In a significant development impacting international business, U.S. President Donald Trump announced a delay in imposing new 50% tariffs on European Union imports, extending the deadline to July 9. This decision has been welcomed by global markets, leading to a rally in U.S. stock futures and European markets. Investors are hopeful that this pause will provide an opportunity for the U.S. and EU to negotiate a trade deal, potentially averting a larger trade conflict.
In response to these developments, the International Monetary Fund (IMF) has slightly raised the UK's 2025 growth forecast from 1.1% to 1.2%, citing strong first-quarter performance. However, the IMF warns that ongoing global trade tensions, particularly U.S. tariff threats, pose downside risks to the UK's economic outlook.
Despite the positive market reactions, the IMF cautions that President Trump's trade policies, including persistent tariffs on the UK, are expected to decrease the UK’s economic output by 0.3% by 2026. The IMF advises the UK to maintain fiscal prudence while being flexible with tax policies and monetary easing.
Meanwhile, the African Development Bank has lowered Africa’s 2025 growth forecast to 3.9%, citing ongoing trade uncertainties.
In the corporate sector, Tesla’s European sales have dropped significantly, attributed to shifting models and waning brand favorability.
These developments underscore the interconnectedness of global economies and the significant impact of trade policies on market performance and economic forecasts.