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A leading US vehicle suppliers’ group has sounded the alarm over China’s export restrictions on rare earth elements, warning that the curbs could soon disrupt auto parts production across the country.&nbsp;&nbsp;The group, known as MEMA, the Vehicle Suppliers Association,&nbsp;has called for “immediate and decisive action” from the US government, stressing that the industry is already facing “serious, real-time risks” to its supply chains, according to a statement quoted by Reuters.&nbsp;China, which dominates over 90 per cent of the global processing capacity for rare earths, tightened export restrictions in early April, requiring companies to obtain special licences to ship rare earth minerals and magnets abroad.&nbsp;&nbsp;The move followed the escalation of a US-China trade war triggered by President Donald Trump’s sweeping tariffs on Chinese imports, with Beijing now leveraging its grip on critical mineral supply chains in response.<h2>What are rare earths, and why do they matter?</h2>Rare earth elements are a group of 17 chemically similar metals used extensively in high-tech and green technologies. From electric vehicle motors and automatic transmissions to fighter jets, wind turbines, and smartphones, rare earths are vital to modern manufacturing.&nbsp;&nbsp;They are especially critical in the automotive industry, powering components such as alternators, motors, seatbelt systems, sensors, and cameras.Exporters in China must now submit lengthy applications, sometimes hundreds of pages long,&nbsp;to qualify for export licences. As per a Reuters report, China’s rare-earth magnet exports halved in April amid confusion over the new system, paralysing supply chains that had long depended on Beijing’s stability and efficiency.<h2>US suppliers face mounting pressure</h2>In a joint letter sent on 9 May to the Trump administration, MEMA and the Alliance for Automotive Innovation, representing automakers such as General Motors, Toyota, Volkswagen, and Hyundai,&nbsp;warned that the restrictions could bring the auto sector to a standstill.&nbsp;&nbsp;The letter, first reported by Reuters, said suppliers “will be unable to produce critical automotive components” without reliable access to rare earths.&nbsp;The situation has already disrupted operations. Ford, for instance, shut down production of its Explorer SUV at its Chicago plant for a week in May due to a rare-earth shortage. The White House has not yet responded publicly to the growing pressure from the auto industry, as per Reuters.<h2>European auto giants also feel the strain</h2>The ripple effects are now being felt across Europe. On 4 June, a Reuters report revealed that some auto parts factories in Europe have temporarily suspended output.&nbsp;&nbsp;Mercedes-Benz said it is in discussions with suppliers to build up stockpiles of rare earths, though it has not yet experienced a shortage. BMW confirmed that parts of its supplier network have been affected, even as its own production lines continue operating normally, according to a Reuters report.&nbsp;Europe’s main automotive supplier body, CLEPA, reported that several production lines had already shut down due to depleted inventories. Of the hundreds of export licence requests submitted by European suppliers since April, only around 25 per cent have been approved, with many reportedly rejected on “highly procedural grounds”, according to CLEPA.&nbsp;EU officials are now scrambling for alternatives. European Commissioner for Industrial Strategy, Stephane Séjourné, said the situation has “increased our will to diversify”, as Brussels identified 13 new mining and processing projects outside China. EU Trade Commissioner Maroš Šefčovič also announced discussions with his Chinese counterpart to clarify the licensing situation, as per Reuters.<h2>China’s dominance and strategic retaliation</h2>According to the US Geological Survey, China accounts for more than 70 per cent of rare earth mine production and over 90 per cent of global rare earth processing capacity. This strategic dominance gives Beijing a powerful lever in any trade negotiation.&nbsp;&nbsp;The current restrictions are part of a broader retaliatory package China introduced in response to President Trump’s tariffs,&nbsp;which, at their peak in April, reached up to 145 per cent on selected Chinese imports.&nbsp;While the two countries reached a temporary truce in May and agreed to roll back some of the tariffs, rare earth restrictions were not lifted. In a social media post quoted by Reuters last Friday, Trump accused China of violating the terms of the truce. “China is not keeping its word,” Trump said, adding that President Xi Jinping remains “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH”.&nbsp;Talks between the two leaders are expected to take place later this week, with rare earth exports likely to top the agenda.<h2>Industry scrambling for alternatives</h2>Global carmakers and suppliers are now exploring alternative sources and technologies. General Motors, BMW, ZF, and BorgWarner have all begun developing motors that use fewer or no rare earth elements. BMW, for instance, has deployed magnet-free electric motors in its latest EV lineup, although it still requires rare earths for other smaller systems.&nbsp;However, the shift away from China-dominated supply chains is complex and expensive. According to Wolfgang Weber, CEO of Germany’s electrical and digital industry association ZVEI, many companies only have enough rare earth stockpiles to last “a few weeks or months.” In an emailed statement to Reuters, Weber said companies feel “abandoned by politicians” and are resorting to independent negotiations in China to secure permits.&nbsp;Swedish company Autoliv, the world’s largest manufacturer of airbags and seatbelts, said it has not yet been affected but has formed an internal task force to assess the risk and prepare contingency plans, as quoted by Reuters.<h2>The road ahead</h2>The ongoing export curbs are having a chilling effect on global manufacturing just as automakers are investing heavily in electrification. Rare earths are a linchpin of that green transition and China’s grip on the supply chain underscores the geopolitical complexity of that ambition.&nbsp;While industry players lobby governments for fast-tracked alternatives and stockpiling strategies, the outcome of Trump and Xi’s expected talks could shape the next chapter of this high-stakes trade dispute. Until then, both American and European industries remain on edge, bracing for further supply disruptions as China flexes its mineral muscle.&nbsp;

China, which controls 90% of the global processing capacity for rare earths, has tightened export restrictions following US-China trade war.

A leading US vehicle suppliers’ group has sounded the alarm over China’s export restrictions on rare earth elements, warning that the curbs could soon disrupt auto parts production across the country. The group, known as MEMA, the Vehicle Suppliers Association, has called for “immediate and decisive action” from the US government, stressing that the industry is already facing “serious, real-time risks” to its supply chains, according to a statement quoted by Reuters. China, which dominates over 90 per cent of the global processing capacity for rare earths, tightened export restrictions in early April, requiring companies to obtain special licences to ship rare earth minerals and magnets abroad. The move followed the escalation of a US-China trade war triggered by President Donald Trump’s sweeping tariffs on Chinese imports, with Beijing now leveraging its grip on critical mineral supply chains in response. What are rare earths, and why do they matter? Rare earth elements are a group of 17 chemically similar metals used extensively in high-tech and green technologies. From electric vehicle motors and automatic transmissions to fighter jets, wind turbines, and smartphones, rare earths are vital to modern manufacturing. They are especially critical in the automotive industry, powering components such as alternators, motors, seatbelt systems, sensors, and cameras. Exporters in China must now submit lengthy applications, sometimes hundreds of pages long, to qualify for export licences. As per a Reuters report, China’s rare-earth magnet exports halved in April amid confusion over the new system, paralysing supply chains that had long depended on Beijing’s stability and efficiency. US suppliers face mounting pressure In a joint letter sent on 9 May to the Trump administration, MEMA and the Alliance for Automotive Innovation, representing automakers such as General Motors, Toyota, Volkswagen, and Hyundai, warned that the restrictions could bring the auto sector to a standstill. The letter, first reported by Reuters, said suppliers “will be unable to produce critical automotive components” without reliable access to rare earths. The situation has already disrupted operations. Ford, for instance, shut down production of its Explorer SUV at its Chicago plant for a week in May due to a rare-earth shortage. The White House has not yet responded publicly to the growing pressure from the auto industry, as per Reuters. European auto giants also feel the strain The ripple effects are now being felt across Europe. On 4 June, a Reuters report revealed that some auto parts factories in Europe have temporarily suspended output. Mercedes-Benz said it is in discussions with suppliers to build up stockpiles of rare earths, though it has not yet experienced a shortage. BMW confirmed that parts of its supplier network have been affected, even as its own production lines continue operating normally, according to a Reuters report. Europe’s main automotive supplier body, CLEPA, reported that several production lines had already shut down due to depleted inventories. Of the hundreds of export licence requests submitted by European suppliers since April, only around 25 per cent have been approved, with many reportedly rejected on “highly procedural grounds”, according to CLEPA. EU officials are now scrambling for alternatives. European Commissioner for Industrial Strategy, Stephane Séjourné, said the situation has “increased our will to diversify”, as Brussels identified 13 new mining and processing projects outside China. EU Trade Commissioner Maroš Šefčovič also announced discussions with his Chinese counterpart to clarify the licensing situation, as per Reuters. China’s dominance and strategic retaliation According to the US Geological Survey, China accounts for more than 70 per cent of rare earth mine production and over 90 per cent of global rare earth processing capacity. This strategic dominance gives Beijing a powerful lever in any trade negotiation. The current restrictions are part of a broader retaliatory package China introduced in response to President Trump’s tariffs, which, at their peak in April, reached up to 145 per cent on selected Chinese imports. While the two countries reached a temporary truce in May and agreed to roll back some of the tariffs, rare earth restrictions were not lifted. In a social media post quoted by Reuters last Friday, Trump accused China of violating the terms of the truce. “China is not keeping its word,” Trump said, adding that President Xi Jinping remains “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH”. Talks between the two leaders are expected to take place later this week, with rare earth exports likely to top the agenda. Industry scrambling for alternatives Global carmakers and suppliers are now exploring alternative sources and technologies. General Motors, BMW, ZF, and BorgWarner have all begun developing motors that use fewer or no rare earth elements. BMW, for instance, has deployed magnet-free electric motors in its latest EV lineup, although it still requires rare earths for other smaller systems. However, the shift away from China-dominated supply chains is complex and expensive. According to Wolfgang Weber, CEO of Germany’s electrical and digital industry association ZVEI, many companies only have enough rare earth stockpiles to last “a few weeks or months.” In an emailed statement to Reuters, Weber said companies feel “abandoned by politicians” and are resorting to independent negotiations in China to secure permits. Swedish company Autoliv, the world’s largest manufacturer of airbags and seatbelts, said it has not yet been affected but has formed an internal task force to assess the risk and prepare contingency plans, as quoted by Reuters. The road ahead The ongoing export curbs are having a chilling effect on global manufacturing just as automakers are investing heavily in electrification. Rare earths are a linchpin of that green transition and China’s grip on the supply chain underscores the geopolitical complexity of that ambition. While industry players lobby governments for fast-tracked alternatives and stockpiling strategies, the outcome of Trump and Xi’s expected talks could shape the next chapter of this high-stakes trade dispute. Until then, both American and European industries remain on edge, bracing for further supply disruptions as China flexes its mineral muscle.

US vehicle suppliers' group, MEMA, has called for immediate action from the US government over China's export restrictions on rare earth elements, citing potential disruption to auto parts production.&nbsp;

China tightens rare earth exports, US auto suppliers sound alarm: What’s at stake?

Reddit has filed a lawsuit against artificial intelligence (AI) startup Anthropic, accusing it of scraping and using millions of Reddit user comments to train its Claude chatbot without consent or compensation.&nbsp;The lawsuit, filed on June 4 in California Superior Court in San Francisco, marks a new battleground in the growing legal conflicts between content platforms and AI companies over the use of data for AI training.&nbsp;AI systems rely heavily on vast amounts of data for training and operation, and this data allows the AI models to become more efficient. So, to create a more sophisticated model that is capable of handling complex tasks, AI companies are racing to get more and more data to train their systems on.&nbsp;According to Reddit, Anthropic continued to access Reddit’s platform through automated systems despite claiming to have blocked its bots. The lawsuit alleges the AI firm “intentionally trained on the personal data of Reddit users without ever requesting their consent”, in breach of Reddit's publicly accessible content policy and user agreement.&nbsp;Anthropic, which is valued at $61.5 billion and backed by Amazon, rejected Reddit's claims. In a statement, the company said, “We disagree with Reddit’s claims and will defend ourselves vigorously.”&nbsp;<h2>Licensing rules and alleged violations</h2>&nbsp;Reddit claims that Anthropic began accessing Reddit data for model training as early as December 2021. The complaint cites a 2021 research paper co-authored by Anthropic CEO Dario Amodei that highlights the usefulness of Reddit forums, such as those on history, gardening, and relationship advice, as high-quality sources of training data for language models.&nbsp;While AI companies have traditionally relied on public internet content, including Reddit, to train their models, Reddit argues that such use must follow clearly defined rules. The platform introduced a content policy and technical safeguards to limit unauthorised data scraping in recent years. These measures ensure that deleted posts and sensitive user data are not included in any licensing arrangements.&nbsp;Unlike other lawsuits against AI companies that hinge on copyright infringement, Reddit’s suit emphasises a breach of contract and unfair business practices. It accuses Anthropic of disregarding Reddit’s user agreement and misrepresenting its practices while marketing itself as a responsible AI player.&nbsp;<h2>An industry-wide change on cards?</h2>&nbsp;Reddit is seeking damages and an injunction to stop Anthropic from using its data unless it complies with the platform’s terms. The company has also requested a jury trial. “We believe in an open internet. That does not mean open for exploitation,” Ben Lee, Reddit’s Chief Legal Officer, said in an interview.&nbsp;This case is being closely watched as it may set an important precedent. While many AI companies defend data use under the umbrella of “fair use”, Reddit’s case sidesteps copyright law entirely, focusing instead on breach of contract and unfair competition.&nbsp;As regulators, courts, and content owners scrutinise the explosive growth of AI, the outcome of Reddit’s lawsuit could have ripple effects across the industry. It may determine how digital platforms negotiate licensing, protect user data, and interact with AI companies seeking access to large-scale public datasets.&nbsp;For Reddit, the lawsuit is about more than data—it’s about control, compensation, and protecting its communities. For Anthropic, it’s a legal challenge that may shape the future of how AI firms train their most advanced models.&nbsp;<h2>Stock impact and licensing deals</h2>&nbsp;The lawsuit’s filing appears to have reassured investors. Reddit’s shares rose over 6 per cent on June 4 following the news, underscoring investor confidence in the platform’s assertiveness in protecting its content and user data.&nbsp;Reddit, which went public in 2024 and now has a market capitalisation of around $22 billion, has been actively working to monetise its vast repository of user-generated content.&nbsp;In May, Reddit signed a big licensing deal with OpenAI, allowing the ChatGPT maker to access Reddit content under strict terms. A similar agreement exists with Google too. Both deals are structured to ensure user privacy, respect deletion requests, and provide fair compensation to Reddit.&nbsp;“Other giants in the AI space understand and respect Reddit’s rules,” the complaint said, adding that companies like OpenAI and Google only used Reddit content after agreeing to the platform’s licensing conditions.

While AI companies have traditionally relied on public internet content, including Reddit, to train their models, Reddit argues that such use must follow clearly defined rules.

Reddit has filed a lawsuit against artificial intelligence (AI) startup Anthropic, accusing it of scraping and using millions of Reddit user comments to train its Claude chatbot without consent or compensation. The lawsuit, filed on June 4 in California Superior Court in San Francisco, marks a new battleground in the growing legal conflicts between content platforms and AI companies over the use of data for AI training. AI systems rely heavily on vast amounts of data for training and operation, and this data allows the AI models to become more efficient. So, to create a more sophisticated model that is capable of handling complex tasks, AI companies are racing to get more and more data to train their systems on. According to Reddit, Anthropic continued to access Reddit’s platform through automated systems despite claiming to have blocked its bots. The lawsuit alleges the AI firm “intentionally trained on the personal data of Reddit users without ever requesting their consent”, in breach of Reddit's publicly accessible content policy and user agreement. Anthropic, which is valued at $61.5 billion and backed by Amazon, rejected Reddit's claims. In a statement, the company said, “We disagree with Reddit’s claims and will defend ourselves vigorously.” Licensing rules and alleged violations Reddit claims that Anthropic began accessing Reddit data for model training as early as December 2021. The complaint cites a 2021 research paper co-authored by Anthropic CEO Dario Amodei that highlights the usefulness of Reddit forums, such as those on history, gardening, and relationship advice, as high-quality sources of training data for language models. While AI companies have traditionally relied on public internet content, including Reddit, to train their models, Reddit argues that such use must follow clearly defined rules. The platform introduced a content policy and technical safeguards to limit unauthorised data scraping in recent years. These measures ensure that deleted posts and sensitive user data are not included in any licensing arrangements. Unlike other lawsuits against AI companies that hinge on copyright infringement, Reddit’s suit emphasises a breach of contract and unfair business practices. It accuses Anthropic of disregarding Reddit’s user agreement and misrepresenting its practices while marketing itself as a responsible AI player. An industry-wide change on cards? Reddit is seeking damages and an injunction to stop Anthropic from using its data unless it complies with the platform’s terms. The company has also requested a jury trial. “We believe in an open internet. That does not mean open for exploitation,” Ben Lee, Reddit’s Chief Legal Officer, said in an interview. This case is being closely watched as it may set an important precedent. While many AI companies defend data use under the umbrella of “fair use”, Reddit’s case sidesteps copyright law entirely, focusing instead on breach of contract and unfair competition. As regulators, courts, and content owners scrutinise the explosive growth of AI, the outcome of Reddit’s lawsuit could have ripple effects across the industry. It may determine how digital platforms negotiate licensing, protect user data, and interact with AI companies seeking access to large-scale public datasets. For Reddit, the lawsuit is about more than data—it’s about control, compensation, and protecting its communities. For Anthropic, it’s a legal challenge that may shape the future of how AI firms train their most advanced models. Stock impact and licensing deals The lawsuit’s filing appears to have reassured investors. Reddit’s shares rose over 6 per cent on June 4 following the news, underscoring investor confidence in the platform’s assertiveness in protecting its content and user data. Reddit, which went public in 2024 and now has a market capitalisation of around $22 billion, has been actively working to monetise its vast repository of user-generated content. In May, Reddit signed a big licensing deal with OpenAI, allowing the ChatGPT maker to access Reddit content under strict terms. A similar agreement exists with Google too. Both deals are structured to ensure user privacy, respect deletion requests, and provide fair compensation to Reddit. “Other giants in the AI space understand and respect Reddit’s rules,” the complaint said, adding that companies like OpenAI and Google only used Reddit content after agreeing to the platform’s licensing conditions.

While AI companies have traditionally relied on public internet content, including Reddit, to train their models, Reddit argues that such use must follow clearly defined rules.

Reddit’s legal strike on AI startup Anthropic puts AI training practices on trial

The United States economy is losing momentum as new data reveals the growing strain from elevated tariffs and persistent policy uncertainty.&nbsp;&nbsp;According to the Federal Reserve’s latest Beige Book report released on 4 June, economic activity has declined across much of the country, with businesses reporting increased costs, weaker demand, and concerns about the future.<h2>Fed report highlights a cooling economy</h2>The Beige Book, a compilation of anecdotal evidence collected by the US central bank’s 12 regional branches found that only three districts saw growth in recent weeks. In contrast, half reported outright contraction.&nbsp; This is a sharp deterioration from January 2025, when all 12 districts had registered economic expansion. As per Reuters, the Fed’s snapshot, based on data gathered through 23 May, stated: “On balance, the outlook remains slightly pessimistic and uncertain, unchanged relative to the previous report.”&nbsp; The document warned of widespread expectations among business contacts that “costs and prices will rise at a faster rate going forward.” Businesses across sectors are increasingly concerned about the economic landscape, with some pulling back on stockpiling goods due to escalating costs.&nbsp;&nbsp;A florist in New York said they had begun adjusting flower varieties based on “rapidly changing costs by source country”, while others reported difficulty forecasting demand due to trade policy uncertainty, as per Reuters.&nbsp;<h2>Tariffs reshape pricing and consumer choices</h2>According to the San Francisco Fed, companies are now explicitly including separate tariff lines in contracts and quotes.&nbsp;&nbsp;The report noted that price hikes introduced in anticipation of tariffs were not reversed even after some duties were removed. &nbsp;Retailers are witnessing changes in consumer behaviour. The Cleveland Fed said many car dealerships saw a spike in purchases ahead of planned tariffs but expect sales to decline starting in June due to “tariff-related sticker shock.”&nbsp;&nbsp;Meanwhile, discretionary spending has pulled back, with some consumers downgrading to less expensive alternatives.&nbsp;The Boston Fed described sentiment as “a mix of cautious optimism and blunt pessimism.” While some hoped that resolution of trade tensions would unlock growth, others warned that tariff pressures and federal policies may drag demand further.<h2>Employment flat, with regional divergence</h2>The labour market remains broadly stable, but there is variation across regions and industries. The Richmond Fed reported contrasting trends: a Maryland construction firm plans to hire more due to ongoing demand, whereas a fast-casual restaurant chain in the D.C. region has halted hiring amid economic concerns, as per Reuters.&nbsp;&nbsp;Nationwide, employment was reported as “flat” in most districts. This softening contrasts with official data, which still portrays a relatively healthy labour market.&nbsp;&nbsp;For example, April’s Personal Consumption Expenditures (PCE) Price Index rose by just 2.1 per cent, the lowest in four years and marginally above the Fed’s 2 per cent inflation target.<h2>Fed data diverging from business sentiment</h2>While hard economic indicators show resilience, such as solid employment levels, policymakers are increasingly leaning on real-time insights like those captured in the Beige Book.&nbsp; &nbsp;As reported by Reuters, Fed officials are putting a “premium on day-to-day experiences” of businesses and households to make forward-looking decisions.&nbsp;Additional survey-based data echoes the Fed’s findings. According to a report released on the same day by the Institute for Supply Management, the US services sector contracted in May for the first time in a year, with businesses reporting higher costs for inputs.<h2>IMF warns of weaker 2025 outlook, tight fiscal path</h2>The International Monetary Fund has also revised its 2025 outlook for the US. It now forecasts GDP growth of just 1.9 per cent next year, citing a cooling labour market and tightening fiscal policy.&nbsp;&nbsp;As per the IMF’s Article IV consultation, consumption is expected to moderate, and inflation risks persist, particularly in services.&nbsp;The IMF estimates unemployment will rise to 4.2 per cent by next year, from the current level of 4.1 per cent.&nbsp;&nbsp;Despite easing price pressures, the Fund has warned that global disinflation is slowing, especially in key sectors such as housing, food, and transport.<h2>Fed’s policy dilemma: inflation vs recession</h2>The Federal Reserve has kept interest rates steady in the 4.25–4.50 per cent range since December 2024.&nbsp;&nbsp;Policymakers now face a tough balancing act: fighting inflation without stifling growth. &nbsp;Speaking to Bloomberg, Chicago Fed President Austan Goolsbee suggested that if current conditions persist, the Fed may reduce short-term interest rates within the next 12 to 15 months.&nbsp;&nbsp;However, he cautioned that further escalation in tariffs or a spike in core inflation could delay such a move.<h2>Trump intensifies pressure on Powell</h2>President Donald Trump has renewed calls for rate cuts following weak job numbers. According to Bloomberg, only 37,000 private-sector jobs were added in May, the lowest figure since March 2023 and well below forecasts of 110,000.&nbsp; &nbsp;Trump criticised Fed Chair Jerome Powell on Truth Social, citing Europe’s recent rate reductions as a benchmark.&nbsp;Analysts say the disappointing employment figures, coupled with business unease over tariffs, could lead to monetary easing as soon as the Federal Open Market Committee’s next meeting on 17–18 June, as per Reuters.&nbsp;<h2>What lies ahead?</h2>With tariff pressures mounting, policy clarity lacking, and economic activity softening, the Fed’s next steps will be crucial.&nbsp;&nbsp;The Beige Book has laid bare the fragility beneath surface-level indicators. The central bank must now navigate a narrow path between easing inflation and avoiding a recession , all while under political scrutiny and global uncertainty.&nbsp;(With inputs from the agencies) &nbsp;

 Only three of 12 districts experienced growth, causing concerns about the future. Expectations of faster cost and price increases have led some businesses to adjust operations and reduce inventory due to unpredictable trade policies.

