctuated, with growing concern over the $29 trillion sovereign debt market.

  • Fed’s Christopher Waller suggested that steep rate cuts may be necessary if Trump follows through with full tariff measures.

  • Fed's Susan Collins said the central bank is prepared to intervene if financial strains worsen.

  • Inflation cooled more than expected to 2.4% in March, reinforcing market bets on future Fed easing.

• Currency Outlook:
  The U.S. dollar index dropped for five straight days, hitting a six-month low by 15 April, as 61% of global fund managers expected dollar depreciation over the next 12 months.

United Kingdom

• Trade & Tariff Strategy:
  In response to U.S. tariffs, the UK suspended levies on 89 products (including pasta, plastics, and plywood) and increased export loan facilities to support British businesses.

• Labour Market & Inflation:

  • Employment fell by 8,000 between January and February, with preliminary March figures indicating a larger decline of 78,000.

  • Wage growth remained resilient, but the Bank of England’s Breeden warned of a “chilling effect” from global trade uncertainty.

• Consumer Behaviour:
  About two-thirds of UK consumers indicated a preference to “buy British” amid fears of imported goods rising in price due to Trump’s tariffs.

European Union

• Trade Diplomacy:

  • The EU suspended retaliation on €21 billion of U.S. imports for 90 days, hoping to secure a trade agreement.

  • Officials are optimistic after Trump paused further tariffs but stressed that countermeasures would resume if negotiations fail.

• Debt & Reform Pressures:

  • French PM Bayrou warned of fiscal discipline challenges, urging reforms despite domestic political risks.

  • Germany’s Merz formed a coalition government, pledging a reset of German policy during a time of “global turbulence.”

• ECB Tone Shift:

  • ECB’s Villeroy de Galhau and Escriva warned Trump’s tariffs are triggering a “very significant negative shock” to economic activity.

  • The Euro remained steady at $1.1375, as rate cut expectations solidify.

Japan

• Inflation & Economic Impact:

  • Producer Price Index (PPI) rose 4.2% YoY in March, led by a 92.1% rise in rice prices, the highest since 1971.

  • These inflation dynamics support a gradual BoJ rate-hike path, though some policymakers are cautious due to global trade uncertainty.

• Trade Talks with U.S.:

  • “Constructive” tariff discussions helped the Nikkei 225 gain 1%.

  • Japan formed a taskforce to manage the fallout from U.S. tariffs and pressed for currency stability and fair trade terms.

China

• Tariff Response & Strategy:

  • China retaliated with a total 84% tariff on U.S. goods and signalled readiness to raise them further.

  • Beijing imposed investment curbs on domestic firms investing in the U.S. and warned against “unilateral bullying.”

• Monetary & Fiscal Policy:

  • The People’s Bank of China indicated plans to cut the reserve requirement ratio and interest rates to stabilise credit and consumption.

  • CPI fell 0.1% YoY in March, fuelling expectations of further stimulus.

• Geopolitical Outreach:

  • President Xi Jinping travelled to Southeast Asia to strengthen regional ties and counterbalance U.S. economic pressure.

Australia

• Fiscal & Housing Policy:
  Both parties launched their 2025 election campaigns, promising tax-deductible mortgage payments and billions in housing support for first-time buyers.

• RBA Outlook:

  • RBA minutes indicated caution ahead of rate cuts, calling May an “opportune time” to revisit policy.

  • Some economists expect a 50bps cut, citing deteriorating global sentiment and a 6% drop in household confidence.

ARTIFICIAL INTELLIGENCE

• Nvidia projected a $5.5 billion loss due to U.S. export restrictions on AI chips to China, with new licence requirements for tailored H20 chips.

• TSMC posted +42% revenue growth YoY, driven by AI server demand and stockpiling ahead of tariffs.

• Apple will begin on-device data analysis to boost AI while protecting user privacy.

• Anthropic nears launch of a voice assistant for Claude AI.

• Microsoft released a memory-enhanced AI assistant to automate personal tasks.

ECONOMIC THEMES

Growth

• BlackRock CEO Larry Fink warned that “real weakness” is emerging in the U.S. economy due to tariff-driven consumption slowdown.

• Goldman Sachs and others downgraded U.S. GDP forecasts, citing a “transition recession risk.”

Jobs

• UK: Job losses totalled over 86,000 across Jan–Mar.

• US: Job growth remains muted; labour supply vulnerable to trade friction and capital outflows.

Debt & Sovereign Bonds

• U.S. Treasuries saw extreme volatility amid haven doubts.

• 30Y yields rose over 45bps in a single week, reflecting market fragility.

• Japan ruled out new budgets despite rising inflation and investor expectations.

Inflation

• US: CPI eased to 2.4%, but tariff-driven price pressures may re-emerge.

• EU: Inflation dynamics diverging, but concerns grow over imported inflation from U.S. tariffs.

• Japan: Persistent inflation from staples like rice (+92%) complicates BoJ path.

• Canada: CPI slowed to 2.3%, but outlook clouded by trade uncertainty.

Recession Watch

• Equity analysts, including BofA and Leuthold, warned that U.S. markets are “pricing in a policy-driven recession.”

• Fed still seen as cornered: unable to stimulate without inflaming inflation.