The United States economy is losing momentum as new data reveals the growing strain from elevated tariffs and persistent policy uncertainty. According to the Federal Reserve’s latest Beige Book report released on 4 June, economic activity has declined across much of the country, with businesses reporting increased costs, weaker demand, and concerns about the future. Fed report highlights a cooling economy The Beige Book, a compilation of anecdotal evidence collected by the US central bank’s 12 regional branches found that only three districts saw growth in recent weeks. In contrast, half reported outright contraction. This is a sharp deterioration from January 2025, when all 12 districts had registered economic expansion. As per Reuters, the Fed’s snapshot, based on data gathered through 23 May, stated: “On balance, the outlook remains slightly pessimistic and uncertain, unchanged relative to the previous report.” The document warned of widespread expectations among business contacts that “costs and prices will rise at a faster rate going forward.” Businesses across sectors are increasingly concerned about the economic landscape, with some pulling back on stockpiling goods due to escalating costs. A florist in New York said they had begun adjusting flower varieties based on “rapidly changing costs by source country”, while others reported difficulty forecasting demand due to trade policy uncertainty, as per Reuters. Tariffs reshape pricing and consumer choices According to the San Francisco Fed, companies are now explicitly including separate tariff lines in contracts and quotes. The report noted that price hikes introduced in anticipation of tariffs were not reversed even after some duties were removed. Retailers are witnessing changes in consumer behaviour. The Cleveland Fed said many car dealerships saw a spike in purchases ahead of planned tariffs but expect sales to decline starting in June due to “tariff-related sticker shock.” Meanwhile, discretionary spending has pulled back, with some consumers downgrading to less expensive alternatives. The Boston Fed described sentiment as “a mix of cautious optimism and blunt pessimism.” While some hoped that resolution of trade tensions would unlock growth, others warned that tariff pressures and federal policies may drag demand further. Employment flat, with regional divergence The labour market remains broadly stable, but there is variation across regions and industries. The Richmond Fed reported contrasting trends: a Maryland construction firm plans to hire more due to ongoing demand, whereas a fast-casual restaurant chain in the D.C. region has halted hiring amid economic concerns, as per Reuters. Nationwide, employment was reported as “flat” in most districts. This softening contrasts with official data, which still portrays a relatively healthy labour market. For example, April’s Personal Consumption Expenditures (PCE) Price Index rose by just 2.1 per cent, the lowest in four years and marginally above the Fed’s 2 per cent inflation target. Fed data diverging from business sentiment While hard economic indicators show resilience, such as solid employment levels, policymakers are increasingly leaning on real-time insights like those captured in the Beige Book. As reported by Reuters, Fed officials are putting a “premium on day-to-day experiences” of businesses and households to make forward-looking decisions. Additional survey-based data echoes the Fed’s findings. According to a report released on the same day by the Institute for Supply Management, the US services sector contracted in May for the first time in a year, with businesses reporting higher costs for inputs. IMF warns of weaker 2025 outlook, tight fiscal path The International Monetary Fund has also revised its 2025 outlook for the US. It now forecasts GDP growth of just 1.9 per cent next year, citing a cooling labour market and tightening fiscal policy. As per the IMF’s Article IV consultation, consumption is expected to moderate, and inflation risks persist, particularly in services. The IMF estimates unemployment will rise to 4.2 per cent by next year, from the current level of 4.1 per cent. Despite easing price pressures, the Fund has warned that global disinflation is slowing, especially in key sectors such as housing, food, and transport. Fed’s policy dilemma: inflation vs recession The Federal Reserve has kept interest rates steady in the 4.25–4.50 per cent range since December 2024. Policymakers now face a tough balancing act: fighting inflation without stifling growth. Speaking to Bloomberg, Chicago Fed President Austan Goolsbee suggested that if current conditions persist, the Fed may reduce short-term interest rates within the next 12 to 15 months. However, he cautioned that further escalation in tariffs or a spike in core inflation could delay such a move. Trump intensifies pressure on Powell President Donald Trump has renewed calls for rate cuts following weak job numbers. According to Bloomberg, only 37,000 private-sector jobs were added in May, the lowest figure since March 2023 and well below forecasts of 110,000. Trump criticised Fed Chair Jerome Powell on Truth Social, citing Europe’s recent rate reductions as a benchmark. Analysts say the disappointing employment figures, coupled with business unease over tariffs, could lead to monetary easing as soon as the Federal Open Market Committee’s next meeting on 17–18 June, as per Reuters. What lies ahead? With tariff pressures mounting, policy clarity lacking, and economic activity softening, the Fed’s next steps will be crucial. The Beige Book has laid bare the fragility beneath surface-level indicators. The central bank must now navigate a narrow path between easing inflation and avoiding a recession , all while under political scrutiny and global uncertainty. (With inputs from the agencies)

Amid tariff pressure, the &nbsp;Federal Reserve's Beige Book indicates declining economic activity, with businesses citing rising costs and weaker demand.

US economic growth falters as Fed flags tariff burdens and rising uncertainty

As transatlantic tensions rise, European Union Trade Commissioner Maros Sefcovic has offered a cautiously optimistic signal, saying that negotiations with the United States are “advancing in the right direction at pace.” With just over a month left until the proposed 50 per cent US tariffs on European goods take effect, his remarks have emerged as a rare note of progress in what has otherwise been a volatile phase in EU-US trade ties.Sefcovic met US Trade Representative Jamieson Greer on the margins of the OECD Ministerial Council Meeting in Paris.&nbsp;&nbsp;Taking to social media platform X (formerly Twitter), Sefcovic wrote, “Had a productive and constructive discussion with US Trade Representative Ambassador Greer… We’re advancing in the right direction at pace – and staying in close contact to maintain the momentum.”

<blockquote class="twitter-tweet">Had a productive and constructive discussion with <a href="https://twitter.com/USTradeRep?ref_src=twsrc%5Etfw">@USTradeRep</a> Ambassador Greer on the margins of the <a href="https://twitter.com/OECD?ref_src=twsrc%5Etfw">@OECD</a> Trade Ministerial. We&#39;re advancing in the right direction at pace - and staying in close contact to maintain the momentum. <a href="https://t.co/Epmb7kejFZ">pic.twitter.com/Epmb7kejFZ</a>&mdash; Maroš Šefčovič🇪🇺 (@MarosSefcovic) <a href="https://twitter.com/MarosSefcovic/status/1930191214655012894?ref_src=twsrc%5Etfw">June 4, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

His comment comes after a week of dramatic turns in US trade policy, marked by President Donald Trump’s renewed threats of higher tariffs and a last-minute decision to delay their implementation.<h2>Trump delays 50 per cent tariffs after von der Leyen call</h2>According to Reuters, the diplomatic tone between Brussels and Washington shifted significantly after a phone call between Trump and European Commission President Ursula von der Leyen on Sunday.&nbsp;Trump, who had earlier declared that the EU was “stalling” and that talks were “going nowhere,” agreed to extend the deadline for the proposed 50 per cent tariffs to 9 July.&nbsp;Announcing the decision on Truth Social, Trump said: “I agreed to the extension — July 9, 2025 — It was my privilege to do so.” He added that the EU had “called to quickly establish meeting dates,” calling it a “positive event.”&nbsp;As quoted by Bloomberg, Trump said he hoped the EU would “open up the European Nations for Trade with the United States of America,” a line echoing his earlier demands to China during separate tariff negotiations.&nbsp;The extension follows the end of a 90-day tariff pause announced in April, during which Trump’s administration had reduced duties on European imports from 20 per cent to 10 per cent.&nbsp;&nbsp;However, frustration over EU regulations and ongoing lawsuits targeting American tech companies led Trump to threaten a sharp escalation to 50 per cent beginning June.<h2>A framework for compromise?</h2>Behind the scenes, both sides are working to prevent a breakdown. As reported by Bloomberg, the European Commission has submitted a new trade framework to the US, focusing on tariff reductions, regulatory cooperation, and strategic sectors such as semiconductors, electric vehicles, civilian aircraft, and pharmaceuticals.&nbsp;According to sources familiar with the discussions, EU trade chief Maros Sefcovic will lead high-level political talks, while technical negotiators work simultaneously on tariff and non-tariff issues. The proposal also outlines joint initiatives to reinforce supply chain security and foster mutual investment.&nbsp;The EU’s offer last week reportedly included tariff rollbacks, simplified customs procedures, and aligned standards in select sectors. However, as noted by Bloomberg, the US rejected the proposal at the time, prompting Trump’s initial threat of a tariff hike. Officials on both sides now suggest that parts of that proposal are being revisited.&nbsp;Despite the progress, sticking points remain. Some EU member states have warned that any US demand undermining the bloc’s regulatory autonomy,&nbsp;particularly in areas like taxation and antitrust,&nbsp;would be a red line.<h2>Economic impact</h2>The urgency of the negotiations is underscored by the potential economic fallout. As per estimates cited by Bloomberg Economics, a 50 per cent tariff could affect approximately $321 billion in annual goods trade, shave 0.6 per cent off US GDP, and push up consumer prices by more than 0.3 per cent.&nbsp;Markets responded swiftly to the temporary easing of tensions. US equity index futures rose in early Asian trading following Trump’s extension announcement, and the US dollar showed signs of recovery after recent volatility.&nbsp;Still, many within the EU remain sceptical. According to Reuters, internal briefings suggest that Brussels is preparing contingency measures, including counter-tariffs on up to €95 billion worth of US products. These would target politically sensitive sectors such as soybeans, poultry, bourbon, and even Boeing aircraft.<h2>A deal – or a deeper divide?</h2>While talks are ongoing, a final agreement remains uncertain. According to EU diplomats quoted by Bloomberg, there’s still a lack of clarity on what Washington wants, and on who, within the Trump administration, is driving the negotiation line.&nbsp;President Trump, meanwhile, has maintained that he reserves the right to “set a deal” if no agreement is reached, a reference to his authority to impose unilateral trade measures under his “America First” doctrine.&nbsp;Whether this extension leads to a breakthrough or simply delays confrontation remains to be seen. But with just over a month left until the July 9 deadline, both Brussels and Washington are under mounting pressure to turn this fragile momentum into a concrete trade pact. &nbsp;

His comment comes after a week of dramatic turns in US trade policy, marked by President Donald Trump’s renewed threats of higher tariffs and a last-minute decision to delay their implementation.

As transatlantic tensions rise, European Union Trade Commissioner Maros Sefcovic has offered a cautiously optimistic signal, saying that negotiations with the United States are “advancing in the right direction at pace.” With just over a month left until the proposed 50 per cent US tariffs on European goods take effect, his remarks have emerged as a rare note of progress in what has otherwise been a volatile phase in EU-US trade ties. Sefcovic met US Trade Representative Jamieson Greer on the margins of the OECD Ministerial Council Meeting in Paris. Taking to social media platform X (formerly Twitter), Sefcovic wrote, “Had a productive and constructive discussion with US Trade Representative Ambassador Greer… We’re advancing in the right direction at pace – and staying in close contact to maintain the momentum.”

EU Trade Commissioner Maros Sefcovic expressed optimism about US negotiations, noting progress amidst rising tensions and impending tariffs, following a productive meeting with Ambassador Greer.

EU trade chief says US talks ‘advancing in the right direction’ amid looming 50% deadline

The ongoing uncertainty around US President Donald Trump's multi-front global trade war has little bearing on the Indian services sector.That is yet another sign of robust economic momentum for the world's fastest-growing economy.Last month, India's services sector sustained its robust momentum, bolstered by strong international demand and a record uptick in hiring.That is according to the latest HSBC India Services PMI compiled by S&amp;P Global.The index increased to 58.8 in May from April's 58.7, marking the second consecutive monthly rise and indicating a good pace of expansion.The index has now remained above the 50 mark—which separates growth from contraction—for 46 straight months.The survey revealed that service providers across India benefitted from resilient demand conditions, new client acquisitions, and greater staffing capacity.Survey participants cited advertising efforts, repeat orders, and a growing international appetite for Indian services as key drivers of new business growth.<h2>Global indigestion, but Indian exports shine as hiring booms</h2>A standout feature of May's performance was a surge in export orders amidst the uncertainty surrounding Trump's tariff rhetoric.While the argument for front-loading of exports is doing the rounds on social media, the path of least resistance for demand for Indian goods is to the upside.Indeed, the report noted that survey participants reported one of the biggest improvements in international demand in 19-and-a-half years of data collection.Demand from Asia, Europe, and North America significantly increased India's global services footprint.Only in May and June 2024 were faster increases in export orders recorded, highlighting the exceptional momentum seen last month.Service providers continued to recruit additional employees to meet the ongoing expansions in new business intakes. Nearly 16 per cent of surveyed companies reported higher employment levels, while just 1per cent indicated a reduction. This led to the highest job creation rate in the survey's history."Strong international demand continued to fuel services activity, as evidenced by the new export business index's uptick from April," said Pranjul Bhandari, Chief India Economist at HSBC. "To keep up with swelling demand, India's service providers heavily increased staff recruitment."<h2>Rising price pressures emerge</h2>While output growth and hiring accelerated, inflationary concerns also emerged.Companies reported higher input costs, particularly for items such as cooking oil, meat, and raw materials, as well as increased labour expenses due to overtime and recruitment.As a result, input cost and output price inflation edged above historical averages, reaching their highest levels since 2025.Still, despite the early readings of inflationary pressures on the rise, the Reserve Bank of India is widely expected to cut rates again this week after the 3-day meeting on Friday.<h2>Demand turning?</h2>On the demand side, work backlogs rose marginally, indicating easing capacity pressures likely due to the expanded workforce.Business sentiment rebounded in May from a 23-month low in April, buoyed by expectations of continued sales growth, enhanced staffing, and effective marketing initiatives.Meanwhile, the HSBC India Composite PMI Output Index, which combines manufacturing and services, registered a slight dip to 59.3 in May from 59.7 in April.The marginal decline was attributed to a softer rise in manufacturing output, weighed down by geopolitical tensions and cost inflation.Nonetheless, overall activity across India's private sector continued to grow sharply.With services showing resilience even as manufacturing faces headwinds, India's economic expansion remains firmly supported by its dominant services engine.<h2>Robust economic data, but the rupee needs RBI's protective hand</h2>With the RBI set to cut rates again this week, the Indian currency has taken a slight hit.The dollar's temporary recovery also weighs on the domestic currency apart from foreign stock outflows.Still, the RBI has the capacity to intervene, as it has done over the last few years, to stabilize extreme currency movements.Amit Pabari, Managing Director of CR Forex in Mumbai, said the central bank's massive forex war chest allows it to protect the currency from wild gyrations."RBI remains well-positioned to step in, with a comfortable reserve buffer of $693 billion, limiting the scope for any sharp rupee depreciation," said Pabari.He added, "Additionally, robust domestic bond issuances support the rupee. These inflows continue to provide much-needed support to the rupee."

The services PMI increased to 58.8 in May from April's 58.7, marking the second consecutive monthly rise and indicating a good pace of expansion.

The ongoing uncertainty around US President Donald Trump's multi-front global trade war has little bearing on the Indian services sector. That is yet another sign of robust economic momentum for the world's fastest-growing economy. Last month, India's services sector sustained its robust momentum, bolstered by strong international demand and a record uptick in hiring. That is according to the latest HSBC India Services PMI compiled by S&P Global. The index increased to 58.8 in May from April's 58.7, marking the second consecutive monthly rise and indicating a good pace of expansion. The index has now remained above the 50 mark—which separates growth from contraction—for 46 straight months. The survey revealed that service providers across India benefitted from resilient demand conditions, new client acquisitions, and greater staffing capacity. Survey participants cited advertising efforts, repeat orders, and a growing international appetite for Indian services as key drivers of new business growth. Global indigestion, but Indian exports shine as hiring booms A standout feature of May's performance was a surge in export orders amidst the uncertainty surrounding Trump's tariff rhetoric. While the argument for front-loading of exports is doing the rounds on social media, the path of least resistance for demand for Indian goods is to the upside. Indeed, the report noted that survey participants reported one of the biggest improvements in international demand in 19-and-a-half years of data collection. Demand from Asia, Europe, and North America significantly increased India's global services footprint. Only in May and June 2024 were faster increases in export orders recorded, highlighting the exceptional momentum seen last month. Service providers continued to recruit additional employees to meet the ongoing expansions in new business intakes. Nearly 16 per cent of surveyed companies reported higher employment levels, while just 1per cent indicated a reduction. This led to the highest job creation rate in the survey's history. "Strong international demand continued to fuel services activity, as evidenced by the new export business index's uptick from April," said Pranjul Bhandari, Chief India Economist at HSBC. "To keep up with swelling demand, India's service providers heavily increased staff recruitment." Rising price pressures emerge While output growth and hiring accelerated, inflationary concerns also emerged. Companies reported higher input costs, particularly for items such as cooking oil, meat, and raw materials, as well as increased labour expenses due to overtime and recruitment. As a result, input cost and output price inflation edged above historical averages, reaching their highest levels since 2025. Still, despite the early readings of inflationary pressures on the rise, the Reserve Bank of India is widely expected to cut rates again this week after the 3-day meeting on Friday. Demand turning? On the demand side, work backlogs rose marginally, indicating easing capacity pressures likely due to the expanded workforce. Business sentiment rebounded in May from a 23-month low in April, buoyed by expectations of continued sales growth, enhanced staffing, and effective marketing initiatives. Meanwhile, the HSBC India Composite PMI Output Index, which combines manufacturing and services, registered a slight dip to 59.3 in May from 59.7 in April. The marginal decline was attributed to a softer rise in manufacturing output, weighed down by geopolitical tensions and cost inflation. Nonetheless, overall activity across India's private sector continued to grow sharply. With services showing resilience even as manufacturing faces headwinds, India's economic expansion remains firmly supported by its dominant services engine. Robust economic data, but the rupee needs RBI's protective hand With the RBI set to cut rates again this week, the Indian currency has taken a slight hit. The dollar's temporary recovery also weighs on the domestic currency apart from foreign stock outflows. Still, the RBI has the capacity to intervene, as it has done over the last few years, to stabilize extreme currency movements. Amit Pabari, Managing Director of CR Forex in Mumbai, said the central bank's massive forex war chest allows it to protect the currency from wild gyrations. "RBI remains well-positioned to step in, with a comfortable reserve buffer of $693 billion, limiting the scope for any sharp rupee depreciation," said Pabari. He added, "Additionally, robust domestic bond issuances support the rupee. These inflows continue to provide much-needed support to the rupee."

The services PMI increased to 58.8 in May from April's 58.7, marking the second consecutive monthly rise and indicating a good pace of expansion.

What tariff troubles? Export boom keeps India's services sector momentum steady in May

India has renewed calls to reform global trade rules, urging the World Trade Organization (WTO) to address non-tariff barriers (NTBs), discipline non-market economies, and restore its paralysed dispute resolution system.&nbsp;The appeal came as Commerce and Industry Minister Piyush Goyal represented India at an informal WTO mini-ministerial in Paris this week, hosted by Australia on the sidelines of the OECD Ministerial Council Meeting. It comes amid escalating trade tensions with the United States over its recent 26 per cent tariff on Indian goods.<h2>India’s message at the WTO</h2>As quoted by PTI, Goyal told the gathering that the WTO must act against distortions caused by non-market economies and eliminate NTBs that restrict access for developing nations. He also reiterated India’s call to revive the WTO’s appellate body, which has remained non-functional since 2009 due to the US blocking appointments.&nbsp;He emphasised the importance of retaining special and differential treatment for developing countries and said the organisation must uphold commitments made in previous ministerial conferences.&nbsp;The meeting, held behind closed doors, was attended by ministers from around 25 WTO member nations, including Australia, Singapore, Nigeria and France, as well as WTO Director-General Ngozi Okonjo-Iweala.<h2>India responds to US tariffs</h2>India’s remarks come against the backdrop of recent tariff action by Washington. In April 2025, the US imposed a 26 per cent tariff on a wide range of Indian exports, citing national security and alleged unfair trade practices — a move that drew criticism from New Delhi.&nbsp;According to ANI, India responded by lodging a formal protest with the Office of the United States Trade Representative and initiating consultations under WTO provisions. Officials also warned of reciprocal measures if the duties were not withdrawn.&nbsp;On 9 May, India submitted a note to the WTO characterising the US tariffs as “safeguard measures” and stated that they affect Indian exports worth $7.6 billion, with around $1.91 billion collected in duties. India proposed equivalent retaliatory tariffs, although it did not specify the products concerned.&nbsp;As per Reuters, the United States dismissed India’s claims in its response on 23 May, stating that the Section 232 tariffs were imposed on national security grounds and arguing that India did not follow the procedural requirements for such a challenge.<h2>India–US trade talks continue despite tensions</h2>Despite friction, both sides remain engaged in trade talks. As reported by PTI, Goyal said India and the US are committed to resolving differences and are working towards a comprehensive bilateral trade agreement.&nbsp;The deal aims to settle long-standing tariff disputes, improve market access for Indian pharmaceuticals, textiles and services, and increase bilateral trade. The US is India’s largest trading partner, while India is the US’s tenth-largest.&nbsp;US Commerce Secretary Howard Lutnick expressed optimism during the US-India Strategic Partnership Forum’s summit on 2 June. As quoted by ANI, he said that negotiators have “found a place that really works for both countries” and added that a deal could come “in the not-too-distant future”.&nbsp;He noted that India could gain by concluding an early agreement. “Earlier countries get a better deal — that’s the way it is,” he said, referencing the 90-day reciprocal tariff pause that is set to expire in July.<h2>OECD cuts global growth forecast, warns of tariff risks</h2>The Organisation for Economic Co-operation and Development (OECD), in its latest Economic Outlook released on 3 June, downgraded its global growth forecast due to heightened trade tensions.&nbsp;According to Reuters, the OECD now projects the global economy will expand by just 2.9 per cent in both 2025 and 2026, compared to its previous forecast of 3.1 per cent and 3.0 per cent, respectively. It warned that increased protectionism could fuel inflation and depress investment.&nbsp;The report offered a relatively optimistic forecast for India. It projected that the Indian economy will grow by 6.3 per cent in FY2026 and 6.4 per cent in FY2027. The OECD said benign inflation, tax cuts, a stronger labour market and increased public investment are expected to support consumption and capital formation. However, it cautioned that US tariffs would likely impact Indian export competitiveness.

It comes amid escalating trade tensions with the United States over its recent 26 per cent tariff on Indian goods.

India has renewed calls to reform global trade rules, urging the World Trade Organization (WTO) to address non-tariff barriers (NTBs), discipline non-market economies, and restore its paralysed dispute resolution system. The appeal came as Commerce and Industry Minister Piyush Goyal represented India at an informal WTO mini-ministerial in Paris this week, hosted by Australia on the sidelines of the OECD Ministerial Council Meeting. It comes amid escalating trade tensions with the United States over its recent 26 per cent tariff on Indian goods. India’s message at the WTO As quoted by PTI, Goyal told the gathering that the WTO must act against distortions caused by non-market economies and eliminate NTBs that restrict access for developing nations. He also reiterated India’s call to revive the WTO’s appellate body, which has remained non-functional since 2009 due to the US blocking appointments. He emphasised the importance of retaining special and differential treatment for developing countries and said the organisation must uphold commitments made in previous ministerial conferences. The meeting, held behind closed doors, was attended by ministers from around 25 WTO member nations, including Australia, Singapore, Nigeria and France, as well as WTO Director-General Ngozi Okonjo-Iweala. India responds to US tariffs India’s remarks come against the backdrop of recent tariff action by Washington. In April 2025, the US imposed a 26 per cent tariff on a wide range of Indian exports, citing national security and alleged unfair trade practices — a move that drew criticism from New Delhi. According to ANI, India responded by lodging a formal protest with the Office of the United States Trade Representative and initiating consultations under WTO provisions. Officials also warned of reciprocal measures if the duties were not withdrawn. On 9 May, India submitted a note to the WTO characterising the US tariffs as “safeguard measures” and stated that they affect Indian exports worth $7.6 billion, with around $1.91 billion collected in duties. India proposed equivalent retaliatory tariffs, although it did not specify the products concerned. As per Reuters, the United States dismissed India’s claims in its response on 23 May, stating that the Section 232 tariffs were imposed on national security grounds and arguing that India did not follow the procedural requirements for such a challenge. India–US trade talks continue despite tensions Despite friction, both sides remain engaged in trade talks. As reported by PTI, Goyal said India and the US are committed to resolving differences and are working towards a comprehensive bilateral trade agreement. The deal aims to settle long-standing tariff disputes, improve market access for Indian pharmaceuticals, textiles and services, and increase bilateral trade. The US is India’s largest trading partner, while India is the US’s tenth-largest. US Commerce Secretary Howard Lutnick expressed optimism during the US-India Strategic Partnership Forum’s summit on 2 June. As quoted by ANI, he said that negotiators have “found a place that really works for both countries” and added that a deal could come “in the not-too-distant future”. He noted that India could gain by concluding an early agreement. “Earlier countries get a better deal — that’s the way it is,” he said, referencing the 90-day reciprocal tariff pause that is set to expire in July. OECD cuts global growth forecast, warns of tariff risks The Organisation for Economic Co-operation and Development (OECD), in its latest Economic Outlook released on 3 June, downgraded its global growth forecast due to heightened trade tensions. According to Reuters, the OECD now projects the global economy will expand by just 2.9 per cent in both 2025 and 2026, compared to its previous forecast of 3.1 per cent and 3.0 per cent, respectively. It warned that increased protectionism could fuel inflation and depress investment. The report offered a relatively optimistic forecast for India. It projected that the Indian economy will grow by 6.3 per cent in FY2026 and 6.4 per cent in FY2027. The OECD said benign inflation, tax cuts, a stronger labour market and increased public investment are expected to support consumption and capital formation. However, it cautioned that US tariffs would likely impact Indian export competitiveness.

India urged WTO reform, focusing on addressing non-tariff barriers, regulating non-market economies, and restoring the dispute resolution system, emphasized by Minister Piyush Goyal at a mini-ministerial in Paris.

India urges WTO to act on trade barriers amid tariff dispute with the US

In a landmark shift for India’s clean energy transition, solar-plus-storage (S+S) projects are now capable of delivering 24/7 electricity at record-low costs—posing a formidable economic challenge to new coal-fired power.&nbsp;According to a new report from the India Energy and Climate Center (IECC) at UC Berkeley, recent auction results show that the ‘flat block’ power problem—power availability continuously through the day and night—can now be supplied for less than ₹6 per kilowatt-hour (kWh).&nbsp;Over the past few years, the cost of solar photovoltaic (PV) modules and lithium-ion batteries has plummeted. Solar module prices have dropped below ₹9/W ($0.10/W), while battery pack costs are now as low as $60/kWh for Indian developers—levels comparable to those in China. Coupled with improved performance, including battery life cycles exceeding 10,000 uses, these reductions have sharply lowered the Levelised Cost of Storage (LCOS).&nbsp;Recent auctions reflect this trend vividly. In April 2025, a standalone battery energy storage system (BESS) was awarded at ₹2.8 lakh/MW/month (about $3,256) without subsidies.&nbsp;Meanwhile, solar-plus-storage bids with 2–4 hours of storage duration fetched between ₹3.1 and ₹3.5/kWh (about $0.03). These figures represent a 50–60 per cent drop from just 18 months ago.&nbsp;When reverse-engineered, the winning bids imply a flat block S+S power cost of ₹4.0–₹4.3/kWh (nearly $0.04) (assuming 60 per cent of daily solar energy is stored), with some configurations reaching up to ₹4.6/kWh ($0.05).&nbsp;These prices are well below industrial electricity tariffs in most Indian states, which average around ₹7.9/kWh ($0.09) and are projected to rise with inflation.&nbsp;Implications for industry and coal&nbsp;IECC’s modelling suggests that solar-plus-storage can deliver reliable, 95 per cent availability clean electricity at ₹4.5/kWh ($0.052). Even with 100 per cent uptime through grid or diesel backup, prices remain under ₹6.2/kWh ($0.072)—undercutting coal-based power, which typically sees higher variability and costs.&nbsp;Notably, unlike coal or grid tariffs, solar-plus-storage prices are fixed for 25 years and unaffected by inflation. Even after accounting for transmission tariffs, the total cost of solar-plus-storage remains well below prevailing industrial rates in many states.This makes S+S particularly attractive for commercial and industrial consumers such as data centres and manufacturing facilities that demand round-the-clock power.&nbsp;The IECC report, however, cautioned that region-specific planning will be needed to deal with transmission constraints and solar variability. But the economics are already compelling.&nbsp;The findings also raise serious questions about the viability of investing in new thermal power plants. With S+S systems offering scalable, modular solutions and backed by falling capital costs, India’s clean power trajectory appears not only environmentally urgent but also economically inevitable.&nbsp;IECC’s report concludes that India is replicating its global leadership in low-cost solar in the battery storage space as well, paving the way for a sustainable and resilient power future.

Unlike coal or grid tariffs, solar-plus-storage prices are fixed for 25 years and unaffected by inflation. Even after accounting for transmission tariffs, the total cost of solar-plus-storage remains well below prevailing industrial rates in many states.

In a landmark shift for India’s clean energy transition, solar-plus-storage (S+S) projects are now capable of delivering 24/7 electricity at record-low costs—posing a formidable economic challenge to new coal-fired power. According to a new report from the India Energy and Climate Center (IECC) at UC Berkeley, recent auction results show that the ‘flat block’ power problem—power availability continuously through the day and night—can now be supplied for less than ₹6 per kilowatt-hour (kWh). Over the past few years, the cost of solar photovoltaic (PV) modules and lithium-ion batteries has plummeted. Solar module prices have dropped below ₹9/W ($0.10/W), while battery pack costs are now as low as $60/kWh for Indian developers—levels comparable to those in China. Coupled with improved performance, including battery life cycles exceeding 10,000 uses, these reductions have sharply lowered the Levelised Cost of Storage (LCOS). Recent auctions reflect this trend vividly. In April 2025, a standalone battery energy storage system (BESS) was awarded at ₹2.8 lakh/MW/month (about $3,256) without subsidies. Meanwhile, solar-plus-storage bids with 2–4 hours of storage duration fetched between ₹3.1 and ₹3.5/kWh (about $0.03). These figures represent a 50–60 per cent drop from just 18 months ago. When reverse-engineered, the winning bids imply a flat block S+S power cost of ₹4.0–₹4.3/kWh (nearly $0.04) (assuming 60 per cent of daily solar energy is stored), with some configurations reaching up to ₹4.6/kWh ($0.05). These prices are well below industrial electricity tariffs in most Indian states, which average around ₹7.9/kWh ($0.09) and are projected to rise with inflation. Implications for industry and coal IECC’s modelling suggests that solar-plus-storage can deliver reliable, 95 per cent availability clean electricity at ₹4.5/kWh ($0.052). Even with 100 per cent uptime through grid or diesel backup, prices remain under ₹6.2/kWh ($0.072)—undercutting coal-based power, which typically sees higher variability and costs. Notably, unlike coal or grid tariffs, solar-plus-storage prices are fixed for 25 years and unaffected by inflation. Even after accounting for transmission tariffs, the total cost of solar-plus-storage remains well below prevailing industrial rates in many states. This makes S+S particularly attractive for commercial and industrial consumers such as data centres and manufacturing facilities that demand round-the-clock power. The IECC report, however, cautioned that region-specific planning will be needed to deal with transmission constraints and solar variability. But the economics are already compelling. The findings also raise serious questions about the viability of investing in new thermal power plants. With S+S systems offering scalable, modular solutions and backed by falling capital costs, India’s clean power trajectory appears not only environmentally urgent but also economically inevitable. IECC’s report concludes that India is replicating its global leadership in low-cost solar in the battery storage space as well, paving the way for a sustainable and resilient power future.

Unlike coal or grid tariffs, solar-plus-storage prices are fixed for 25 years and unaffected by inflation. Even after accounting for transmission tariffs, the total cost of solar-plus-storage remains well below prevailing industrial rates in many states.

Is India set for a clean power revolution amid a sharp drop in solar-plus-storage prices?

The US labour market showed a mixed picture in April, with job openings increasing slightly while layoffs ticked higher, signalling a potential shift towards a slower economy.According to the latest Job Openings and Labor Turnover Survey (JOLTS) report from the Bureau of Labor Statistics (BLS), available positions rose by 191,000 to 7.39 million by the end of April, up from 7.20 million in the previous month, surpassing analysts’ expectations.Economists had forecast 7.10 million openings, but the increase in vacancies was largely driven by sectors such as health care and social assistance.However, not all industries experienced growth in job openings. Manufacturing, accommodation, and food services saw a decline in available positions, and state and local government education also showed a noticeable drop. The overall picture was one of stability, with job openings fluctuating within a narrow range of 7 million to 8 million for the past year.Hiring increased slightly in April, rising by 169,000 to a total of 5.57 million, but the pace of new jobs was still far below the pace set earlier in 2022. While the rise in hiring may seem encouraging, the number of layoffs surged to 1.78 million, a worrying sign that companies could be trimming their workforces in response to mounting economic pressures.<h2>Tariff uncertainty and its impact on the job market</h2>One major factor affecting the labour market is the ongoing trade war and the tariffs imposed by the Trump administration. The uncertainty surrounding these import duties has left businesses struggling to plan for the future.Last week, a US trade court blocked most of Trump’s tariffs, only for them to be reinstated by a federal appeals court. Economists say that businesses remain in limbo, unsure of whether the tariffs will be sustained or further escalated, which could affect their hiring and investment plans.The tariffs have already had a dampening effect on business sentiment, contributing to the slower pace of hiring and increasing layoffs. Consumers are also feeling the effects, with growing concern over the labour market’s future.The Conference Board’s labour market differential, a measure of the difference between jobs available and the number of unemployed workers, has narrowed considerably in recent months. The increasing uncertainty, combined with fears of rising prices due to tariffs, has weighed on consumer confidence and expectations for future job growth.<h2>Stagflation fears push Fed’s “wait and see” stance</h2>The Federal Reserve has taken a cautious approach to the current economic climate, particularly in light of the growing risks of stagflation—a combination of high inflation, slow economic growth and rising unemployment.Although the labour market remains relatively strong, inflationary pressures and higher tariffs have created a complicated economic backdrop. Federal Reserve Chairman Jerome Powell recently acknowledged that while the economy is still in a “strong position”, there is a looming risk of stagflation if the tariff-driven uncertainty continues to rise.At its most recent meeting in May 2025, the Fed opted to keep its benchmark interest rate steady, citing the need for more time to assess the impact of tariffs and a slowing economy. While the job market is still adding positions, the rise in layoffs and decline in voluntary quits suggest that employees are becoming more cautious about leaving their current roles.The Federal Reserve, under Powell’s leadership, has long been focused on supporting maximum employment while keeping inflation under control. However, if stagflation takes hold, the Fed may face a difficult dilemma, as rising unemployment could be met with an increase in inflation.The uncertainty surrounding tariffs is complicating the Fed’s decision-making process. Powell has emphasised the Fed’s “wait and see” approach, stating that it is too early to determine the full economic impact of the ongoing trade war.If tariffs remain high and inflation continues to rise, the economy could slow down further, leading to job losses that could offset the gains made in the labour market.While the Federal Reserve has been able to maintain a delicate balance so far, economists are closely watching for any signs of a sustained weakening in job growth or rising inflation.Powell made it clear that, at this point, the central bank is in a good position to observe and adjust as the situation evolves. However, if stagflation becomes a persistent issue, the Fed may be forced to take more aggressive action, something that could bring even greater economic uncertainty in the months ahead.While the JOLTS report brings a glimmer of hope for the US economy as job openings rose, but layoffs also remain high. The upcoming May jobs report will be a key indicator of how the labour market is reacting to these shifting dynamics.If hiring continues to slow and layoffs increase, it could signal that the US economy is entering a period of stagnation, potentially leading to more cautious policies from the Federal Reserve.

While the rise in hiring may seem encouraging, the number of layoffs surged to 1.78 million, a worrying sign that companies could be trimming their workforces in response to mounting economic pressures.

The US labour market showed a mixed picture in April, with job openings increasing slightly while layoffs ticked higher, signalling a potential shift towards a slower economy. According to the latest Job Openings and Labor Turnover Survey (JOLTS) report from the Bureau of Labor Statistics (BLS), available positions rose by 191,000 to 7.39 million by the end of April, up from 7.20 million in the previous month, surpassing analysts’ expectations. Economists had forecast 7.10 million openings, but the increase in vacancies was largely driven by sectors such as health care and social assistance. However, not all industries experienced growth in job openings. Manufacturing, accommodation, and food services saw a decline in available positions, and state and local government education also showed a noticeable drop. The overall picture was one of stability, with job openings fluctuating within a narrow range of 7 million to 8 million for the past year. Hiring increased slightly in April, rising by 169,000 to a total of 5.57 million, but the pace of new jobs was still far below the pace set earlier in 2022. While the rise in hiring may seem encouraging, the number of layoffs surged to 1.78 million, a worrying sign that companies could be trimming their workforces in response to mounting economic pressures. Tariff uncertainty and its impact on the job market One major factor affecting the labour market is the ongoing trade war and the tariffs imposed by the Trump administration. The uncertainty surrounding these import duties has left businesses struggling to plan for the future. Last week, a US trade court blocked most of Trump’s tariffs, only for them to be reinstated by a federal appeals court. Economists say that businesses remain in limbo, unsure of whether the tariffs will be sustained or further escalated, which could affect their hiring and investment plans. The tariffs have already had a dampening effect on business sentiment, contributing to the slower pace of hiring and increasing layoffs. Consumers are also feeling the effects, with growing concern over the labour market’s future. The Conference Board’s labour market differential, a measure of the difference between jobs available and the number of unemployed workers, has narrowed considerably in recent months. The increasing uncertainty, combined with fears of rising prices due to tariffs, has weighed on consumer confidence and expectations for future job growth. Stagflation fears push Fed’s “wait and see” stance The Federal Reserve has taken a cautious approach to the current economic climate, particularly in light of the growing risks of stagflation—a combination of high inflation, slow economic growth and rising unemployment. Although the labour market remains relatively strong, inflationary pressures and higher tariffs have created a complicated economic backdrop. Federal Reserve Chairman Jerome Powell recently acknowledged that while the economy is still in a “strong position”, there is a looming risk of stagflation if the tariff-driven uncertainty continues to rise. At its most recent meeting in May 2025, the Fed opted to keep its benchmark interest rate steady, citing the need for more time to assess the impact of tariffs and a slowing economy. While the job market is still adding positions, the rise in layoffs and decline in voluntary quits suggest that employees are becoming more cautious about leaving their current roles. The Federal Reserve, under Powell’s leadership, has long been focused on supporting maximum employment while keeping inflation under control. However, if stagflation takes hold, the Fed may face a difficult dilemma, as rising unemployment could be met with an increase in inflation. The uncertainty surrounding tariffs is complicating the Fed’s decision-making process. Powell has emphasised the Fed’s “wait and see” approach, stating that it is too early to determine the full economic impact of the ongoing trade war. If tariffs remain high and inflation continues to rise, the economy could slow down further, leading to job losses that could offset the gains made in the labour market. While the Federal Reserve has been able to maintain a delicate balance so far, economists are closely watching for any signs of a sustained weakening in job growth or rising inflation. Powell made it clear that, at this point, the central bank is in a good position to observe and adjust as the situation evolves. However, if stagflation becomes a persistent issue, the Fed may be forced to take more aggressive action, something that could bring even greater economic uncertainty in the months ahead. While the JOLTS report brings a glimmer of hope for the US economy as job openings rose, but layoffs also remain high. The upcoming May jobs report will be a key indicator of how the labour market is reacting to these shifting dynamics. If hiring continues to slow and layoffs increase, it could signal that the US economy is entering a period of stagnation, potentially leading to more cautious policies from the Federal Reserve.

While the rise in hiring may seem encouraging, the number of layoffs surged to 1.78 million, a worrying sign that companies could be trimming their workforces in response to mounting economic pressures.

US labour market shows signs of cooling amid growing stagflation fears

US President Donald Trump has once again reignited tensions with Beijing, calling Chinese President Xi Jinping “very tough” and “extremely hard to make a deal with”.&nbsp;The remark was posted in the early hours of Tuesday on his social media platform, Truth Social.&nbsp;The US president's remark comes amid fresh trade and geopolitical flashpoints that threaten to undo the fragile truce achieved just weeks ago.

“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump wrote on the Truth Social website.<h2>US-China tariff tension continues</h2>The US-China trade relationship has remained turbulent in recent years. In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns.&nbsp;China responded with retaliatory tariffs of up to 125 per cent on US goods.&nbsp;A temporary easing of tensions came in May, when both countries agreed to scale back certain tariffs during talks in Geneva.However, Washington’s latest actions, including export bans, software curbs, and visa restrictions, have sparked renewed conflict.&nbsp;Last week, the Trump administration said it planned to start revoking visas for Chinese students, while moving to restrict sales of chip design software to China.&nbsp;According to the New York Times, the US has also barred exports of critical jet engine parts and aviation technology to China.&nbsp;Although Trump did not provide specifics when accusing Beijing of violating the trade truce on Friday, US Trade Representative Jamieson Greer said China had failed to accelerate exports of critical minerals used in advanced electronics, as per Bloomberg.&nbsp;According to a report by Bloomberg, China has accused the United States of “seriously violating” the trade truce established in Geneva in May 2025.&nbsp;The Chinese Ministry of Commerce criticised the US for introducing new trade and technology restrictions, including export controls on artificial intelligence (AI) chips, curbs on chip design software sales to China, and the revocation of Chinese student visas.&nbsp;Beijing said these actions undermined the consensus reached between President Donald Trump and President Xi Jinping during their last conversation in January.&nbsp;“If the US insists on its way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry stated, as quoted by Bloomberg.&nbsp;The ministry further stated it “resolutely rejects these unjustified accusations” and insisted that China has strictly implemented the Geneva consensus.&nbsp;According to Bloomberg, last week, the US Treasury Secretary Scott Bessent confirmed that trade talks had stalled and hinted that a direct call between Trump and Xi might be necessary to break the deadlock.&nbsp;The two leaders of the world’s largest economy have spoken in January, shortly before Trump returned to the Oval Office.&nbsp;Despite growing tension, the US reportedly said that Trump and Xi are likely to speak on a call.&nbsp; US President's adviser Kevin Hassett suggested a call could happen this week, according to Bloomberg.&nbsp;Whether Xi will entertain the outreach remains uncertain.&nbsp;&nbsp;Beijing has repeatedly stated that any high-level engagement must be based on mutual respect and the withdrawal of what it calls “unilateral and coercive measures”.&nbsp;For now, with tariffs rising, visas tightening, and rhetoric intensifying, the road to détente appears steeper than ever. &nbsp;

The US president remark comes amid fresh trade and geopolitical flashpoints that threaten to undo the fragile truce achieved just weeks ago.

US President Donald Trump has once again reignited tensions with Beijing, calling Chinese President Xi Jinping “very tough” and “extremely hard to make a deal with”. The remark was posted in the early hours of Tuesday on his social media platform, Truth Social. The US president's remark comes amid fresh trade and geopolitical flashpoints that threaten to undo the fragile truce achieved just weeks ago.

Amid US-China trade deal growing tension, US President Donald Trump has called negotiations with Chinese President Xi Jinping ‘very tough’.&nbsp;

Trump calls Xi ‘extremely hard to make a deal with’ as US-China trade war flares up again

US President Donald Trump has signed an executive order doubling import tariffs on steel and aluminium from 25 to 50 per cent, a move that has sparked fresh concerns of a global trade flare-up.&nbsp;&nbsp;The decision, effective from June 5, has exempted the United Kingdom for now, thanks to an ongoing bilateral agreement, but other trading partners, including Canada, Mexico and the European Union, are preparing countermeasures.<h2>US metals tariffs hiked to 50 per cent</h2>Trump’s new order raises the stakes in an already tense global trade environment. In a proclamation signed late Tuesday, he authorised a 50 per cent duty on most imported steel and aluminium, citing the need to bolster domestic industry. “Nobody’s going to be able to steal your industry… at 50 per cent, they can no longer get over the fence,” Trump said during a rally at a US Steel plant, as quoted by Reuters.&nbsp;The hike marks the second major tariff escalation since March, when Trump first reimposed 25 per cent tariffs on steel and 10 per cent on aluminium, using Section 232 of the Trade Expansion Act, a clause that allows tariffs in the name of national security. “We started at 25 and then, after studying the data more, realised more help is needed,” said White House economic adviser Kevin Hassett at a steel conference in Washington, according to Reuters.<h2>UK temporarily escapes the tariff blow for now&nbsp;</h2>The United Kingdom has been spared, for now. Under a preliminary trade understanding known as the Economic Prosperity Deal (EPD), signed on May 8, UK metal exports will continue to face the original 25 per cent tariff, not the new 50 per cent rate. The deal is yet to be fully ratified in Parliament, and the exemption remains conditional.&nbsp;In the order, Trump said the UK deserved “different treatment” due to the EPD but warned that the 50 per cent tariff could still be applied on or after July 9 if the agreement does not fully materialise. Trade Secretary Jonathan Reynolds, who met US Trade Representative Jamieson Greer in Paris, welcomed the temporary relief and reaffirmed the UK’s commitment to implementing the agreement.&nbsp;Gareth Stace, Director General of UK Steel, said the exemption was “a welcome pause,” but warned of uncertainty. “The introduction of 50 per cent tariffs immediately puts the shutters up… most of our orders, if not all of them, will now be cancelled,” he told Reuters.<h2>Tariffs take effect as deadline for new trade offers looms</h2>The tariff spike also coincides with a broader Trump deadline; June 5 marks the date by which trading partners were expected to submit their “best offers” to avoid additional tariffs, part of Trump’s so-called “Liberation Day” duties set to kick in from July 8.&nbsp;As reported by Reuters, the Office of the US Trade Representative (USTR) recently sent letters to multiple governments asking for detailed proposals, including commitments on reducing tariffs, addressing non-tariff barriers, and purchasing more US goods. White House spokeswoman Karoline Leavitt confirmed that the letters were intended as a “friendly reminder.”&nbsp;So far, only the UK has struck a deal in principle. Other major trading partners, including Canada and Mexico, have warned of retaliation. “It makes no sense for the United States to levy a tariff on a product in which you have a surplus,” Mexico’s Economy Minister Marcelo Ebrard told Reuters, noting that Mexico imports more steel from the US than it exports there.<h2>Global steel and aluminium trade reels under pressure</h2>The global steel and aluminium sectors are already seeing ripple effects. US steel imports fell 17 per cent in April compared to March, according to data from the American Iron and Steel Institute (AISI). Census Bureau data cited by Bloomberg shows that Canada and Mexico,&nbsp;the first and third largest exporters of steel to the US, will be hit hardest.&nbsp;Canada also faces steep exposure on the aluminium front, as it supplies nearly half of US aluminium imports, more than twice that of the next ten countries combined, according to official US trade data reviewed by Reuters.&nbsp;Domestic price shocks have followed. Aluminium premiums in the US have more than doubled since the start of the year, with Bloomberg reporting a surge in market volatility due to the abrupt policy shift.&nbsp;Business leaders have raised alarms. Chad Bartusek, Director of Supply Chain at Illinois-based Drill Rod &amp; Tool Steels, told Reuters that he woke up to a 50 per cent tariff bill of $145,000, double what he expected. “It’s one punch after another,” he said, adding that his firm has had to raise prices by up to 14 per cent and reduce workers’ hours.&nbsp;Economists, too, remain sceptical. Erica York, Vice President of Federal Tax Policy at the Tax Foundation, warned of broader fallout. “It’s just very foolish to double down on this type of tariff,” she told Reuters. York pointed to a 2020 analysis showing that Trump’s earlier tariffs created about 1,000 steel jobs but cost the economy 75,000 jobs in downstream industries.<h2>What lies ahead?</h2>As Trump’s trade deadline looms, the global metals market waits in limbo. While the UK has secured a temporary reprieve, much of the world, including close allies, continues to face stiff levies. Whether these measures ultimately protect American industry or deepen global economic fragmentation remains to be seen.&nbsp;For now, businesses, trade diplomats and economists alike are bracing for the next round of negotiations or the next wave of tariffs.

This decision, effective June 5, exempts the UK temporarily under a bilateral agreement. 

US President Donald Trump has signed an executive order doubling import tariffs on steel and aluminium from 25 to 50 per cent, a move that has sparked fresh concerns of a global trade flare-up. The decision, effective from June 5, has exempted the United Kingdom for now, thanks to an ongoing bilateral agreement, but other trading partners, including Canada, Mexico and the European Union, are preparing countermeasures. US metals tariffs hiked to 50 per cent Trump’s new order raises the stakes in an already tense global trade environment. In a proclamation signed late Tuesday, he authorised a 50 per cent duty on most imported steel and aluminium, citing the need to bolster domestic industry. “Nobody’s going to be able to steal your industry… at 50 per cent, they can no longer get over the fence,” Trump said during a rally at a US Steel plant, as quoted by Reuters. The hike marks the second major tariff escalation since March, when Trump first reimposed 25 per cent tariffs on steel and 10 per cent on aluminium, using Section 232 of the Trade Expansion Act, a clause that allows tariffs in the name of national security. “We started at 25 and then, after studying the data more, realised more help is needed,” said White House economic adviser Kevin Hassett at a steel conference in Washington, according to Reuters. UK temporarily escapes the tariff blow for now The United Kingdom has been spared, for now. Under a preliminary trade understanding known as the Economic Prosperity Deal (EPD), signed on May 8, UK metal exports will continue to face the original 25 per cent tariff, not the new 50 per cent rate. The deal is yet to be fully ratified in Parliament, and the exemption remains conditional. In the order, Trump said the UK deserved “different treatment” due to the EPD but warned that the 50 per cent tariff could still be applied on or after July 9 if the agreement does not fully materialise. Trade Secretary Jonathan Reynolds, who met US Trade Representative Jamieson Greer in Paris, welcomed the temporary relief and reaffirmed the UK’s commitment to implementing the agreement. Gareth Stace, Director General of UK Steel, said the exemption was “a welcome pause,” but warned of uncertainty. “The introduction of 50 per cent tariffs immediately puts the shutters up… most of our orders, if not all of them, will now be cancelled,” he told Reuters. Tariffs take effect as deadline for new trade offers looms The tariff spike also coincides with a broader Trump deadline; June 5 marks the date by which trading partners were expected to submit their “best offers” to avoid additional tariffs, part of Trump’s so-called “Liberation Day” duties set to kick in from July 8. As reported by Reuters, the Office of the US Trade Representative (USTR) recently sent letters to multiple governments asking for detailed proposals, including commitments on reducing tariffs, addressing non-tariff barriers, and purchasing more US goods. White House spokeswoman Karoline Leavitt confirmed that the letters were intended as a “friendly reminder.” So far, only the UK has struck a deal in principle. Other major trading partners, including Canada and Mexico, have warned of retaliation. “It makes no sense for the United States to levy a tariff on a product in which you have a surplus,” Mexico’s Economy Minister Marcelo Ebrard told Reuters, noting that Mexico imports more steel from the US than it exports there. Global steel and aluminium trade reels under pressure The global steel and aluminium sectors are already seeing ripple effects. US steel imports fell 17 per cent in April compared to March, according to data from the American Iron and Steel Institute (AISI). Census Bureau data cited by Bloomberg shows that Canada and Mexico, the first and third largest exporters of steel to the US, will be hit hardest. Canada also faces steep exposure on the aluminium front, as it supplies nearly half of US aluminium imports, more than twice that of the next ten countries combined, according to official US trade data reviewed by Reuters. Domestic price shocks have followed. Aluminium premiums in the US have more than doubled since the start of the year, with Bloomberg reporting a surge in market volatility due to the abrupt policy shift. Business leaders have raised alarms. Chad Bartusek, Director of Supply Chain at Illinois-based Drill Rod & Tool Steels, told Reuters that he woke up to a 50 per cent tariff bill of $145,000, double what he expected. “It’s one punch after another,” he said, adding that his firm has had to raise prices by up to 14 per cent and reduce workers’ hours. Economists, too, remain sceptical. Erica York, Vice President of Federal Tax Policy at the Tax Foundation, warned of broader fallout. “It’s just very foolish to double down on this type of tariff,” she told Reuters. York pointed to a 2020 analysis showing that Trump’s earlier tariffs created about 1,000 steel jobs but cost the economy 75,000 jobs in downstream industries. What lies ahead? As Trump’s trade deadline looms, the global metals market waits in limbo. While the UK has secured a temporary reprieve, much of the world, including close allies, continues to face stiff levies. Whether these measures ultimately protect American industry or deepen global economic fragmentation remains to be seen. For now, businesses, trade diplomats and economists alike are bracing for the next round of negotiations or the next wave of tariffs.

Amid global trade tension, US President Trump has signed an executive order raising import tariffs on steel and aluminium to 50 per cent.&nbsp;

Trump doubles US steel and aluminium tariffs to 50%; UK temporarily spared amid wider trade war

In a dramatic escalation of tensions between two high-profile allies, Elon Musk has publicly denounced US President Donald Trump’s flagship tax and spending bill, calling it a “disgusting abomination”.&nbsp;&nbsp;The tech mogul’s blunt criticism comes just days after his abrupt departure from the Trump administration, ending his short-lived role as head of a federal cost-cutting task force.&nbsp;Musk’s comments mark the clearest break yet between the Tesla CEO and the Republican president he once endorsed and worked alongside.&nbsp;&nbsp;The billionaire, who donated over $250 million to Trump’s 2024 campaign and was handpicked to lead the Department of Government Efficiency (DOGE), now finds himself among the bill’s most vocal critics.<h2>What did Musk say?</h2>

<blockquote class="twitter-tweet">I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1929954109689606359?ref_src=twsrc%5Etfw">June 3, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

Taking to X on Tuesday, Musk lashed out at the legislation, saying: “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it”, as quoted by Reuters on 3 June.

<blockquote class="twitter-tweet">It will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America citizens with crushingly unsustainable debt <a href="https://t.co/dHCj3pprJO">https://t.co/dHCj3pprJO</a>&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1929955052527202503?ref_src=twsrc%5Etfw">June 3, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

He further claimed that the legislation “will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America citizens with crushingly unsustainable debt”, Musk wrote on X.&nbsp;

<blockquote class="twitter-tweet">In November next year, we fire all politicians who betrayed the American people <a href="https://t.co/GTRc9Rjled">https://t.co/GTRc9Rjled</a>&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1929984535456035202?ref_src=twsrc%5Etfw">June 3, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

In another pointed remark on X, Musk warned: “In November next year, we fire all politicians who betrayed the American people."

Musk’s frustrations reportedly extended beyond the broader economic implications. According to reports, one of the specific sticking points was the denial of a proposal to have air traffic control run via his Starlink satellite system, &nbsp;rejected over conflict of interest and technology concerns.<h2>What is Trump’s tax-cut and spending bill?</h2>Passed by the House of Representatives last month by a single vote, Trump’s controversial bill is a centerpiece of his second-term agenda.&nbsp;It seeks to extend the 2017 tax cuts introduced during his first term, increase defence spending, and allocate billions towards mass deportation of undocumented immigrants.The legislation also raises the US debt ceiling to $4 trillion, a move that has drawn sharp rebukes from fiscal conservatives.&nbsp;&nbsp;The non-partisan Congressional Budget Office (CBO) estimates the bill will add $3.8 trillion to the US federal debt, which currently stands at more than $36.2 trillion, according to Reuters.&nbsp;While Trump has defended the proposal as “one big, beautiful bill”, according to Reuters, critics within and outside his party are growing louder. Republican Senator Rand Paul told CBS News that the GOP “will own the debt once they vote for this” and reaffirmed his opposition to any increase in the debt ceiling.&nbsp;Despite the backlash, Senate Republicans are pressing ahead. Senate Majority Leader John Thune said: “We have an agenda that everybody campaigned on, most notably the president,” as reported by the BBC. He also told reporters, as quoted by Reuters: “My hope is that as [Musk] has an opportunity to further assess what this bill actually does, that he comes to a different conclusion.”<h2>Musk’s journey: From Trump supporter to critic</h2>Musk’s fiery condemnation is particularly striking given his recent proximity to Trump’s political and administrative machinery. A vocal supporter of Trump during the 2024 campaign, Musk contributed over $250 million to the re-election effort.&nbsp;He was later appointed to lead DOGE, the Department of Government Efficiency where he oversaw attempts to reform federal spending. His tenure lasted 129 days and formally ended on 31 May. Upon his departure, Trump said, “He will, always, be with us, helping all the way,” according to Reuters.&nbsp;Signs of strain had already begun to emerge before Musk’s exit. In an interview a week prior, he called the bill “disappointing”, according to Bloomberg, and warned that it would undermine DOGE’s objectives. He amplified that criticism after leaving the administration, with the latest comments representing his most severe rebuke yet.&nbsp;Republican House Speaker Mike Johnson, a key architect of the bill, claimed he had a 20-minute call with Musk on Monday. Speaking to reporters on Capitol Hill, Johnson said: “My friend Elon is terribly wrong… it’s a very important first start. Elon is missing it,” as quoted by the BBC. Johnson also expressed surprise at Musk’s public opposition, saying: “I just deeply regret he’s made this mistake,” according to BBC.<h2>Republican backlash and bipartisan ripples</h2>Other Republican lawmakers also pushed back. Thune and Johnson reiterated their commitment to the bill’s passage despite Musk’s criticism. Johnson acknowledged that the removal of electric vehicle tax credits could “have an effect” on Tesla, but insisted the bill remains “very important”, according to BBC.&nbsp;Meanwhile, Democrats seized on Musk’s remarks to reinforce their own objections. Senate Minority Leader Chuck Schumer said: “Even Elon Musk, who’s been part of the whole process and is one of Trump’s buddies, said the bill is bad. We can imagine how bad this bill is,” as reported by the BBC.&nbsp;White House press secretary Karoline Leavitt dismissed Musk’s attack, stating: “The President already knows where Elon Musk stood on this bill. It doesn’t change the President’s opinion. This is one big, beautiful bill, and he’s sticking to it,” Reuters reported.<h2>A widening rift with November stakes</h2>The fracture between Trump and Musk highlights deeper ideological divides within the Republican party, particularly around fiscal conservatism, government debt, and economic priorities.&nbsp;&nbsp;With Trump aiming for Senate passage by 4 July, the next few weeks will determine whether his legislative ambitions survive intra-party rebellion.&nbsp;Though Musk’s time in the Trump administration is over, his scathing assessment of the bill and his call to oust those who supported it, signal a new phase in his political engagement.&nbsp;&nbsp;For a figure once central to Trump’s cost-cutting crusade, Musk now appears to be positioning himself as its loudest dissenting voice.&nbsp;

Musk further claimed it would worsen the budget deficit and burden citizens with debt, urging accountability for politicians.

In a dramatic escalation of tensions between two high-profile allies, Elon Musk has publicly denounced US President Donald Trump’s flagship tax and spending bill, calling it a “disgusting abomination”. The tech mogul’s blunt criticism comes just days after his abrupt departure from the Trump administration, ending his short-lived role as head of a federal cost-cutting task force. Musk’s comments mark the clearest break yet between the Tesla CEO and the Republican president he once endorsed and worked alongside. The billionaire, who donated over $250 million to Trump’s 2024 campaign and was handpicked to lead the Department of Government Efficiency (DOGE), now finds himself among the bill’s most vocal critics. What did Musk say?

Elon Musk criticized President Trump's tax and spending bill as a "disgusting abomination," marking a stark break from his previous support.

Elon Musk slams Trump’s tax bill as ‘a disgusting abomination’, warns of political fallout

Alarm over China’s increasing control over critical minerals intensified on June 3 as both global automakers and US defence officials raised the stakes in the ongoing trade dispute with Beijing.The latest concerns were sparked by China’s sweeping restrictions on exports of rare earth alloys, mixtures, and magnets, which have triggered warnings of serious production delays and even shutdowns in key industries worldwide.German car manufacturers have now joined their US counterparts in sounding the alarm, noting that the curbs could cripple vehicle production, disrupt supply chains, and potentially rattle local economies.China’s decision in April to suspend exports of a broad range of critical minerals—including magnets, essential for building everything from electric vehicles to missiles—has upended the global supply chains that automakers, aerospace companies, and military contractors depend on. These export controls underscore China’s overwhelming dominance in the critical minerals market and are widely perceived as part of its strategy to leverage its position in the ongoing trade war with the United States.Warning about the bleak situation, Germany's automotive lobby head, Hildegard Mueller, told Reuters, “If the situation is not changed quickly, production delays and even production outages can no longer be ruled out.”The worries over these mineral export restrictions are not limited to the automotive sector. Semiconductor companies, defence contractors, and other industries reliant on rare earth magnets for their products have also voiced concern.With the export ban still in place, officials from various countries, including Japan, India, and the European Union (EU), have been urgently pushing for Beijing to lift the export restrictions.A business delegation from Japan will visit Beijing in early June to meet with the Ministry of Commerce over the curbs, and European diplomats from countries with big auto industries have also sought "emergency" meetings with Chinese officials in recent weeks, Reuters reported.<h2>Strategic leverage in trade war with the US</h2>China's rare earth dominance is a key bargaining chip in its ongoing trade standoff with the US, particularly under President Donald Trump’s administration. Trump’s aggressive tariffs and trade measures against China, including tariffs as high as 145 per cent placed earlier, have created an environment where Beijing can flex its muscle in ways that have reverberated across global supply chains.Reuters reported that according to Frank Fannon, a former US Assistant Secretary of State for Energy Resources,&nbsp;the disruptions should not come as a surprise to anyone who has been paying attention to the shifting global dynamics in mineral supply chains.“We have a production challenge (in the US), and we need to leverage our whole government approach to secure resources and ramp up domestic capability as soon as possible. The time horizon to do this was yesterday,” Fannon said.In response to China’s move, US diplomats, automakers, and military executives have escalated their discussions with Beijing, scrambling to identify alternate sources for these critical materials. The most immediate concern revolves around rare earth magnets. The export controls have created a shortage of key materials, risking disruption to production as early as the end of this summer.China’s export halt has also raised the stakes for US defence contractors. The Pentagon's advanced weapon systems—such as F-35 fighter jets, naval ships, and missiles—are heavily dependent on rare earths and other critical minerals.<h2>US strategic vulnerability and the race for alternatives</h2>China mines 70 per cent of the world’s rare earth materials. Myanmar, Australia and the United States mine most of the rest. But China does the chemical processing for 90 per cent of the world’s rare earths because it refines all of its own ore and also practically all of Myanmar’s and nearly half of US production, and the Pentagon is particularly vulnerable to any disruptions in this supply chain.The Pentagon has long relied on China for its supply of critical minerals used in advanced weaponry, but the recent restrictions on exports of seven medium and heavy rare earth elements have exposed the vulnerabilities in US military readiness.China’s recent export controls on gallium, germanium, and other materials have also had a significant impact. These minerals are indispensable in manufacturing technologies used by the military, and their scarcity could hinder America’s ability to maintain its technological edge.Despite this, the US military is beginning to act to mitigate its dependence on China. The Pentagon has been investing heavily in building domestic supply chains for critical minerals. Since 2020, the US government has allocated more than $400 million to develop alternative sources, and the US company MP Materials has been awarded significant funding to help increase production at the Mountain Pass mine in California.However, experts caution that this is a slow process. The US still relies heavily on China for its refined critical minerals, with only one mine in the US producing rare earth elements, and even then, it only accounts for about 11 per cent of global production, according to Statista.As geopolitical tensions rise between the US and China, the rare earth mineral issue is poised to become an even more significant flashpoint. China has a long history of using rare earth exports as leverage in diplomatic disputes, including a brief but intense embargo on shipments to Japan in 2010 during a territorial disagreement.While US efforts to develop alternative sources of critical minerals continue, the global automotive and defence sectors remain on edge, fearing that Beijing’s strategic control over these materials will continue to disrupt industries vital to both economic growth and national security. The ongoing situation underscores the urgent need for the US to diversify its mineral supply chains and reduce reliance on China in the years ahead.&nbsp;(With inputs from agencies)

China’s decision in April to suspend exports of a broad range of critical minerals has upended the global supply chains that automakers, aerospace companies, and military contractors depend on.

Alarm over China’s increasing control over critical minerals intensified on June 3 as both global automakers and US defence officials raised the stakes in the ongoing trade dispute with Beijing. The latest concerns were sparked by China’s sweeping restrictions on exports of rare earth alloys, mixtures, and magnets, which have triggered warnings of serious production delays and even shutdowns in key industries worldwide. German car manufacturers have now joined their US counterparts in sounding the alarm, noting that the curbs could cripple vehicle production, disrupt supply chains, and potentially rattle local economies. China’s decision in April to suspend exports of a broad range of critical minerals—including magnets, essential for building everything from electric vehicles to missiles—has upended the global supply chains that automakers, aerospace companies, and military contractors depend on. These export controls underscore China’s overwhelming dominance in the critical minerals market and are widely perceived as part of its strategy to leverage its position in the ongoing trade war with the United States. Warning about the bleak situation, Germany's automotive lobby head, Hildegard Mueller, told Reuters, “If the situation is not changed quickly, production delays and even production outages can no longer be ruled out.” The worries over these mineral export restrictions are not limited to the automotive sector. Semiconductor companies, defence contractors, and other industries reliant on rare earth magnets for their products have also voiced concern. With the export ban still in place, officials from various countries, including Japan, India, and the European Union (EU), have been urgently pushing for Beijing to lift the export restrictions. A business delegation from Japan will visit Beijing in early June to meet with the Ministry of Commerce over the curbs, and European diplomats from countries with big auto industries have also sought "emergency" meetings with Chinese officials in recent weeks, Reuters reported. Strategic leverage in trade war with the US China's rare earth dominance is a key bargaining chip in its ongoing trade standoff with the US, particularly under President Donald Trump’s administration. Trump’s aggressive tariffs and trade measures against China, including tariffs as high as 145 per cent placed earlier, have created an environment where Beijing can flex its muscle in ways that have reverberated across global supply chains. Reuters reported that according to Frank Fannon, a former US Assistant Secretary of State for Energy Resources, the disruptions should not come as a surprise to anyone who has been paying attention to the shifting global dynamics in mineral supply chains. “We have a production challenge (in the US), and we need to leverage our whole government approach to secure resources and ramp up domestic capability as soon as possible. The time horizon to do this was yesterday,” Fannon said. In response to China’s move, US diplomats, automakers, and military executives have escalated their discussions with Beijing, scrambling to identify alternate sources for these critical materials. The most immediate concern revolves around rare earth magnets. The export controls have created a shortage of key materials, risking disruption to production as early as the end of this summer. China’s export halt has also raised the stakes for US defence contractors. The Pentagon's advanced weapon systems—such as F-35 fighter jets, naval ships, and missiles—are heavily dependent on rare earths and other critical minerals. US strategic vulnerability and the race for alternatives China mines 70 per cent of the world’s rare earth materials. Myanmar, Australia and the United States mine most of the rest. But China does the chemical processing for 90 per cent of the world’s rare earths because it refines all of its own ore and also practically all of Myanmar’s and nearly half of US production, and the Pentagon is particularly vulnerable to any disruptions in this supply chain. The Pentagon has long relied on China for its supply of critical minerals used in advanced weaponry, but the recent restrictions on exports of seven medium and heavy rare earth elements have exposed the vulnerabilities in US military readiness. China’s recent export controls on gallium, germanium, and other materials have also had a significant impact. These minerals are indispensable in manufacturing technologies used by the military, and their scarcity could hinder America’s ability to maintain its technological edge. Despite this, the US military is beginning to act to mitigate its dependence on China. The Pentagon has been investing heavily in building domestic supply chains for critical minerals. Since 2020, the US government has allocated more than $400 million to develop alternative sources, and the US company MP Materials has been awarded significant funding to help increase production at the Mountain Pass mine in California. However, experts caution that this is a slow process. The US still relies heavily on China for its refined critical minerals, with only one mine in the US producing rare earth elements, and even then, it only accounts for about 11 per cent of global production, according to Statista. As geopolitical tensions rise between the US and China, the rare earth mineral issue is poised to become an even more significant flashpoint. China has a long history of using rare earth exports as leverage in diplomatic disputes, including a brief but intense embargo on shipments to Japan in 2010 during a territorial disagreement. While US efforts to develop alternative sources of critical minerals continue, the global automotive and defence sectors remain on edge, fearing that Beijing’s strategic control over these materials will continue to disrupt industries vital to both economic growth and national security. The ongoing situation underscores the urgent need for the US to diversify its mineral supply chains and reduce reliance on China in the years ahead. (With inputs from agencies)

China’s decision in April to suspend exports of a broad range of critical minerals has upended the global supply chains that automakers, aerospace companies, and military contractors depend on.

US military and automakers raise alarms as China leverages rare earth trump card

The Organisation for Economic Co-operation and Development (OECD) has sharply downgraded its global economic growth outlook, warning that a combination of rising trade barriers, policy uncertainty, and persistent inflation could slow growth more than anticipated.According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections.The report attributed the slowdown to escalating trade tensions, particularly the fallout from the Trump administration's tariff policies, which have had a ripple effect on global supply chains and business investment.&nbsp;What is dragging global growth?&nbsp;The OECD's report highlights that the global economic outlook has grown more challenging as trade barriers have risen sharply. New tariffs, particularly between the US and several major trading partners, have pushed global trade to a standstill.The OECD warns that further protectionist measures could exacerbate inflationary pressures, disrupt global supply chains, and increase economic policy uncertainty, all of which are likely to dampen growth prospects for many countries.“Substantial increases in trade barriers and tighter financial conditions will have marked adverse effects on global growth if they persist,” the OECD report states.Rising trade costs, especially tariffs, are pushing up inflation, although this may be partially offset by falling commodity prices in some regions. Despite the anticipated slowdown, the OECD also notes that a reversal of recent tariff hikes could provide a much-needed boost to global economic activity and ease some inflationary pressures.In the United States, the forecast for economic growth has been cut significantly. The US economy is now expected to expand at only 1.6 per cent in 2025, a sharp decline from earlier forecasts. The main reasons for the downgrade are the increase in tariff rates, retaliatory measures from trading partners, and policy uncertainty surrounding the trade war.This slowdown is exacerbated by rising inflation, which the OECD expects will remain above target, staying near 4 per cent by the end of 2025. Higher import prices, resulting from tariffs, are eroding consumer purchasing power, while economic policy uncertainty has also caused businesses to hold back on investment.While the Eurozone is seeing more moderate growth expectations, China’s growth has also been impacted. The OECD revised its forecast for China down to 4.7 per cent for 2025, slightly lower than earlier predictions. Despite this, China’s government is trying to offset the economic damage through fiscal stimulus and welfare transfers aimed at boosting domestic demand.On the other hand, India’s real GDP is projected to grow by 6.3 per cent in fiscal year 2025-26 and 6.4 per cent in 2026-27. The report predicts that private consumption will gradually strengthen, driven by rising real incomes that are helped by moderate inflation, recent tax cuts and a strengthening of the labour market.Investment in India will be supported by declining interest rates and substantial public capital spending, but higher US tariffs will weigh on exports. Inflation will remain contained at around 4 per cent as economic activity grows around the trend. A less benign monsoon season or higher global commodity prices could drive up food prices and inflation.&nbsp;Inflation and investment woes&nbsp;Globally, inflation is expected to remain elevated for longer than anticipated. The OECD’s inflation forecast for 2025 has been revised upward to 4.2 per cent from 3.7 per cent in earlier projections, with inflation expected to remain above 3 per cent in 2026 as well. This persistent inflation is largely attributed to ongoing trade disruptions and the inflationary effects of tariffs, which are also expected to stifle investment.Investment has been sluggish in many advanced economies since the global financial crisis, with weak business confidence further exacerbating the problem. The OECD emphasises that without a significant increase in investment, especially in public infrastructure and housing, many economies will face longer-term stagnation, weakening their potential growth.The OECD report also stressed that a major driver of the slowdown is the weakening of business investment due to heightened uncertainty and inflationary pressures. This situation, combined with a lack of capital accumulation, threatens the ability of advanced economies to regain a strong growth trajectory.&nbsp;Policy solutions: A path to resilient growth&nbsp;To mitigate these challenges, the OECD suggests several key policy interventions. First, reducing international trade barriers and addressing policy uncertainty could stimulate growth and reduce inflationary pressures. Governments are encouraged to diversify supply chains, encourage competition, and support entrepreneurship to reinvigorate investment.Monetary policy must also remain vigilant to keep inflation in check while fostering an environment conducive to investment. Central banks, according to the OECD, should maintain low interest rates where inflation expectations are under control and adjust rates as necessary to support demand.Finally, the OECD advises governments to focus on reducing public debt ratios and rebuilding fiscal space to respond to future economic shocks, particularly those related to climate change and population ageing.With the global outlook facing significant headwinds, the OECD stresses that coordinated international action to lower trade barriers and reduce policy uncertainty is essential to ensure a more robust and resilient global economy in the years ahead.

According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections.

The Organisation for Economic Co-operation and Development (OECD) has sharply downgraded its global economic growth outlook, warning that a combination of rising trade barriers, policy uncertainty, and persistent inflation could slow growth more than anticipated. According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections. The report attributed the slowdown to escalating trade tensions, particularly the fallout from the Trump administration's tariff policies, which have had a ripple effect on global supply chains and business investment. What is dragging global growth? The OECD's report highlights that the global economic outlook has grown more challenging as trade barriers have risen sharply. New tariffs, particularly between the US and several major trading partners, have pushed global trade to a standstill. The OECD warns that further protectionist measures could exacerbate inflationary pressures, disrupt global supply chains, and increase economic policy uncertainty, all of which are likely to dampen growth prospects for many countries. “Substantial increases in trade barriers and tighter financial conditions will have marked adverse effects on global growth if they persist,” the OECD report states. Rising trade costs, especially tariffs, are pushing up inflation, although this may be partially offset by falling commodity prices in some regions. Despite the anticipated slowdown, the OECD also notes that a reversal of recent tariff hikes could provide a much-needed boost to global economic activity and ease some inflationary pressures. In the United States, the forecast for economic growth has been cut significantly. The US economy is now expected to expand at only 1.6 per cent in 2025, a sharp decline from earlier forecasts. The main reasons for the downgrade are the increase in tariff rates, retaliatory measures from trading partners, and policy uncertainty surrounding the trade war. This slowdown is exacerbated by rising inflation, which the OECD expects will remain above target, staying near 4 per cent by the end of 2025. Higher import prices, resulting from tariffs, are eroding consumer purchasing power, while economic policy uncertainty has also caused businesses to hold back on investment. While the Eurozone is seeing more moderate growth expectations, China’s growth has also been impacted. The OECD revised its forecast for China down to 4.7 per cent for 2025, slightly lower than earlier predictions. Despite this, China’s government is trying to offset the economic damage through fiscal stimulus and welfare transfers aimed at boosting domestic demand. On the other hand, India’s real GDP is projected to grow by 6.3 per cent in fiscal year 2025-26 and 6.4 per cent in 2026-27. The report predicts that private consumption will gradually strengthen, driven by rising real incomes that are helped by moderate inflation, recent tax cuts and a strengthening of the labour market. Investment in India will be supported by declining interest rates and substantial public capital spending, but higher US tariffs will weigh on exports. Inflation will remain contained at around 4 per cent as economic activity grows around the trend. A less benign monsoon season or higher global commodity prices could drive up food prices and inflation. Inflation and investment woes Globally, inflation is expected to remain elevated for longer than anticipated. The OECD’s inflation forecast for 2025 has been revised upward to 4.2 per cent from 3.7 per cent in earlier projections, with inflation expected to remain above 3 per cent in 2026 as well. This persistent inflation is largely attributed to ongoing trade disruptions and the inflationary effects of tariffs, which are also expected to stifle investment. Investment has been sluggish in many advanced economies since the global financial crisis, with weak business confidence further exacerbating the problem. The OECD emphasises that without a significant increase in investment, especially in public infrastructure and housing, many economies will face longer-term stagnation, weakening their potential growth. The OECD report also stressed that a major driver of the slowdown is the weakening of business investment due to heightened uncertainty and inflationary pressures. This situation, combined with a lack of capital accumulation, threatens the ability of advanced economies to regain a strong growth trajectory. Policy solutions: A path to resilient growth To mitigate these challenges, the OECD suggests several key policy interventions. First, reducing international trade barriers and addressing policy uncertainty could stimulate growth and reduce inflationary pressures. Governments are encouraged to diversify supply chains, encourage competition, and support entrepreneurship to reinvigorate investment. Monetary policy must also remain vigilant to keep inflation in check while fostering an environment conducive to investment. Central banks, according to the OECD, should maintain low interest rates where inflation expectations are under control and adjust rates as necessary to support demand. Finally, the OECD advises governments to focus on reducing public debt ratios and rebuilding fiscal space to respond to future economic shocks, particularly those related to climate change and population ageing. With the global outlook facing significant headwinds, the OECD stresses that coordinated international action to lower trade barriers and reduce policy uncertainty is essential to ensure a more robust and resilient global economy in the years ahead.

According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections.

OECD slashes global growth forecast amid rising trade barriers and inflation

China’s manufacturing sector experienced its most significant downturn since September 2022, as a private-sector survey revealed a steep drop in activity, driven by the impact of the ongoing US tariff tension.&nbsp;The Caixin/S&amp;P Global manufacturing purchasing managers' index (PMI) declined to 48.3 in May from 50.4 in April, dipping below the critical 50-mark which signals contraction in the economy. This marked the first contraction since last September and the weakest performance in over two years.&nbsp;The data came in significantly below analysts' expectations and underscored the growing impact of trade tensions on the world’s second-largest economy.&nbsp;The decline in the Caixin PMI, which primarily surveys small to medium-sized firms, pointed to a marked reduction in foreign demand, with new export orders falling at their fastest rate since July 2023. This steep drop in orders follows a pattern of worsening global trade conditions, exacerbated by US tariffs imposed during the trade war.&nbsp;<h2>Smaller exporters hit hard</h2>&nbsp;While the official PMI, released earlier this month, showed a less severe contraction, the divergence between the two surveys reflects the disproportionate impact on smaller Chinese firms. These businesses, which often have fewer resources and less diversification, have struggled to cope with the tariff hikes.&nbsp;“The downward pressure on the economy has significantly intensified,” said Wang Zhe, senior economist at Caixin Insight Group, as reported by Bloomberg. Many small and medium-sized enterprises (SMEs) are reporting higher costs and a slowdown in production, leading to job cuts.&nbsp;The latest figures also reveal that factory employment shrank for the second consecutive month, further illustrating the ongoing economic strain. With a large segment of the economy tied to export demand, the manufacturing sector is grappling with both external uncertainties and persistent domestic issues, including weak consumer demand and a struggling property market.&nbsp;Although there was some optimism about the recent trade truce between China and the US, the survey suggests the short-term effects are limited. The US had agreed to lower some of its tariff rates as part of a temporary 90-day trade ceasefire, but these adjustments have not yet translated into a significant rebound in the Chinese manufacturing sector.&nbsp;<h2>More stimulus needed?</h2>&nbsp;In response to the worsening economic outlook, Chinese authorities have already implemented a range of measures aimed at boosting domestic demand. These include interest rate cuts and changes to the reserve requirement ratio (RRR) to enhance liquidity.&nbsp;However, economists warn that these measures may not be enough to offset the trade war's long-term effects. As the global economy faces increasing pressures, especially from rising trade protectionism, China’s manufacturing sector is likely to continue its struggle in the months ahead.&nbsp;Analysts expect China to intensify efforts to support the economy, particularly by stimulating domestic consumption and addressing the persistent slump in the housing market. Without significant recovery in both external and internal demand, China’s path to economic stabilisation remains uncertain.

The Caixin/S&P Global manufacturing purchasing managers' index (PMI) declined to 48.3 in May from 50.4 in April, dipping below the critical 50-mark which signals contraction in the economy.

China’s manufacturing sector experienced its most significant downturn since September 2022, as a private-sector survey revealed a steep drop in activity, driven by the impact of the ongoing US tariff tension. The Caixin/S&P Global manufacturing purchasing managers' index (PMI) declined to 48.3 in May from 50.4 in April, dipping below the critical 50-mark which signals contraction in the economy. This marked the first contraction since last September and the weakest performance in over two years. The data came in significantly below analysts' expectations and underscored the growing impact of trade tensions on the world’s second-largest economy. The decline in the Caixin PMI, which primarily surveys small to medium-sized firms, pointed to a marked reduction in foreign demand, with new export orders falling at their fastest rate since July 2023. This steep drop in orders follows a pattern of worsening global trade conditions, exacerbated by US tariffs imposed during the trade war. Smaller exporters hit hard While the official PMI, released earlier this month, showed a less severe contraction, the divergence between the two surveys reflects the disproportionate impact on smaller Chinese firms. These businesses, which often have fewer resources and less diversification, have struggled to cope with the tariff hikes. “The downward pressure on the economy has significantly intensified,” said Wang Zhe, senior economist at Caixin Insight Group, as reported by Bloomberg. Many small and medium-sized enterprises (SMEs) are reporting higher costs and a slowdown in production, leading to job cuts. The latest figures also reveal that factory employment shrank for the second consecutive month, further illustrating the ongoing economic strain. With a large segment of the economy tied to export demand, the manufacturing sector is grappling with both external uncertainties and persistent domestic issues, including weak consumer demand and a struggling property market. Although there was some optimism about the recent trade truce between China and the US, the survey suggests the short-term effects are limited. The US had agreed to lower some of its tariff rates as part of a temporary 90-day trade ceasefire, but these adjustments have not yet translated into a significant rebound in the Chinese manufacturing sector. More stimulus needed? In response to the worsening economic outlook, Chinese authorities have already implemented a range of measures aimed at boosting domestic demand. These include interest rate cuts and changes to the reserve requirement ratio (RRR) to enhance liquidity. However, economists warn that these measures may not be enough to offset the trade war's long-term effects. As the global economy faces increasing pressures, especially from rising trade protectionism, China’s manufacturing sector is likely to continue its struggle in the months ahead. Analysts expect China to intensify efforts to support the economy, particularly by stimulating domestic consumption and addressing the persistent slump in the housing market. Without significant recovery in both external and internal demand, China’s path to economic stabilisation remains uncertain.

The Caixin/S&amp;P Global manufacturing purchasing managers' index (PMI) declined to 48.3 in May from 50.4 in April, dipping below the critical 50-mark which signals contraction in the economy.

China's manufacturing activity shrinks amid trade tensions and US tariffs

Elon Musk’s neurotechnology startup Neuralink has successfully raised $650 million in a Series E funding round, advancing its mission to merge the human brain with cutting-edge digital systems.&nbsp;This latest capital infusion comes just as Musk is refocusing on his core business ventures—Tesla, Neuralink, xAI and SpaceX—following his decision to step away from his role with the Trump administration's Department of Government Efficiency (DOGE).&nbsp;With support from high-profile investors like ARK Invest, Sequoia Capital, Founders Fund, and Thrive Capital, Neuralink is poised to accelerate its clinical trials and bring its life-changing technology to a broader group of patients.Neuralink is pushing the envelope on brain-computer interface (BCI) technology, aiming to restore critical abilities such as speech, mobility, and vision for people with severe neurological impairments. The funds raised will enable the company to expand clinical trial access and further develop advanced devices that aim to seamlessly integrate biological brains with artificial intelligence (AI).In a statement, Neuralink emphasised that the funding will help “restore independence for those with unmet medical needs” while pushing the boundaries of what's possible in neurotechnology. The company’s experimental devices, which decode neural signals to control computers and robotic systems, are already being used by five patients with severe paralysis. These patients are able to control both digital and physical devices using only their thoughts.The FDA recently granted Neuralink a ‘breakthrough’ designation for its speech restoration system, which could provide a much-needed alternative for those unable to communicate due to paralysis.&nbsp;This follows an earlier designation for its vision-restoring device, underscoring the potential of the technology to dramatically improve patients’ quality of life. Neuralink’s trials are underway in three countries—the US, China, and the UAE—with plans to expand as the technology evolves.&nbsp;<h2>Elon Musk's expanding empire</h2>&nbsp;This recent funding milestone comes as Musk shifts focus back to his business empire after stepping down from his advisory role in DOGE, the cost-cutting initiative he led within the Trump administration.&nbsp;With the new developments at xAI, Musk's AI company, and Neuralink advancing rapidly, Musk’s strategic pivot suggests an even stronger commitment to his tech ventures.In a related move, xAI has also raised significant funds, with a $5 billion debt package and a $300 million stock sale, valuing the company at $113 billion. Musk’s focus on xAI and Neuralink signals his intention to lead multiple frontier technologies, from AI to neurotechnology, and drive these industries toward new heights of innovation.Musk has emphasised the critical importance of AI, neurotechnology, and space exploration in shaping the future. “Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” Musk wrote in a post on X.&nbsp;Neuralink’s progress in clinical trials represents a crucial milestone in the development of brain-computer interfaces. The company is now looking to broaden its impact, expanding beyond a select group of patients to a wider demographic, while continuing to refine and perfect its devices.While the technology remains experimental, the potential for transformative change is clear. By helping people with disabilities regain lost functions, Neuralink could change the landscape of healthcare. The integration of AI with human cognition is still in its infancy, but with continued investment, the company could open the door to a future where cognitive and physical limitations are significantly reduced.Musk’s Neuralink and xAI have a shared vision of leveraging the power of artificial intelligence to enhance human capabilities, whether that’s by improving how we communicate, interact with the world, or even think.&nbsp;As more companies enter the brain-computer interface space, Neuralink’s leadership in the field could have a profound impact on both healthcare and the AI industry, making it a critical player in shaping how we interact with emerging technologies in the coming decades.With this new funding, Neuralink is set to deepen its commitment to innovation and continue its groundbreaking work, opening up new possibilities for a future where the lines between human cognition and artificial intelligence are increasingly blurred.

Neuralink is pushing the envelope on brain-computer interface (BCI) technology, aiming to restore critical abilities such as speech, mobility, and vision for people with severe neurological impairments.

Elon Musk’s neurotechnology startup Neuralink has successfully raised $650 million in a Series E funding round, advancing its mission to merge the human brain with cutting-edge digital systems. This latest capital infusion comes just as Musk is refocusing on his core business ventures—Tesla, Neuralink, xAI and SpaceX—following his decision to step away from his role with the Trump administration's Department of Government Efficiency (DOGE). With support from high-profile investors like ARK Invest, Sequoia Capital, Founders Fund, and Thrive Capital, Neuralink is poised to accelerate its clinical trials and bring its life-changing technology to a broader group of patients. Neuralink is pushing the envelope on brain-computer interface (BCI) technology, aiming to restore critical abilities such as speech, mobility, and vision for people with severe neurological impairments. The funds raised will enable the company to expand clinical trial access and further develop advanced devices that aim to seamlessly integrate biological brains with artificial intelligence (AI). In a statement, Neuralink emphasised that the funding will help “restore independence for those with unmet medical needs” while pushing the boundaries of what's possible in neurotechnology. The company’s experimental devices, which decode neural signals to control computers and robotic systems, are already being used by five patients with severe paralysis. These patients are able to control both digital and physical devices using only their thoughts. The FDA recently granted Neuralink a ‘breakthrough’ designation for its speech restoration system, which could provide a much-needed alternative for those unable to communicate due to paralysis. This follows an earlier designation for its vision-restoring device, underscoring the potential of the technology to dramatically improve patients’ quality of life. Neuralink’s trials are underway in three countries—the US, China, and the UAE—with plans to expand as the technology evolves. Elon Musk's expanding empire This recent funding milestone comes as Musk shifts focus back to his business empire after stepping down from his advisory role in DOGE, the cost-cutting initiative he led within the Trump administration. With the new developments at xAI, Musk's AI company, and Neuralink advancing rapidly, Musk’s strategic pivot suggests an even stronger commitment to his tech ventures. In a related move, xAI has also raised significant funds, with a $5 billion debt package and a $300 million stock sale, valuing the company at $113 billion. Musk’s focus on xAI and Neuralink signals his intention to lead multiple frontier technologies, from AI to neurotechnology, and drive these industries toward new heights of innovation. Musk has emphasised the critical importance of AI, neurotechnology, and space exploration in shaping the future. “Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” Musk wrote in a post on X. Neuralink’s progress in clinical trials represents a crucial milestone in the development of brain-computer interfaces. The company is now looking to broaden its impact, expanding beyond a select group of patients to a wider demographic, while continuing to refine and perfect its devices. While the technology remains experimental, the potential for transformative change is clear. By helping people with disabilities regain lost functions, Neuralink could change the landscape of healthcare. The integration of AI with human cognition is still in its infancy, but with continued investment, the company could open the door to a future where cognitive and physical limitations are significantly reduced. Musk’s Neuralink and xAI have a shared vision of leveraging the power of artificial intelligence to enhance human capabilities, whether that’s by improving how we communicate, interact with the world, or even think. As more companies enter the brain-computer interface space, Neuralink’s leadership in the field could have a profound impact on both healthcare and the AI industry, making it a critical player in shaping how we interact with emerging technologies in the coming decades. With this new funding, Neuralink is set to deepen its commitment to innovation and continue its groundbreaking work, opening up new possibilities for a future where the lines between human cognition and artificial intelligence are increasingly blurred.

Neuralink is pushing the envelope on brain-computer interface (BCI) technology, aiming to restore critical abilities such as speech, mobility, and vision for people with severe neurological impairments.

Elon Musk’s Neuralink raises $650 million to expand brain-computer interface technology

Tesla, the electric vehicle (EV) giant led by Elon Musk, has confirmed that it is not interested in manufacturing cars in India but plans to open showrooms in the country, Union Heavy Industries Minister H.D. Kumaraswamy said on June 2.The announcement came as the Indian government unveiled detailed guidelines for its new initiative aimed at promoting the manufacturing of electric passenger vehicles in India.Under the scheme, global automakers are encouraged to set up manufacturing facilities in India, with significant investments and commitments to local manufacturing. However, Tesla, which had previously shown interest in the Indian market, is not expected to participate in manufacturing under the scheme.“Tesla is more focused on starting showrooms in India, but they are not interested in setting up manufacturing units here,” Minister Kumaraswamy told reporters during a media briefing. While the EV maker has participated in early discussions regarding the scheme, it has not shown interest in moving forward with production plans in India.&nbsp;Other global EV makers show interest in India&nbsp;In stark contrast, other global automakers such as Mercedes-Benz, Volkswagen-Skoda, Hyundai, and Kia have expressed strong interest in the central government’s scheme and are keen to establish manufacturing units in India, according to Kumaraswamy. These companies have already indicated their intent to apply for the scheme once the official application process opens.Tesla’s reluctance to establish a production base in India is not entirely surprising. The company has previously voiced concerns over the country's high import duties, which can reach up to 110 per cent on foreign-made vehicles.However, the Indian government has announced a reduction in customs duties on electric vehicles (EVs) under its new policy, which allows a maximum of 8,000 imported EVs every year to be brought in at a reduced duty of 15 per cent for five years, provided the companies commit to local manufacturing.The scheme is expected to boost the country’s EV industry, generate employment, and align with India’s long-term goal of achieving net-zero emissions by 2070. To qualify for the reduced import duties, foreign companies must invest at least ₹4,150 crore (approximately $500 million) and meet certain local value addition targets.The window for applying under the scheme will open in the coming weeks, with the government looking to attract global players to set up a manufacturing base in India.While Tesla has opted to focus on imports and showrooms in India, the potential investment by Mercedes-Benz, Hyundai, and others signals a growing interest in India’s EV sector. The government's push to turn India into a global hub for EV manufacturing is poised to transform the country’s automotive landscape.With the global EV market becoming increasingly competitive, especially with the rise of Chinese EV manufacturers like BYD, the success of India’s new policy could have long-term implications for both the domestic and international automotive industries.

The announcement came as the Indian government unveiled detailed guidelines for its new initiative aimed at promoting the manufacturing of electric passenger vehicles in India.

Tesla, the electric vehicle (EV) giant led by Elon Musk, has confirmed that it is not interested in manufacturing cars in India but plans to open showrooms in the country, Union Heavy Industries Minister H.D. Kumaraswamy said on June 2. The announcement came as the Indian government unveiled detailed guidelines for its new initiative aimed at promoting the manufacturing of electric passenger vehicles in India. Under the scheme, global automakers are encouraged to set up manufacturing facilities in India, with significant investments and commitments to local manufacturing. However, Tesla, which had previously shown interest in the Indian market, is not expected to participate in manufacturing under the scheme. “Tesla is more focused on starting showrooms in India, but they are not interested in setting up manufacturing units here,” Minister Kumaraswamy told reporters during a media briefing. While the EV maker has participated in early discussions regarding the scheme, it has not shown interest in moving forward with production plans in India. Other global EV makers show interest in India In stark contrast, other global automakers such as Mercedes-Benz, Volkswagen-Skoda, Hyundai, and Kia have expressed strong interest in the central government’s scheme and are keen to establish manufacturing units in India, according to Kumaraswamy. These companies have already indicated their intent to apply for the scheme once the official application process opens. Tesla’s reluctance to establish a production base in India is not entirely surprising. The company has previously voiced concerns over the country's high import duties, which can reach up to 110 per cent on foreign-made vehicles. However, the Indian government has announced a reduction in customs duties on electric vehicles (EVs) under its new policy, which allows a maximum of 8,000 imported EVs every year to be brought in at a reduced duty of 15 per cent for five years, provided the companies commit to local manufacturing. The scheme is expected to boost the country’s EV industry, generate employment, and align with India’s long-term goal of achieving net-zero emissions by 2070. To qualify for the reduced import duties, foreign companies must invest at least ₹4,150 crore (approximately $500 million) and meet certain local value addition targets. The window for applying under the scheme will open in the coming weeks, with the government looking to attract global players to set up a manufacturing base in India. While Tesla has opted to focus on imports and showrooms in India, the potential investment by Mercedes-Benz, Hyundai, and others signals a growing interest in India’s EV sector. The government's push to turn India into a global hub for EV manufacturing is poised to transform the country’s automotive landscape. With the global EV market becoming increasingly competitive, especially with the rise of Chinese EV manufacturers like BYD, the success of India’s new policy could have long-term implications for both the domestic and international automotive industries.

The announcement came as the Indian government unveiled detailed guidelines for its new initiative aimed at promoting the manufacturing of electric passenger vehicles in India.

Tesla ditches India production plans, focuses on showroom expansion

US manufacturing contracted for the third consecutive month in May, signalling continued uncertainty in the sector as tariffs and trade tensions weighed heavily on businesses.The Institute for Supply Management (ISM) reported on June 2 that the Manufacturing Purchasing Managers' Index (PMI) fell to a six-month low of 48.5 in May, slightly down from 48.7 in April. A PMI reading below 50 indicates contraction, which represents about 10.2 per cent of the economy.Despite the drop, the PMI remained above the threshold of 42.3, a level that indicates expansion of the broader economy according to ISM. However, economists were expecting a higher reading, with many forecasting a rise to 49.3. Instead, the survey’s findings underscored a manufacturing sector still navigating a volatile trade environment, compounded by rising input costs, supply chain disruptions, and shifting tariff policies.The New Orders Index, a key measure of future demand, showed continued contraction for the fourth month in a row. It rose marginally to 47.6 in May, from 47.2 in April, but remained in negative territory.Similarly, the Backlog of Orders Index improved slightly, registering 47.1—up 3.4 percentage points from April, signalling a slower pace of decline in order backlogs. However, both of these indices suggest a muted demand outlook, as businesses continue to struggle with supply chain delays and rising costs.&nbsp;Tariff uncertainty exacerbates supply chain bottlenecks&nbsp;One of the most notable aspects of the ISM report was the sharp decline in the Imports Index, which plummeted to 39.9, a 7.2 percentage point drop from April. This marked the lowest reading for imports in 16 years and highlighted the growing strain on the supply chain as businesses hesitate to commit to new international orders due to unpredictable tariffs and trade policies.The uneven rollout and frequent changes to tariffs, particularly in the US-China trade relationship, have led to significant uncertainty. As a result, many manufacturers are pulling back from imports, and the forecast for future shipments remains bleak.The New Export Orders Index also contracted sharply to 40.1, reflecting retaliatory tariffs from other countries on US goods and a slowing global demand for US goods.Further complicating matters, the Supplier Deliveries Index rose to 56.1 in May, indicating that suppliers are taking longer to deliver goods. This is typically a sign of an economy in growth, but in this context, it suggests bottlenecks and delays caused by supply chain inefficiencies exacerbated by the tariff war.US port operators have reported declines in cargo volumes, further indicating disruptions in the movement of goods.Employment in manufacturing also remained sluggish, with the Employment Index inching up slightly to 46.8 in May from 46.5 in April. While the index indicates a slight improvement, it remains firmly in contraction territory, reflecting ongoing layoffs in the sector.Manufacturers are increasingly turning to layoffs rather than natural attrition to reduce labour costs, with headcount reductions continuing across several industries.&nbsp;Factories face rising costs, but hope for resolution lingers&nbsp;The ISM’s Price Index, which measures the cost of materials and inputs for manufacturers, remained elevated at 69.4, down slightly from 69.8 in April. Though prices have slightly moderated, they continue to reflect the strain on businesses as tariffs and supply chain issues push up costs.Despite the ongoing contraction in the sector, there is cautious optimism among some industry leaders. Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, emphasised that the overall economy remains in expansion, and she expressed hope that tariff uncertainties would soon be resolved.“We are really hopeful that the tariff uncertainties can come to a conclusion nd that purchasing managers can focus on the normality of what their job should be,” Spence said.

US manufacturing PMI dips to six-month low of 48.5 amid ongoing supply chain challenges and unpredictable tariff policies.

US manufacturing contracted for the third consecutive month in May, signalling continued uncertainty in the sector as tariffs and trade tensions weighed heavily on businesses. The Institute for Supply Management (ISM) reported on June 2 that the Manufacturing Purchasing Managers' Index (PMI) fell to a six-month low of 48.5 in May, slightly down from 48.7 in April. A PMI reading below 50 indicates contraction, which represents about 10.2 per cent of the economy. Despite the drop, the PMI remained above the threshold of 42.3, a level that indicates expansion of the broader economy according to ISM. However, economists were expecting a higher reading, with many forecasting a rise to 49.3. Instead, the survey’s findings underscored a manufacturing sector still navigating a volatile trade environment, compounded by rising input costs, supply chain disruptions, and shifting tariff policies. The New Orders Index, a key measure of future demand, showed continued contraction for the fourth month in a row. It rose marginally to 47.6 in May, from 47.2 in April, but remained in negative territory. Similarly, the Backlog of Orders Index improved slightly, registering 47.1—up 3.4 percentage points from April, signalling a slower pace of decline in order backlogs. However, both of these indices suggest a muted demand outlook, as businesses continue to struggle with supply chain delays and rising costs. Tariff uncertainty exacerbates supply chain bottlenecks One of the most notable aspects of the ISM report was the sharp decline in the Imports Index, which plummeted to 39.9, a 7.2 percentage point drop from April. This marked the lowest reading for imports in 16 years and highlighted the growing strain on the supply chain as businesses hesitate to commit to new international orders due to unpredictable tariffs and trade policies. The uneven rollout and frequent changes to tariffs, particularly in the US-China trade relationship, have led to significant uncertainty. As a result, many manufacturers are pulling back from imports, and the forecast for future shipments remains bleak. The New Export Orders Index also contracted sharply to 40.1, reflecting retaliatory tariffs from other countries on US goods and a slowing global demand for US goods. Further complicating matters, the Supplier Deliveries Index rose to 56.1 in May, indicating that suppliers are taking longer to deliver goods. This is typically a sign of an economy in growth, but in this context, it suggests bottlenecks and delays caused by supply chain inefficiencies exacerbated by the tariff war. US port operators have reported declines in cargo volumes, further indicating disruptions in the movement of goods. Employment in manufacturing also remained sluggish, with the Employment Index inching up slightly to 46.8 in May from 46.5 in April. While the index indicates a slight improvement, it remains firmly in contraction territory, reflecting ongoing layoffs in the sector. Manufacturers are increasingly turning to layoffs rather than natural attrition to reduce labour costs, with headcount reductions continuing across several industries. Factories face rising costs, but hope for resolution lingers The ISM’s Price Index, which measures the cost of materials and inputs for manufacturers, remained elevated at 69.4, down slightly from 69.8 in April. Though prices have slightly moderated, they continue to reflect the strain on businesses as tariffs and supply chain issues push up costs. Despite the ongoing contraction in the sector, there is cautious optimism among some industry leaders. Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, emphasised that the overall economy remains in expansion, and she expressed hope that tariff uncertainties would soon be resolved. “We are really hopeful that the tariff uncertainties can come to a conclusion nd that purchasing managers can focus on the normality of what their job should be,” Spence said.

US manufacturing PMI dips to six-month low of 48.5 amid ongoing supply chain challenges and unpredictable tariff policies.

US manufacturing slows as tariff uncertainty drives contraction in May

In a move reflecting urgency within the Trump administration, the United States is asking trade partners to submit their best offers by Wednesday (June 4) in an effort to expedite negotiations before a self-imposed deadline in early July.The White House, which has yet to finalise major agreements since President Donald Trump paused tariffs for 90 days on April 9, is aiming to complete as many deals as possible by the expiration of this pause on July 8.According to Reuters, the US Trade Representative has directed countries involved in active negotiations to submit proposals in a variety of key areas, including tariffs and quotas on US industrial and agricultural products.Additionally, Washington is pushing for trade partners to outline plans for addressing non-tariff barriers, committing to digital trade rules, and ensuring economic security. The administration plans to evaluate the responses quickly and offer a “possible landing zone” that could involve reciprocal tariff rates, Reuters&nbsp;reported.The draft letter that the news report referred to did not specify which countries would receive the request, though it is expected that negotiations with the European Union (EU), Japan, Vietnam, India, South Korea and other nations currently engaged in trade talks will be among the recipients.&nbsp;Racing against time&nbsp;As the clock ticks toward the July 8 deadline, the Trump administration has ramped up efforts to wrap up multiple trade deals. While officials have expressed optimism, only one deal has been announced since the pause on tariffs—a limited framework with Britain.Negotiations with other countries, including major US trading partners, remain ongoing, raising concerns about whether the ambitious target of “90 deals in 90 days” will be met.Deputy Treasury Secretary Michael Faulkender acknowledged on June 2 that while significant progress has been made, only a few deals are close to completion.“As long as we continue to make progress, I think you’re going to see a lot more deals that are announced prior to that July 9 time frame,” Faulkender told CNBC.Despite the apparent lack of finalised agreements, Reuters reported that White House economic adviser Kevin Hassett remains optimistic. He emphasised that the Trump administration aims to “reach at least terms of an agreement prior to the expiration of that pause”, stressing the importance of goodwill from trade partners to continue making progress toward closing deals.However, the White House faces the challenge of navigating complex negotiations. With little time remaining, Faulkender admitted that the process can be slow and complicated. Still, he expressed confidence that substantial progress could be achieved in the coming weeks. “We are looking to conclude as many discussions as possible before the pause ends,” he said.&nbsp;Legal challenges loom&nbsp;The legal basis for Trump’s tariff policies remains in question. Last week, the US Court of International Trade ruled that the Trump administration had overstepped its authority in using the International Emergency Economic Powers Act (IEEPA) to impose tariffs, including the controversial “Liberation Day” levies. These tariffs targeted countries such as Canada, Mexico, and China, accusing them of facilitating the flow of fentanyl into the US.However, the ruling was quickly stayed by an appeals court, allowing the tariffs to remain in effect while the legal battle continues.Reuters&nbsp;reported that the draft letter sent to trading partners warns that, regardless of the ongoing litigation, Trump intends to continue his tariff programme through other legal channels, if necessary. “It is important that we continue our discussions on these matters," the letter states.The White House has also faced increasing tension with China, as the two nations continue to clash over trade and economic issues. The Trump administration accused China of violating a preliminary trade agreement by delaying the renewal of critical mineral exports to the US.Meanwhile, China has pushed back, accusing the US of undermining the deal with new restrictions on Chinese student visas and other measures.Despite these tensions, Kevin Hassett hinted on June 1 that a potential meeting between Trump and Chinese President Xi Jinping could take place as soon as this week. The outcome of these discussions may have significant implications for the future of US-China trade relations.As the deadline draws nearer, the Trump administration remains determined to finalise as many trade agreements as possible, but whether it can achieve its ambitious goals remains uncertain.

the Trump administration has ramped up efforts to wrap up multiple trade deals. While officials have expressed optimism, only one deal has been announced since the pause on tariffs—a limited framework with Britain.

In a move reflecting urgency within the Trump administration, the United States is asking trade partners to submit their best offers by Wednesday (June 4) in an effort to expedite negotiations before a self-imposed deadline in early July. The White House, which has yet to finalise major agreements since President Donald Trump paused tariffs for 90 days on April 9, is aiming to complete as many deals as possible by the expiration of this pause on July 8. According to Reuters, the US Trade Representative has directed countries involved in active negotiations to submit proposals in a variety of key areas, including tariffs and quotas on US industrial and agricultural products. Additionally, Washington is pushing for trade partners to outline plans for addressing non-tariff barriers, committing to digital trade rules, and ensuring economic security. The administration plans to evaluate the responses quickly and offer a “possible landing zone” that could involve reciprocal tariff rates, Reuters reported. The draft letter that the news report referred to did not specify which countries would receive the request, though it is expected that negotiations with the European Union (EU), Japan, Vietnam, India, South Korea and other nations currently engaged in trade talks will be among the recipients. Racing against time As the clock ticks toward the July 8 deadline, the Trump administration has ramped up efforts to wrap up multiple trade deals. While officials have expressed optimism, only one deal has been announced since the pause on tariffs—a limited framework with Britain. Negotiations with other countries, including major US trading partners, remain ongoing, raising concerns about whether the ambitious target of “90 deals in 90 days” will be met. Deputy Treasury Secretary Michael Faulkender acknowledged on June 2 that while significant progress has been made, only a few deals are close to completion. “As long as we continue to make progress, I think you’re going to see a lot more deals that are announced prior to that July 9 time frame,” Faulkender told CNBC. Despite the apparent lack of finalised agreements, Reuters reported that White House economic adviser Kevin Hassett remains optimistic. He emphasised that the Trump administration aims to “reach at least terms of an agreement prior to the expiration of that pause”, stressing the importance of goodwill from trade partners to continue making progress toward closing deals. However, the White House faces the challenge of navigating complex negotiations. With little time remaining, Faulkender admitted that the process can be slow and complicated. Still, he expressed confidence that substantial progress could be achieved in the coming weeks. “We are looking to conclude as many discussions as possible before the pause ends,” he said. Legal challenges loom The legal basis for Trump’s tariff policies remains in question. Last week, the US Court of International Trade ruled that the Trump administration had overstepped its authority in using the International Emergency Economic Powers Act (IEEPA) to impose tariffs, including the controversial “Liberation Day” levies. These tariffs targeted countries such as Canada, Mexico, and China, accusing them of facilitating the flow of fentanyl into the US. However, the ruling was quickly stayed by an appeals court, allowing the tariffs to remain in effect while the legal battle continues. Reuters reported that the draft letter sent to trading partners warns that, regardless of the ongoing litigation, Trump intends to continue his tariff programme through other legal channels, if necessary. “It is important that we continue our discussions on these matters," the letter states. The White House has also faced increasing tension with China, as the two nations continue to clash over trade and economic issues. The Trump administration accused China of violating a preliminary trade agreement by delaying the renewal of critical mineral exports to the US. Meanwhile, China has pushed back, accusing the US of undermining the deal with new restrictions on Chinese student visas and other measures. Despite these tensions, Kevin Hassett hinted on June 1 that a potential meeting between Trump and Chinese President Xi Jinping could take place as soon as this week. The outcome of these discussions may have significant implications for the future of US-China trade relations. As the deadline draws nearer, the Trump administration remains determined to finalise as many trade agreements as possible, but whether it can achieve its ambitious goals remains uncertain.

The Trump administration has ramped up efforts to wrap up multiple trade deals. While officials have expressed optimism, only one deal has been announced since the pause on tariffs—a limited framework with Britain.

US asks trade partners to submit best offers by June 4 as deadline looms

India’s Goods and Services Tax (GST) collections remained above the ₹2 lakh crore mark (approx. $24.1 billion) for the second consecutive month in May 2025, registering a robust 16.4 per cent year-on-year growth.&nbsp;&nbsp;The latest data, released by the Ministry of Finance, comes just days before the Reserve Bank of India (RBI) convenes for its bi-monthly Monetary Policy Committee (MPC) meeting on 4 June.&nbsp;The total GST revenue stood at ₹2.01 lakh crore ($24.1 billion) in May, compared to ₹1.72 lakh crore ($20.6 billion) in May 2024.&nbsp; &nbsp;This follows a record ₹2.37 lakh crore ($28.4 billion) collection in April 2025. Net revenue after refunds amounted to ₹1.74 lakh crore ($20.8 billion), a sharp 20.4 per cent rise from the ₹1.44 lakh crore ($17.2 billion) collected in May last year.<h2>Import-led growth raises questions on consumption patterns</h2>The growth was driven largely by import-related taxes. GST revenue from imports rose 25.2 per cent to ₹51,266 crore ($6.2 billion), while domestic transactions contributed ₹1.50 lakh crore ($18 billion)—up 13.7 per cent from the previous year.&nbsp;&nbsp;Total refunds issued declined 4 per cent to ₹27,210 crore ($3.26 billion).&nbsp;“The 16 per cent growth in GST collections in the month shows a renewed upward momentum after a few months of growth in the range of 11–12 per cent,” Pratik Jain, Partner at Price Waterhouse &amp; Co LLP, told PTI. “If this growth sustains over the next few months, it might provide a cushion for the government to consider rate rationalisation, on which significant groundwork has already been done,” he added.&nbsp;However, experts warn that the growth pattern is not uniform across India. States like Maharashtra, West Bengal, Karnataka, and Tamil Nadu posted strong collection growth of 17–25 per cent, while states such as Gujarat and Telangana lagged with growth below 6 per cent, according to M S Mani, Partner at Deloitte India, quoted by PTI.&nbsp;“The average growth across the country does not appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors which require deeper, data-based analysis,” Mani said.<h2>Domestic demand lags, import surge continues</h2>Several tax analysts believe the growth is being powered by imports rather than domestic consumption. Vivek Jalan, Partner at Tax Connect Advisory Services LLP, told PTI&nbsp;that while import-related GST rose nearly 73 per cent, domestic revenue growth was modest in comparison. “This, coupled with the fact that export refunds are not growing correspondingly, reflects the fact that import growth far exceeds export growth,” Jalan explained.&nbsp;EY India’s Saurabh Agarwal also told PTI&nbsp;that similar numbers could be seen in June owing to ongoing geopolitical developments impacting global trade flows.<h2>RBI to weigh strong GST data and soft inflation in June MPC meeting</h2>The strong GST collections—an indicator of sustained economic activity—arrive just as the Reserve Bank of India prepares for its rate-setting Monetary Policy Committee (MPC) meeting, scheduled from 4–6 June.&nbsp; Economists widely expect the six-member panel to deliver a 25-basis point rate cut, reducing the repo rate from 6 per cent to 5.75 per cent, in what could be the third consecutive rate cut in 2025. The move is backed by a steep fall in inflation. India’s consumer price index (CPI) dropped to 3.2 per cent in April, the lowest in nearly five years. This aligns well within the RBI’s flexible inflation targeting framework of 4 per cent ± 2 per cent.&nbsp; According to the RBI’s annual report, “The benign inflation outlook and moderate growth warrant monetary policy to be growth supportive, while remaining watchful about rapidly evolving global macroeconomic conditions.” Market participants and lenders are also anticipating a total of 50 basis points in rate cuts for FY26, which would help lower external benchmark lending rates (EBLR) and reduce borrowing costs for home, auto and personal loans.&nbsp; As GST revenues remain strong and inflation eases, the central bank may find ample headroom to support India’s growth trajectory through accommodative monetary policy.&nbsp;

The most recent GST figures, published by the Ministry of Finance, arrive only days ahead of the Reserve Bank of India (RBI) gathering for its bi-monthly Monetary Policy Committee (MPC) session on 4 June.

India’s Goods and Services Tax (GST) collections remained above the ₹2 lakh crore mark (approx. $24.1 billion) for the second consecutive month in May 2025, registering a robust 16.4 per cent year-on-year growth. The latest data, released by the Ministry of Finance, comes just days before the Reserve Bank of India (RBI) convenes for its bi-monthly Monetary Policy Committee (MPC) meeting on 4 June. The total GST revenue stood at ₹2.01 lakh crore ($24.1 billion) in May, compared to ₹1.72 lakh crore ($20.6 billion) in May 2024. This follows a record ₹2.37 lakh crore ($28.4 billion) collection in April 2025. Net revenue after refunds amounted to ₹1.74 lakh crore ($20.8 billion), a sharp 20.4 per cent rise from the ₹1.44 lakh crore ($17.2 billion) collected in May last year. Import-led growth raises questions on consumption patterns The growth was driven largely by import-related taxes. GST revenue from imports rose 25.2 per cent to ₹51,266 crore ($6.2 billion), while domestic transactions contributed ₹1.50 lakh crore ($18 billion)—up 13.7 per cent from the previous year. Total refunds issued declined 4 per cent to ₹27,210 crore ($3.26 billion). “The 16 per cent growth in GST collections in the month shows a renewed upward momentum after a few months of growth in the range of 11–12 per cent,” Pratik Jain, Partner at Price Waterhouse & Co LLP, told PTI. “If this growth sustains over the next few months, it might provide a cushion for the government to consider rate rationalisation, on which significant groundwork has already been done,” he added. However, experts warn that the growth pattern is not uniform across India. States like Maharashtra, West Bengal, Karnataka, and Tamil Nadu posted strong collection growth of 17–25 per cent, while states such as Gujarat and Telangana lagged with growth below 6 per cent, according to M S Mani, Partner at Deloitte India, quoted by PTI. “The average growth across the country does not appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors which require deeper, data-based analysis,” Mani said. Domestic demand lags, import surge continues Several tax analysts believe the growth is being powered by imports rather than domestic consumption. Vivek Jalan, Partner at Tax Connect Advisory Services LLP, told PTI that while import-related GST rose nearly 73 per cent, domestic revenue growth was modest in comparison. “This, coupled with the fact that export refunds are not growing correspondingly, reflects the fact that import growth far exceeds export growth,” Jalan explained. EY India’s Saurabh Agarwal also told PTI that similar numbers could be seen in June owing to ongoing geopolitical developments impacting global trade flows. RBI to weigh strong GST data and soft inflation in June MPC meeting The strong GST collections—an indicator of sustained economic activity—arrive just as the Reserve Bank of India prepares for its rate-setting Monetary Policy Committee (MPC) meeting, scheduled from 4–6 June. Economists widely expect the six-member panel to deliver a 25-basis point rate cut, reducing the repo rate from 6 per cent to 5.75 per cent, in what could be the third consecutive rate cut in 2025. The move is backed by a steep fall in inflation. India’s consumer price index (CPI) dropped to 3.2 per cent in April, the lowest in nearly five years. This aligns well within the RBI’s flexible inflation targeting framework of 4 per cent ± 2 per cent. According to the RBI’s annual report, “The benign inflation outlook and moderate growth warrant monetary policy to be growth supportive, while remaining watchful about rapidly evolving global macroeconomic conditions.” Market participants and lenders are also anticipating a total of 50 basis points in rate cuts for FY26, which would help lower external benchmark lending rates (EBLR) and reduce borrowing costs for home, auto and personal loans. As GST revenues remain strong and inflation eases, the central bank may find ample headroom to support India’s growth trajectory through accommodative monetary policy.

In May 2025, India's Goods and Services Tax (GST) collections exceeded ₹2 lakh crore (around $24.1 billion) for the second month in a row, showing a strong year-on-year growth of 16.4 percent.

India’s GST collections cross $24 billion in May: What it signals before RBI policy review

Russia’s central bank governor Elvira Nabiullina is reportedly facing growing pressure from the Kremlin to cut interest rates from their record-high level, as recession fears mount and war-time spending begins to strain the economy. &nbsp;The benchmark interest rate stands at 21 percent—it's highest since the invasion of Ukraine in 2022—following a series of aggressive hikes aimed at defending the ruble and containing inflation.&nbsp; &nbsp;However, top Kremlin officials are now urging a shift in policy.&nbsp;&nbsp;According to Bloomberg, discussions are underway to slash rates as early as the upcoming central bank meeting this Friday, with officials eyeing a 200 to 300 basis-point cut to ease borrowing costs.&nbsp;Nabiullina, once praised for stabilising Russia’s financial system through capital controls and emergency tightening, is now being blamed for stalling investment and pushing non-military sectors into stagnation.&nbsp; &nbsp;Bloomberg Economics reports that while inflation has cooled to 6.2 percent in April, down from 10.7 percent in January 2025—this drop is largely due to temporary ruble strength, which may not be sustainable.&nbsp;Russia’s industrial giants are already feeling the pinch. Severstal PJSC, one of the country’s largest steelmakers, posted a negative cash flow of 33 billion rubles ($421 million) in Q1 2025, compared to a positive 33 billion rubles in the same period last year—citing weak domestic demand and delayed projects due to high borrowing costs. &nbsp;Finance Minister Anton Siluanov, Economy Minister Maxim Reshetnikov, and First Deputy Prime Minister Denis Manturov have all reportedly hinted at the need for a policy pivot to rescue struggling civilian industries and avoid a deeper economic slowdown.<h2>War and sanctions continue to squeeze the Russian economy</h2>More than three years into its full-scale invasion of Ukraine, Russia’s economy remains under severe pressure from Western sanctions, war-related destruction, and the soaring cost of maintaining an extended military campaign.&nbsp; &nbsp;According to Reuters&nbsp;and the International Monetary Fund (IMF), sanctions imposed by the US, EU, UK, and their allies have triggered some of the harshest restrictions on any major economy in recent history.&nbsp;&nbsp;These include asset freezes and SWIFT bans on major Russian banks, export controls on semiconductors, aviation parts, and industrial machinery, as well as oil price caps, shipping restrictions, and bans on Western investment and technology transfers. &nbsp;These measures have left deep scars on Russia’s economic structure. Russia’s GDP, after a brief rebound in 2023, is expected to grow only 0.8 to 1.2 percent in 2025, according to IMF projections, far below pre-war levels. Inflation, which peaked above 12 percent in 2023, forced the central bank to raise interest rates to a record 21 percent, where they remain.&nbsp;&nbsp;These high borrowing costs have throttled credit availability, dampened investment, and hit civilian industries particularly hard. Energy revenues, the backbone of Russia’s economy, have collapsed.&nbsp; &nbsp;As per Bloomberg&nbsp;and the International Energy Agency (IEA), oil and gas export revenues fell by over 40 percent between 2022 and 2024 due to sanctions and discounted sales to non-Western buyers like China and India.<h2>Ruble volatility, industrial strain, and brain drain deepen the crisis</h2>The Russian ruble has undergone repeated devaluations since the war began. Despite tight capital controls, the currency remains fragile, creating import bottlenecks and adding to inflationary pressure.&nbsp;Industrial disruptions are also mounting. With restricted access to Western technology and components, Russia’s aviation sector is now cannibalising grounded aircraft for spare parts.&nbsp;&nbsp;Automakers and electronics manufacturers are reportedly struggling to localise production without imported machinery.&nbsp;Beyond economics, the war has triggered an exodus of human capital.&nbsp; &nbsp;According to the Carnegie Endowment, more than 1 million Russians, including IT professionals, scientists, and business leaders have left the country since 2022. Coupled with tightened visa regimes and travel bans, this brain drain has accelerated Russia’s international isolation.<h2>A pivot to China and India — but with limits</h2>To cushion the impact, Moscow has pivoted eastward, strengthening trade with China, India, Iran, and the Gulf.&nbsp; According to Bloomberg, trade with China hit a record $240 billion in 2024, while Indian imports of Russian oil have surged by over 50 percent since 2022. However, this realignment has limits. Chinese and Indian capital cannot fully replace Western investment and technology.&nbsp; Most Russian firms now operate in a two-speed economy, where defence-linked sectors thrive while consumer and tech industries languish. Although trade with Asia is helping Moscow stay afloat, it is not enough to reignite broad-based growth.&nbsp; As inflation, fiscal strain, and industrial stagnation persist, the Kremlin sees monetary easing as a political and economic necessity. The central bank’s next move could prove pivotal, not just for Russia’s economy, but for its ability to sustain the cost of a prolonged war in an increasingly isolated global position.&nbsp;

The benchmark interest rate is at 21 percent—its peak since the 2022 invasion of Ukraine—after a number of aggressive increases intended to protect the ruble and control inflation.

Russia’s central bank governor Elvira Nabiullina is reportedly facing growing pressure from the Kremlin to cut interest rates from their record-high level, as recession fears mount and war-time spending begins to strain the economy. The benchmark interest rate stands at 21 percent—it's highest since the invasion of Ukraine in 2022—following a series of aggressive hikes aimed at defending the ruble and containing inflation. However, top Kremlin officials are now urging a shift in policy. According to Bloomberg, discussions are underway to slash rates as early as the upcoming central bank meeting this Friday, with officials eyeing a 200 to 300 basis-point cut to ease borrowing costs. Nabiullina, once praised for stabilising Russia’s financial system through capital controls and emergency tightening, is now being blamed for stalling investment and pushing non-military sectors into stagnation. Bloomberg Economics reports that while inflation has cooled to 6.2 percent in April, down from 10.7 percent in January 2025—this drop is largely due to temporary ruble strength, which may not be sustainable. Russia’s industrial giants are already feeling the pinch. Severstal PJSC, one of the country’s largest steelmakers, posted a negative cash flow of 33 billion rubles ($421 million) in Q1 2025, compared to a positive 33 billion rubles in the same period last year—citing weak domestic demand and delayed projects due to high borrowing costs. Finance Minister Anton Siluanov, Economy Minister Maxim Reshetnikov, and First Deputy Prime Minister Denis Manturov have all reportedly hinted at the need for a policy pivot to rescue struggling civilian industries and avoid a deeper economic slowdown. War and sanctions continue to squeeze the Russian economy More than three years into its full-scale invasion of Ukraine, Russia’s economy remains under severe pressure from Western sanctions, war-related destruction, and the soaring cost of maintaining an extended military campaign. According to Reuters and the International Monetary Fund (IMF), sanctions imposed by the US, EU, UK, and their allies have triggered some of the harshest restrictions on any major economy in recent history. These include asset freezes and SWIFT bans on major Russian banks, export controls on semiconductors, aviation parts, and industrial machinery, as well as oil price caps, shipping restrictions, and bans on Western investment and technology transfers. These measures have left deep scars on Russia’s economic structure. Russia’s GDP, after a brief rebound in 2023, is expected to grow only 0.8 to 1.2 percent in 2025, according to IMF projections, far below pre-war levels. Inflation, which peaked above 12 percent in 2023, forced the central bank to raise interest rates to a record 21 percent, where they remain. These high borrowing costs have throttled credit availability, dampened investment, and hit civilian industries particularly hard. Energy revenues, the backbone of Russia’s economy, have collapsed. As per Bloomberg and the International Energy Agency (IEA), oil and gas export revenues fell by over 40 percent between 2022 and 2024 due to sanctions and discounted sales to non-Western buyers like China and India. Ruble volatility, industrial strain, and brain drain deepen the crisis The Russian ruble has undergone repeated devaluations since the war began. Despite tight capital controls, the currency remains fragile, creating import bottlenecks and adding to inflationary pressure. Industrial disruptions are also mounting. With restricted access to Western technology and components, Russia’s aviation sector is now cannibalising grounded aircraft for spare parts. Automakers and electronics manufacturers are reportedly struggling to localise production without imported machinery. Beyond economics, the war has triggered an exodus of human capital. According to the Carnegie Endowment, more than 1 million Russians, including IT professionals, scientists, and business leaders have left the country since 2022. Coupled with tightened visa regimes and travel bans, this brain drain has accelerated Russia’s international isolation. A pivot to China and India — but with limits To cushion the impact, Moscow has pivoted eastward, strengthening trade with China, India, Iran, and the Gulf. According to Bloomberg, trade with China hit a record $240 billion in 2024, while Indian imports of Russian oil have surged by over 50 percent since 2022. However, this realignment has limits. Chinese and Indian capital cannot fully replace Western investment and technology. Most Russian firms now operate in a two-speed economy, where defence-linked sectors thrive while consumer and tech industries languish. Although trade with Asia is helping Moscow stay afloat, it is not enough to reignite broad-based growth. As inflation, fiscal strain, and industrial stagnation persist, the Kremlin sees monetary easing as a political and economic necessity. The central bank’s next move could prove pivotal, not just for Russia’s economy, but for its ability to sustain the cost of a prolonged war in an increasingly isolated global position.

Elvira Nabiullina, the governor of Russia's central bank, is experiencing increasing pressure from the Kremlin to lower interest rates from their unprecedented high.&nbsp;

Kremlin pressures Russia’s top banker to slash rates as sanctions hit economy

Asia’s manufacturing sector is under pressure as US President Donald Trump’s renewed tariff offensive sends shockwaves through global trade.&nbsp;From Vietnam to South Korea, Taiwan to Japan, factory activity contracted sharply in May 2025, with Purchasing Managers’ Index (PMI) readings slipping below the 50-mark that separates growth from contraction, according to S&amp;P Global data cited by Reuters.&nbsp;The downturn highlights growing uncertainty as Trump’s protectionist policies, aimed at rebalancing American trade—begin to disrupt supply chains and dent export-driven economies across the region.<h2>Vietnam’s exports slump amid tariff shock</h2>Vietnam’s manufacturing sector is bearing the brunt of Washington’s aggressive stance. New export orders declined for the seventh straight month in May, pushing factory activity deeper into contraction.&nbsp;Input costs fell for the first time in nearly two years, signalling weak demand and easing global commodity prices, according to S&amp;P Global, cited by Bloomberg.&nbsp;The pain stems largely from a 46 per cent reciprocal tariff the US imposed on Vietnamese goods in April. The US is a key destination for Vietnamese exports, and the tariff shock has shaken business confidence.&nbsp;Still, there is some optimism. A few firms cited “tariff stability” and improved production outlooks amid early-stage trade deals with the US and UK, S&amp;P Global noted.<h2>South Korea’s output plunges, steel sector under pressure</h2>South Korea’s PMI fell to 47.7 in May, the fourth straight month of contraction. New orders dropped at the sharpest rate in five years, and factory output posted its worst performance in nearly three years, Reuters reported.&nbsp;The most severe blow is being felt in the steel and aluminium sectors. Trump has doubled tariffs to 50 per cent on Korean metals, triggering alarm among exporters. South Korea’s Trade Ministry said it is working to “minimise the damage,” while urging calm, according to Reuters.&nbsp;Bank of Korea Governor Rhee Chang-yong warned of a domino effect, noting that South Korea’s deep supply chain ties with China could amplify the tariff impact. South Korea’s exports to the US fell 8.1 per cent in May, a sharp reversal after a brief spike during Trump’s 90-day tariff pause, Bloomberg reported.<h2>Taiwan and Indonesia's demand weakens</h2>Taiwan’s manufacturing sector contracted for the second straight month. Export sales fell, and companies cited client hesitation and uncertain demand conditions driven by US tariff uncertainty.Businesses have begun cutting back on purchases and hiring, according to S&amp;P Global, reported by Bloomberg.&nbsp;In Indonesia, the picture is similarly bleak. New orders fell at their steepest pace since August 2021, indicating broader weakness in consumer demand across the ASEAN region, according to Reuters.<h2>Japan's prolonged contraction continues</h2>Japan’s PMI came in at 49.4 in May, marking the 11th consecutive month of contraction, according to Reuters.&nbsp;Though the downturn is less severe than in neighbouring economies, it points to long-term structural weakness in Japanese manufacturing, driven by sluggish exports and high input costs.<h2>Philippines' growth momentum slows</h2>The Philippines once a regional outlier is now also showing signs of slowing. Factory activity continued to expand in May, but at a much slower pace, as regional headwinds spread, Bloomberg reported.&nbsp;Businesses are reportedly becoming more cautious as demand from major export markets softens.<h2>US-China's fresh trade flare-up threatens fragile truce</h2>In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns. Beijing hit back with retaliatory duties of up to 125 per cent.&nbsp;While both sides briefly agreed to scale back some tariffs during talks in Geneva last month, relations have soured again.&nbsp;The US recently imposed new export restrictions on chip design software and AI technologies and revoked visas for Chinese students. It also banned exports of jet engine parts to China.&nbsp;According to Bloomberg, the US Trade Representative accused China of failing to uphold the Geneva agreement by not accelerating exports of critical minerals.&nbsp;Beijing, in turn, called the moves a “serious violation” of the truce. China’s Ministry of Commerce said it would take “resolute and forceful measures” if Washington continued to escalate, rejecting the US claims as “unjustified.”

Factory activity in May 2025 contracted sharply across Vietnam, South Korea, Taiwan, and Japan, with Purchasing Managers Index (PMI) readings slipping below the 50-mark. 

Asia’s manufacturing sector is under pressure as US President Donald Trump’s renewed tariff offensive sends shockwaves through global trade. From Vietnam to South Korea, Taiwan to Japan, factory activity contracted sharply in May 2025, with Purchasing Managers’ Index (PMI) readings slipping below the 50-mark that separates growth from contraction, according to S&P Global data cited by Reuters. The downturn highlights growing uncertainty as Trump’s protectionist policies, aimed at rebalancing American trade—begin to disrupt supply chains and dent export-driven economies across the region. Vietnam’s exports slump amid tariff shock Vietnam’s manufacturing sector is bearing the brunt of Washington’s aggressive stance. New export orders declined for the seventh straight month in May, pushing factory activity deeper into contraction. Input costs fell for the first time in nearly two years, signalling weak demand and easing global commodity prices, according to S&P Global, cited by Bloomberg. The pain stems largely from a 46 per cent reciprocal tariff the US imposed on Vietnamese goods in April. The US is a key destination for Vietnamese exports, and the tariff shock has shaken business confidence. Still, there is some optimism. A few firms cited “tariff stability” and improved production outlooks amid early-stage trade deals with the US and UK, S&P Global noted. South Korea’s output plunges, steel sector under pressure South Korea’s PMI fell to 47.7 in May, the fourth straight month of contraction. New orders dropped at the sharpest rate in five years, and factory output posted its worst performance in nearly three years, Reuters reported. The most severe blow is being felt in the steel and aluminium sectors. Trump has doubled tariffs to 50 per cent on Korean metals, triggering alarm among exporters. South Korea’s Trade Ministry said it is working to “minimise the damage,” while urging calm, according to Reuters. Bank of Korea Governor Rhee Chang-yong warned of a domino effect, noting that South Korea’s deep supply chain ties with China could amplify the tariff impact. South Korea’s exports to the US fell 8.1 per cent in May, a sharp reversal after a brief spike during Trump’s 90-day tariff pause, Bloomberg reported. Taiwan and Indonesia's demand weakens Taiwan’s manufacturing sector contracted for the second straight month. Export sales fell, and companies cited client hesitation and uncertain demand conditions driven by US tariff uncertainty. Businesses have begun cutting back on purchases and hiring, according to S&P Global, reported by Bloomberg. In Indonesia, the picture is similarly bleak. New orders fell at their steepest pace since August 2021, indicating broader weakness in consumer demand across the ASEAN region, according to Reuters. Japan's prolonged contraction continues Japan’s PMI came in at 49.4 in May, marking the 11th consecutive month of contraction, according to Reuters. Though the downturn is less severe than in neighbouring economies, it points to long-term structural weakness in Japanese manufacturing, driven by sluggish exports and high input costs. Philippines' growth momentum slows The Philippines once a regional outlier is now also showing signs of slowing. Factory activity continued to expand in May, but at a much slower pace, as regional headwinds spread, Bloomberg reported. Businesses are reportedly becoming more cautious as demand from major export markets softens. US-China's fresh trade flare-up threatens fragile truce In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns. Beijing hit back with retaliatory duties of up to 125 per cent. While both sides briefly agreed to scale back some tariffs during talks in Geneva last month, relations have soured again. The US recently imposed new export restrictions on chip design software and AI technologies and revoked visas for Chinese students. It also banned exports of jet engine parts to China. According to Bloomberg, the US Trade Representative accused China of failing to uphold the Geneva agreement by not accelerating exports of critical minerals. Beijing, in turn, called the moves a “serious violation” of the truce. China’s Ministry of Commerce said it would take “resolute and forceful measures” if Washington continued to escalate, rejecting the US claims as “unjustified.”

US President Donald Trump's tariff tension has disrupted global trade and put pressure on Asia's manufacturing sector.&nbsp;

Trump’s tariffs hit Asia’s factories, trigger region-wide slowdown: Details here

Tensions between the United States and China have escalated once again as Beijing accuses Washington of breaching a recent trade agreement.&nbsp;The Chinese Ministry of Commerce issued a statement condemning the US’s actions, signalling a potential setback in ongoing efforts to stabilise bilateral trade relations.<h2>China’s accusation</h2>According to a report by Bloomberg, China has accused the United States of “seriously violating” the trade truce established in Geneva in May 2025.&nbsp;The Chinese Ministry of Commerce criticised the US for introducing new trade and technology restrictions, including export controls on artificial intelligence (AI) chips, curbs on chip design software sales to China, and the revocation of Chinese student visas. &nbsp;Beijing said these actions undermined the consensus reached between President Donald Trump and President Xi Jinping during their last conversation in January. &nbsp;“If the US insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry stated, as quoted by Bloomberg.&nbsp;The ministry further stated it “resolutely rejects these unjustified accusations” and insisted that China has strictly implemented the Geneva consensus.<h2>China-US trade truce under pressure</h2>The US-China trade relationship has remained turbulent in recent years. In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns. &nbsp;China responded with retaliatory tariffs of up to 125 per cent on US goods. &nbsp;A temporary easing of tensions came in May, when both countries agreed to scale back certain tariffs during talks in Geneva.&nbsp;However, Washington’s latest actions—including export bans, software curbs, and visa restrictions—have sparked renewed conflict.&nbsp;Last week, the Trump administration said it planned to start revoking visas for Chinese students, while moving to restrict sales of chip design software to China.&nbsp;According to the New York Times, the US has also barred exports of critical jet engine parts and aviation technology to China.&nbsp;Although Trump did not provide specifics when accusing Beijing of violating the trade truce on Friday, US Trade Representative Jamieson Greer said China had failed to accelerate exports of critical minerals used in advanced electronics, as per Bloomberg . &nbsp;According to Bloomberg, the US Treasury Secretary Scott Bessent confirmed that trade talks had stalled and hinted that a direct call between Trump and Xi might be necessary to break the deadlock.&nbsp;Trump has recently reportedly voiced dissatisfaction with Beijing’s pace in fulfilling agreed commitments, particularly in boosting exports of critical minerals essential to the US tech and defence sectors.<h2>Impact on the Chinese Economy</h2>The ongoing trade tensions have had a tangible impact on China’s economy.&nbsp;&nbsp;Despite setting an ambitious GDP growth target of around 5% for 2025, analysts reportedly remain skeptical about China’s ability to achieve this goal amid external pressures.&nbsp; &nbsp;The International Monetary Fund (IMF) projects China’s economy will grow by 4.6% in 2025, down from 5% in 2024.&nbsp;Furthermore, China’s fiscal deficit target for 2025 has been set at approximately 4% of GDP, the highest level in over three decades, indicating increased public spending to support growth, according to Reuters.&nbsp;The Economist Intelligence Unit anticipates a 20% reduction in China’s exports to the U.S. over 2025-27, with the majority of the impact being felt in 2026.&nbsp;&nbsp;This contraction is expected to reduce GDP growth by 0.6 percentage points over the same period.<h2>What lies ahead?</h2>As both countries harden their trade stances, the path forward remains uncertain.&nbsp;The risk of further escalation is real, but diplomatic backchannels could still pave the way for renewed dialogue between Trump and Xi.&nbsp;With global markets, supply chains, and developing economies exposed to fallout from any US-China fallout, the world is closely watching how the next chapter of this economic standoff unfolds.&nbsp;

Citing a possible setback in the stabilization of bilateral economic relations, the Chinese Ministry of Commerce denounced the US actions. 

Tensions between the United States and China have escalated once again as Beijing accuses Washington of breaching a recent trade agreement. The Chinese Ministry of Commerce issued a statement condemning the US’s actions, signalling a potential setback in ongoing efforts to stabilise bilateral trade relations. China’s accusation According to a report by Bloomberg, China has accused the United States of “seriously violating” the trade truce established in Geneva in May 2025. The Chinese Ministry of Commerce criticised the US for introducing new trade and technology restrictions, including export controls on artificial intelligence (AI) chips, curbs on chip design software sales to China, and the revocation of Chinese student visas. Beijing said these actions undermined the consensus reached between President Donald Trump and President Xi Jinping during their last conversation in January. “If the US insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry stated, as quoted by Bloomberg. The ministry further stated it “resolutely rejects these unjustified accusations” and insisted that China has strictly implemented the Geneva consensus. China-US trade truce under pressure The US-China trade relationship has remained turbulent in recent years. In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns. China responded with retaliatory tariffs of up to 125 per cent on US goods. A temporary easing of tensions came in May, when both countries agreed to scale back certain tariffs during talks in Geneva. However, Washington’s latest actions—including export bans, software curbs, and visa restrictions—have sparked renewed conflict. Last week, the Trump administration said it planned to start revoking visas for Chinese students, while moving to restrict sales of chip design software to China. According to the New York Times, the US has also barred exports of critical jet engine parts and aviation technology to China. Although Trump did not provide specifics when accusing Beijing of violating the trade truce on Friday, US Trade Representative Jamieson Greer said China had failed to accelerate exports of critical minerals used in advanced electronics, as per Bloomberg . According to Bloomberg, the US Treasury Secretary Scott Bessent confirmed that trade talks had stalled and hinted that a direct call between Trump and Xi might be necessary to break the deadlock. Trump has recently reportedly voiced dissatisfaction with Beijing’s pace in fulfilling agreed commitments, particularly in boosting exports of critical minerals essential to the US tech and defence sectors. Impact on the Chinese Economy The ongoing trade tensions have had a tangible impact on China’s economy. Despite setting an ambitious GDP growth target of around 5% for 2025, analysts reportedly remain skeptical about China’s ability to achieve this goal amid external pressures. The International Monetary Fund (IMF) projects China’s economy will grow by 4.6% in 2025, down from 5% in 2024. Furthermore, China’s fiscal deficit target for 2025 has been set at approximately 4% of GDP, the highest level in over three decades, indicating increased public spending to support growth, according to Reuters. The Economist Intelligence Unit anticipates a 20% reduction in China’s exports to the U.S. over 2025-27, with the majority of the impact being felt in 2026. This contraction is expected to reduce GDP growth by 0.6 percentage points over the same period. What lies ahead? As both countries harden their trade stances, the path forward remains uncertain. The risk of further escalation is real, but diplomatic backchannels could still pave the way for renewed dialogue between Trump and Xi. With global markets, supply chains, and developing economies exposed to fallout from any US-China fallout, the world is closely watching how the next chapter of this economic standoff unfolds.

As Beijing accuses Washington of breaking a trade agreement, tensions between the US and China have increased.&nbsp;

US-China trade tensions flare as Beijing accuses Washington of breaching deal

Stanley Fischer, the quietly powerful figure who influenced modern macroeconomics across academia, global financial institutions, and central banks, passed away on Saturday at the age of 81.&nbsp;&nbsp;His death was confirmed by the Bank of Israel, according to Bloomberg, marking the end of an era in economic thought and crisis management.&nbsp;Fischer’s life was one of service to stability, whether as an academic at MIT, a crisis manager at the International Monetary Fund, or a central banker guiding Israel and the US through turbulent financial waters. The Financial Times&nbsp;once called him “the pocket-sized colossus of modern central banking.”<h2>From Africa to the world stage</h2>Born on 15 October 1943 in Mazabuka, Northern Rhodesia now Zambia, Fischer was raised in a Jewish family within southern Africa’s immigrant communities. As a teenager, he moved to Southern Rhodesia (now Zimbabwe), where he joined the Habonim Zionist youth movement and met his future wife, Rhoda Keet, as reported by The Times of Israel.&nbsp;He pursued economics at the London School of Economics, completing both his bachelor’s and master’s degrees by 1966.&nbsp; &nbsp;Fischer later moved to the United States to earn a PhD from the Massachusetts Institute of Technology (MIT), graduating in 1969 under the supervision of Nobel laureates Paul Samuelson and Robert Solow, according to Bloomberg.<h2>The teacher of titans</h2>Fischer began teaching at MIT in the 1970s and went on to shape a generation of economic policymakers who would lead the world’s most powerful institutions.&nbsp; &nbsp;Among his students were Ben Bernanke, former Chair of the US Federal Reserve; Mario Draghi, former President of the European Central Bank and later Prime Minister of Italy; Lawrence Summers, former US Treasury Secretary; Kazuo Ueda, the current Governor of the Bank of Japan; Greg Mankiw, who advised US President George W. Bush; and IMF chief economists Olivier Blanchard and Maurice Obstfeld, according to Bloomberg.&nbsp;Blanchard later remarked, “It is hard to think of any other macroeconomist alive who has had as much direct and indirect influence… on macroeconomic policy around the world,” Bloomberg reported.&nbsp;In 1978, Fischer co-authored the foundational textbook Macroeconomics&nbsp;with Rudi Dornbusch. The book educated generations of students and was still being updated decades later its 13th edition was released in 2018, according to Bloomberg.<h2>The global crisis whisperer</h2>Fischer was not just a teacher; he was a crisis whisperer for nations on the brink. From 1994 to 2001, he served as First Deputy Managing Director at the International Monetary Fund. During that period, he led responses to some of the most severe financial meltdowns in modern history, including the crises in Mexico, South Korea, Thailand, Indonesia, Russia, and Brazil.&nbsp; &nbsp;According to Bloomberg, he oversaw nearly 250 billion US dollars in emergency lending and became the face of the IMF’s crisis management during those turbulent years. &nbsp;Long before that, in 1985, Fischer helped design an economic stabilisation programme for Israel at a time when the country was struggling with hyperinflation. The plan, backed by 1.5 billion US dollars in American aid, helped pull the economy back from the brink.&nbsp; &nbsp;According to The Times of Israel, that experience solidified Fischer’s reputation as someone who could bridge theory and real-world application.&nbsp;Later, he moved to the private sector, serving as vice chairman at Citigroup. There, he chaired the bank’s country risk committee and advised its global strategy, as reported by Bloomberg.<h2>Israel’s central banker in crisis</h2>In 2005, Fischer accepted the role of Governor of the Bank of Israel and became an Israeli citizen. According to Bloomberg, he conducted meetings in fluent Hebrew and helped modernise the central bank’s structure and policy approach.&nbsp;His leadership during the 2008 global financial crisis drew global praise. The Bank of Israel was among the first central banks to cut interest rates at the onset of the crisis and among the first to raise them during the recovery.&nbsp; &nbsp;Fischer established a new Monetary Policy Committee, shifting authority from a single governor to a more collaborative six-member board that included external academic voices. Under his leadership, Israel’s economy grew every year during the global crisis, defying recessionary trends.<h2>From Jerusalem to Washington</h2>In 2014, Fischer was nominated by US President Barack Obama to serve as Vice Chair of the Federal Reserve under Janet Yellen.&nbsp;&nbsp;Although frequently mentioned as a possible candidate to head the Fed or the IMF, Fischer never reached those top roles, largely due to timing and age-related factors, according to Bloomberg.&nbsp;He retired from the Fed in 2017 and later became a senior adviser at BlackRock, the world’s largest asset manager.&nbsp;Reflecting on Fischer’s legacy, Lawrence Summers told Bloomberg, “In a just world, Stan would have served as Fed chairman or IMF managing director. But fate is fickle. And yet, his influence through teaching, writing, advising and leading touched hundreds of millions of lives.”&nbsp;Fischer’s wife, Rhoda, his partner since their teenage days in a Zionist youth group, passed away in 2020. He is survived by three children, and by a global network of students, colleagues, and admirers who carry forward his intellectual legacy.&nbsp;He once said that macroeconomics attracted him because it dealt with “big questions.” Through every classroom, crisis, and central bank, Stanley Fischer spent a lifetime answering those big questions with clarity, humility, and an unwavering sense of purpose.

Fischer was a crisis whisperer for nations on the brink, serving as First Deputy Managing Director at the International Monetary Fund from 1994 to 2001. 

Stanley Fischer, the quietly powerful figure who influenced modern macroeconomics across academia, global financial institutions, and central banks, passed away on Saturday at the age of 81. His death was confirmed by the Bank of Israel, according to Bloomberg, marking the end of an era in economic thought and crisis management. Fischer’s life was one of service to stability, whether as an academic at MIT, a crisis manager at the International Monetary Fund, or a central banker guiding Israel and the US through turbulent financial waters. The Financial Times once called him “the pocket-sized colossus of modern central banking.” From Africa to the world stage Born on 15 October 1943 in Mazabuka, Northern Rhodesia now Zambia, Fischer was raised in a Jewish family within southern Africa’s immigrant communities. As a teenager, he moved to Southern Rhodesia (now Zimbabwe), where he joined the Habonim Zionist youth movement and met his future wife, Rhoda Keet, as reported by The Times of Israel. He pursued economics at the London School of Economics, completing both his bachelor’s and master’s degrees by 1966. Fischer later moved to the United States to earn a PhD from the Massachusetts Institute of Technology (MIT), graduating in 1969 under the supervision of Nobel laureates Paul Samuelson and Robert Solow, according to Bloomberg. The teacher of titans Fischer began teaching at MIT in the 1970s and went on to shape a generation of economic policymakers who would lead the world’s most powerful institutions. Among his students were Ben Bernanke, former Chair of the US Federal Reserve; Mario Draghi, former President of the European Central Bank and later Prime Minister of Italy; Lawrence Summers, former US Treasury Secretary; Kazuo Ueda, the current Governor of the Bank of Japan; Greg Mankiw, who advised US President George W. Bush; and IMF chief economists Olivier Blanchard and Maurice Obstfeld, according to Bloomberg. Blanchard later remarked, “It is hard to think of any other macroeconomist alive who has had as much direct and indirect influence… on macroeconomic policy around the world,” Bloomberg reported. In 1978, Fischer co-authored the foundational textbook Macroeconomics with Rudi Dornbusch. The book educated generations of students and was still being updated decades later its 13th edition was released in 2018, according to Bloomberg. The global crisis whisperer Fischer was not just a teacher; he was a crisis whisperer for nations on the brink. From 1994 to 2001, he served as First Deputy Managing Director at the International Monetary Fund. During that period, he led responses to some of the most severe financial meltdowns in modern history, including the crises in Mexico, South Korea, Thailand, Indonesia, Russia, and Brazil. According to Bloomberg, he oversaw nearly 250 billion US dollars in emergency lending and became the face of the IMF’s crisis management during those turbulent years. Long before that, in 1985, Fischer helped design an economic stabilisation programme for Israel at a time when the country was struggling with hyperinflation. The plan, backed by 1.5 billion US dollars in American aid, helped pull the economy back from the brink. According to The Times of Israel, that experience solidified Fischer’s reputation as someone who could bridge theory and real-world application. Later, he moved to the private sector, serving as vice chairman at Citigroup. There, he chaired the bank’s country risk committee and advised its global strategy, as reported by Bloomberg. Israel’s central banker in crisis In 2005, Fischer accepted the role of Governor of the Bank of Israel and became an Israeli citizen. According to Bloomberg, he conducted meetings in fluent Hebrew and helped modernise the central bank’s structure and policy approach. His leadership during the 2008 global financial crisis drew global praise. The Bank of Israel was among the first central banks to cut interest rates at the onset of the crisis and among the first to raise them during the recovery. Fischer established a new Monetary Policy Committee, shifting authority from a single governor to a more collaborative six-member board that included external academic voices. Under his leadership, Israel’s economy grew every year during the global crisis, defying recessionary trends. From Jerusalem to Washington In 2014, Fischer was nominated by US President Barack Obama to serve as Vice Chair of the Federal Reserve under Janet Yellen. Although frequently mentioned as a possible candidate to head the Fed or the IMF, Fischer never reached those top roles, largely due to timing and age-related factors, according to Bloomberg. He retired from the Fed in 2017 and later became a senior adviser at BlackRock, the world’s largest asset manager. Reflecting on Fischer’s legacy, Lawrence Summers told Bloomberg, “In a just world, Stan would have served as Fed chairman or IMF managing director. But fate is fickle. And yet, his influence through teaching, writing, advising and leading touched hundreds of millions of lives.” Fischer’s wife, Rhoda, his partner since their teenage days in a Zionist youth group, passed away in 2020. He is survived by three children, and by a global network of students, colleagues, and admirers who carry forward his intellectual legacy. He once said that macroeconomics attracted him because it dealt with “big questions.” Through every classroom, crisis, and central bank, Stanley Fischer spent a lifetime answering those big questions with clarity, humility, and an unwavering sense of purpose.

Stanley Fischer, a prominent figure in modern macroeconomics, passed away at the age of 81.&nbsp;

Stanley Fischer: Architect of modern macroeconomics dies at 81

Consumers in India’s aviation and hospitality sectors received much-needed relief on Sunday as jet fuel and commercial LPG prices were cut for the third consecutive month.&nbsp;&nbsp;The revision reportedly comes amid a persistent decline in global crude benchmarks, signalling broader shifts in the international oil economy and easing cost pressures for fuel-reliant industries. &nbsp;According to a PTI-cited report, aviation turbine fuel (ATF) prices in India were slashed by 2.82 per cent, or ₹2,414.25 per kilolitre (~$28.90), bringing the price in Delhi down to ₹83,072.55 per kl (~$995).&nbsp;&nbsp;Similarly, the price of commercial LPG, used extensively in hotels and restaurants, was reduced by ₹24 per 19-kg cylinder (~$0.29), with revised prices now at ₹1,723.50 in Delhi (~$20.63) and ₹1,647.50 in Mumbai (~$19.72).<h2>What it means for flyers, food businesses, and fuel consumers in India</h2>This downward revision is expected to reduce operational costs for Indian airlines, where fuel makes up nearly 40 per cent of total expenditure.&nbsp; &nbsp;With travel peaking during the summer holiday season, this move could improve margins for airlines or potentially lead to lower fares, though no official comment has been issued by carriers so far. &nbsp;In the hospitality and food services sector, the cut in commercial LPG prices will bring some cost relief to restaurants, cafés, and catering units across India that continue to battle inflationary pressures and volatile demand cycles.&nbsp;According to PTI, the ATF price cuts in April (6.15 per cent), May (4.4 per cent) and now June (2.82 per cent) have collectively rolled back most of the fuel price hikes from early 2024, marking a welcome breather for the aviation sector.<h2>Global Trade tension weighs on oil demand outlook</h2>While Indian consumers are seeing local benefits, the root of these price cuts lies in a softening of global crude oil benchmarks, which have dipped due to a dampened demand outlook.&nbsp;&nbsp;As PTI notes, “international oil prices have softened in the last couple of months as the global trade war eroded the outlook for fuel demand.”&nbsp;Escalating trade tensions between major economies, especially China and the US along with ongoing geopolitical uncertainties have pushed down global oil prices, allowing oil-importing countries like India to pass on the benefits.<h2>Retail fuel prices remain unchanged for Indian households</h2>Despite these cuts, domestic LPG prices in India remain unchanged, holding at ₹853 per 14.2-kg cylinder (~$10.21). In fact, April saw a ₹50 hike (~$0.60) in household LPG rates, a cost still being borne by Indian households.&nbsp;Meanwhile, petrol and diesel prices have been frozen since a ₹2 per litre cut (~$0.024) in March 2024, ahead of the general elections.&nbsp; &nbsp;Petrol continues to retail at ₹94.72 per litre (~$1.13) in Delhi, while diesel is priced at ₹87.62 (~$1.05). &nbsp;State-run fuel retailers, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), adjust prices of ATF and LPG on the first of every month, based on global fuel averages and currency exchange rate, as per PTI.&nbsp; &nbsp;Prices still vary from state to state depending on local VAT and taxes. &nbsp;The three consecutive cuts in jet fuel and LPG prices signal temporary relief, but analysts warn of continued volatility in the global oil markets.&nbsp; &nbsp;With Trump’s aggressive tariff policies, demand stagnation in China, and geopolitical tensions in West Asia, the outlook for stable oil prices remains uncertain. &nbsp;Nonetheless, Indian businesses, especially those in aviation, logistics, and hospitality are seeing tangible gains from the ongoing softness in global energy markets.&nbsp;&nbsp;Whether this turns into sustained consumer relief or merely a temporary dip before another rally will depend on global policy moves and geopolitical shifts in the months ahead.&nbsp;

The cut coincides with lessening cost constraints on industries that depend on gasoline and more significant changes in the global oil industry.

Consumers in India’s aviation and hospitality sectors received much-needed relief on Sunday as jet fuel and commercial LPG prices were cut for the third consecutive month. The revision reportedly comes amid a persistent decline in global crude benchmarks, signalling broader shifts in the international oil economy and easing cost pressures for fuel-reliant industries. According to a PTI-cited report, aviation turbine fuel (ATF) prices in India were slashed by 2.82 per cent, or ₹2,414.25 per kilolitre (~$28.90), bringing the price in Delhi down to ₹83,072.55 per kl (~$995). Similarly, the price of commercial LPG, used extensively in hotels and restaurants, was reduced by ₹24 per 19-kg cylinder (~$0.29), with revised prices now at ₹1,723.50 in Delhi (~$20.63) and ₹1,647.50 in Mumbai (~$19.72). What it means for flyers, food businesses, and fuel consumers in India This downward revision is expected to reduce operational costs for Indian airlines, where fuel makes up nearly 40 per cent of total expenditure. With travel peaking during the summer holiday season, this move could improve margins for airlines or potentially lead to lower fares, though no official comment has been issued by carriers so far. In the hospitality and food services sector, the cut in commercial LPG prices will bring some cost relief to restaurants, cafés, and catering units across India that continue to battle inflationary pressures and volatile demand cycles. According to PTI, the ATF price cuts in April (6.15 per cent), May (4.4 per cent) and now June (2.82 per cent) have collectively rolled back most of the fuel price hikes from early 2024, marking a welcome breather for the aviation sector. Global Trade tension weighs on oil demand outlook While Indian consumers are seeing local benefits, the root of these price cuts lies in a softening of global crude oil benchmarks, which have dipped due to a dampened demand outlook. As PTI notes, “international oil prices have softened in the last couple of months as the global trade war eroded the outlook for fuel demand.” Escalating trade tensions between major economies, especially China and the US along with ongoing geopolitical uncertainties have pushed down global oil prices, allowing oil-importing countries like India to pass on the benefits. Retail fuel prices remain unchanged for Indian households Despite these cuts, domestic LPG prices in India remain unchanged, holding at ₹853 per 14.2-kg cylinder (~$10.21). In fact, April saw a ₹50 hike (~$0.60) in household LPG rates, a cost still being borne by Indian households. Meanwhile, petrol and diesel prices have been frozen since a ₹2 per litre cut (~$0.024) in March 2024, ahead of the general elections. Petrol continues to retail at ₹94.72 per litre (~$1.13) in Delhi, while diesel is priced at ₹87.62 (~$1.05). State-run fuel retailers, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), adjust prices of ATF and LPG on the first of every month, based on global fuel averages and currency exchange rate, as per PTI. Prices still vary from state to state depending on local VAT and taxes. The three consecutive cuts in jet fuel and LPG prices signal temporary relief, but analysts warn of continued volatility in the global oil markets. With Trump’s aggressive tariff policies, demand stagnation in China, and geopolitical tensions in West Asia, the outlook for stable oil prices remains uncertain. Nonetheless, Indian businesses, especially those in aviation, logistics, and hospitality are seeing tangible gains from the ongoing softness in global energy markets. Whether this turns into sustained consumer relief or merely a temporary dip before another rally will depend on global policy moves and geopolitical shifts in the months ahead.

Following a drop in global crude benchmarks, jet fuel and commercial LPG costs in India's aviation and hospitality industries fell 3.2% for the third consecutive month.&nbsp;

Jet fuel and LPG prices in India slashed as global oil tension continues to rise

South Korea’s exports declined in May for the first time in four months, signalling early damage from escalating trade tensions driven by US President Donald Trump’s aggressive tariff agenda.&nbsp;&nbsp;The slowdown in shipments to both the United States and China, South Korea’s two largest trading partners reflects the widening ripple effects of the ongoing global trade conflict. &nbsp;According to Reuters, exports from Asia’s fourth-largest economy fell 1.3 per cent year-on-year in May to $57.27 billion, with trade officials warning that ongoing tariff disputes are disrupting demand for key South Korean goods.&nbsp;&nbsp;The latest decline, though smaller than the 2.7 per cent drop forecast in a Reuters poll, marks the first contraction since January.<h2>What does the data say&nbsp;</h2>According to data released by South Korea’s Ministry of Trade, Industry and Energy on Sunday showed that exports to the United States dropped 8.1 per cent, while shipments to China fell 8.4 per cent.&nbsp;&nbsp;These two nations collectively account for more than 35 per cent of South Korea’s total exports, underscoring the deep exposure of its economy to external demand from both Washington and Beijing, as per Reuters.&nbsp;&nbsp;According to Reuters, despite the broader decline, semiconductor exports reportedly surged 21.2 per cent, buoyed by resilient demand for advanced memory chips.&nbsp;&nbsp;However, car exports fell 4.4 per cent, partly due to tariffs imposed by the US and transitional delays at Hyundai Motor’s new factory in Georgia, according to the trade ministry, reported by Reuters.&nbsp; On the other hand, exports to the European Union rose 4 per cent, and shipments to Taiwan soared 49.6 per cent, offsetting some of the drag from the US and China. Meanwhile, imports dropped 5.3 per cent to $50.33 billion, resulting in a trade surplus of $6.94 billion, the largest since June 2024.&nbsp;“Declines in exports to both the United States and China, the two biggest markets, suggest US tariff measures are having an impact on the global economy as well as our exports,” said South Korean Industry and Trade Minister Ahn Duk-geun, as quoted by Reuters.<h2>US-South Korea trade ties hit turbulence</h2>South Korea’s reliance on US trade has become more vulnerable under Trump’s “America First” trade doctrine. Since early 2025, the US administration has imposed reciprocal tariffs, including 25 per cent duties on South Korean steel and aluminium, though they are currently under a 90-day negotiation pause.&nbsp;&nbsp;Trump recently threatened to double global tariffs on these metals to 50 per cent, sparking renewed concerns in Seoul.&nbsp;According to Reuters, the recent US-China trade truce in mid-May had offered some hope of easing pressure. But President Trump’s accusation that China had violated the agreement has thrown the ceasefire into question.&nbsp;&nbsp;The re-escalation threatens to deepen export volatility for South Korea, whose tech-driven economy depends heavily on trade flows across the Pacific.&nbsp;South Korea is often viewed as a bellwether for global trade, given its strong manufacturing and export-oriented base.&nbsp;&nbsp;With US tariffs biting into car and industrial shipments, South Korea faces a dual challenge balancing geopolitical ties with Washington while defending its economic interests.

South Korea two biggest trading partners, the US and China, saw a 1.3% YoY decline in exports to $57.27 billion.

South Korea’s exports declined in May for the first time in four months, signalling early damage from escalating trade tensions driven by US President Donald Trump’s aggressive tariff agenda. The slowdown in shipments to both the United States and China, South Korea’s two largest trading partners reflects the widening ripple effects of the ongoing global trade conflict. According to Reuters, exports from Asia’s fourth-largest economy fell 1.3 per cent year-on-year in May to $57.27 billion, with trade officials warning that ongoing tariff disputes are disrupting demand for key South Korean goods. The latest decline, though smaller than the 2.7 per cent drop forecast in a Reuters poll, marks the first contraction since January. What does the data say According to data released by South Korea’s Ministry of Trade, Industry and Energy on Sunday showed that exports to the United States dropped 8.1 per cent, while shipments to China fell 8.4 per cent. These two nations collectively account for more than 35 per cent of South Korea’s total exports, underscoring the deep exposure of its economy to external demand from both Washington and Beijing, as per Reuters. According to Reuters, despite the broader decline, semiconductor exports reportedly surged 21.2 per cent, buoyed by resilient demand for advanced memory chips. However, car exports fell 4.4 per cent, partly due to tariffs imposed by the US and transitional delays at Hyundai Motor’s new factory in Georgia, according to the trade ministry, reported by Reuters. On the other hand, exports to the European Union rose 4 per cent, and shipments to Taiwan soared 49.6 per cent, offsetting some of the drag from the US and China. Meanwhile, imports dropped 5.3 per cent to $50.33 billion, resulting in a trade surplus of $6.94 billion, the largest since June 2024. “Declines in exports to both the United States and China, the two biggest markets, suggest US tariff measures are having an impact on the global economy as well as our exports,” said South Korean Industry and Trade Minister Ahn Duk-geun, as quoted by Reuters. US-South Korea trade ties hit turbulence South Korea’s reliance on US trade has become more vulnerable under Trump’s “America First” trade doctrine. Since early 2025, the US administration has imposed reciprocal tariffs, including 25 per cent duties on South Korean steel and aluminium, though they are currently under a 90-day negotiation pause. Trump recently threatened to double global tariffs on these metals to 50 per cent, sparking renewed concerns in Seoul. According to Reuters, the recent US-China trade truce in mid-May had offered some hope of easing pressure. But President Trump’s accusation that China had violated the agreement has thrown the ceasefire into question. The re-escalation threatens to deepen export volatility for South Korea, whose tech-driven economy depends heavily on trade flows across the Pacific. South Korea is often viewed as a bellwether for global trade, given its strong manufacturing and export-oriented base. With US tariffs biting into car and industrial shipments, South Korea faces a dual challenge balancing geopolitical ties with Washington while defending its economic interests.

For the first time in four months, South Korea's exports declined in May, a sign of the harm caused by rising trade tensions brought on by US President Donald Trump's aggressive tariff policy.&nbsp;

South Korea’s exports dip as Trump tariffs squeeze trade with US and China

The pace of job creation in the US is cooling, as shifting trade policies, rising business costs and a sharp drop in corporate profits weigh on labour market momentum, according to Bloomberg reports.&nbsp;Employers added an estimated 125,000 jobs in May, a decline from the average 162,000 payroll additions over the past three months, as per a Bloomberg median forecast. The unemployment rate is expected to hold at 4.2 per cent, reflecting a stable but softening labour environment.&nbsp;“Our preliminary forecast range for May nonfarm payrolls is 60,000–130,000, with the central tendency clustering around 90,000 – lower than the consensus of 130,000,” Bloomberg economists Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins wrote in a note.&nbsp;They added that the weakness is likely concentrated in the leisure and hospitality sector, due to reduced international tourism and government travel.<h2>Corporate profits slump as businesses face tariff squeeze</h2>According to the US Commerce Department, corporate profits fell by 118.1 billion dollars in the first quarter of 2025 – the steepest decline since the onset of the pandemic in 2020. As per Reuters, this profit contraction is being largely blamed on higher input costs, driven by President Donald Trump’s escalating trade tariffs.&nbsp;On 30 May, Trump announced plans to double steel and aluminium tariffs to 50 per cent from the existing 25 per cent, in a bid to pressure global producers and reduce the trade deficit. The move has sparked backlash from the European Commission, which called it a violation of fair trade and warned of countermeasures.&nbsp;“Employers seeking clarity around the White House’s trade policy have instead been greeted with frequent adjustments to timelines and import duty schedules,” Bloomberg noted, adding that this has left businesses hesitant to commit to fresh investments.<h2>Labour data reveals rising unemployment claims</h2>As businesses tighten costs amid profit pressures, signs of softening labour demand are becoming more visible. Initial jobless claims rose by 14,000 to 240,000 for the week ending 24 May, higher than expected, while continuing claims climbed to 1.92 million, the highest since November 2021, according to Reuters.<h2>Fed likely to hold policy amid mixed signals</h2>The Federal Reserve has kept rates steady at 4.25–4.50 per cent since December 2024, as officials await more consistent economic signals. Fed Chair Jerome Powell has emphasised that the central bank will take a “data-dependent approach,” noting risks on both inflation and employment fronts.&nbsp;“Federal Reserve officials are likely to take the labour market reports in stride as they too await clarity on how trade and tax policy will impact the economy and inflation,” Bloomberg reported.&nbsp;Investors will watch closely for comments this week from Fed Governors Lisa Cook, Adriana Kugler, and Christopher Waller, as well as the release of the Fed’s Beige Book on anecdotal economic conditions across districts.<h2>Trade-driven GDP drag</h2>The economic slowdown is further evidenced by revised GDP figures. As per the Commerce Department, US GDP contracted by 0.2 per cent in the first quarter, slightly better than the earlier -0.3 per cent estimate.&nbsp;&nbsp;The contraction reflects a 42.6 per cent spike in imports, as companies rushed purchases ahead of expected tariffs. However, inventories and consumer spending failed to keep pace, leading to a net drag on growth.&nbsp;“Concerned that revenue will suffer, companies are growing more conscious about cost-saving efforts that risk culminating in slower labour demand,” Bloomberg observed.

Compared to the average of 162,000 jobs created over the previous three months, employers added an estimated 125,000 jobs in May. 

The pace of job creation in the US is cooling, as shifting trade policies, rising business costs and a sharp drop in corporate profits weigh on labour market momentum, according to Bloomberg reports. Employers added an estimated 125,000 jobs in May, a decline from the average 162,000 payroll additions over the past three months, as per a Bloomberg median forecast. The unemployment rate is expected to hold at 4.2 per cent, reflecting a stable but softening labour environment. “Our preliminary forecast range for May nonfarm payrolls is 60,000–130,000, with the central tendency clustering around 90,000 – lower than the consensus of 130,000,” Bloomberg economists Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou and Chris G. Collins wrote in a note. They added that the weakness is likely concentrated in the leisure and hospitality sector, due to reduced international tourism and government travel. Corporate profits slump as businesses face tariff squeeze According to the US Commerce Department, corporate profits fell by 118.1 billion dollars in the first quarter of 2025 – the steepest decline since the onset of the pandemic in 2020. As per Reuters, this profit contraction is being largely blamed on higher input costs, driven by President Donald Trump’s escalating trade tariffs. On 30 May, Trump announced plans to double steel and aluminium tariffs to 50 per cent from the existing 25 per cent, in a bid to pressure global producers and reduce the trade deficit. The move has sparked backlash from the European Commission, which called it a violation of fair trade and warned of countermeasures. “Employers seeking clarity around the White House’s trade policy have instead been greeted with frequent adjustments to timelines and import duty schedules,” Bloomberg noted, adding that this has left businesses hesitant to commit to fresh investments. Labour data reveals rising unemployment claims As businesses tighten costs amid profit pressures, signs of softening labour demand are becoming more visible. Initial jobless claims rose by 14,000 to 240,000 for the week ending 24 May, higher than expected, while continuing claims climbed to 1.92 million, the highest since November 2021, according to Reuters. Fed likely to hold policy amid mixed signals The Federal Reserve has kept rates steady at 4.25–4.50 per cent since December 2024, as officials await more consistent economic signals. Fed Chair Jerome Powell has emphasised that the central bank will take a “data-dependent approach,” noting risks on both inflation and employment fronts. “Federal Reserve officials are likely to take the labour market reports in stride as they too await clarity on how trade and tax policy will impact the economy and inflation,” Bloomberg reported. Investors will watch closely for comments this week from Fed Governors Lisa Cook, Adriana Kugler, and Christopher Waller, as well as the release of the Fed’s Beige Book on anecdotal economic conditions across districts. Trade-driven GDP drag The economic slowdown is further evidenced by revised GDP figures. As per the Commerce Department, US GDP contracted by 0.2 per cent in the first quarter, slightly better than the earlier -0.3 per cent estimate. The contraction reflects a 42.6 per cent spike in imports, as companies rushed purchases ahead of expected tariffs. However, inventories and consumer spending failed to keep pace, leading to a net drag on growth. “Concerned that revenue will suffer, companies are growing more conscious about cost-saving efforts that risk culminating in slower labour demand,” Bloomberg observed.

A decline in corporate profits, increased business expenses, and changing trade policy are all contributing to the cooling of the US labor market.&nbsp;

US job growth slows amid profit slump and Trump tariff uncertainty