Trade talks between India and the European Union have entered a decisive stage. With bilateral trade already at $137 billion, negotiators are racing against a year-end deadline to seal a free trade pact that could reshape economic ties. But the talks are complicated by high tariffs, agricultural sensitivities, and US pressure over Russian oil.


EU builds India ties amid Trump’s trade offensive

US President Donald Trump’s nominee for the next ambassador to India, Sergio Gor, said on Thursday that the Trump administration wants India, with its massive middle-class market larger than that of the US, to buy American crude and oil products, adding that the ongoing trade talks are aimed in that direction.


India-US trade deal: Trump's South Asia envoy says deal could be done in weeks 

Indian markets this week are buoyed by renewed optimism surrounding India-US Trade talks. This has led to a multi-day rally. This upward momentum followed a period of uncertainty that saw the nifty drop after the US imposed a 50% tariff on Indian goods.



Indian Markets Rally on Trade Deal Hopes With the US | WION

Trade tensions between the United States and China are weighing on business sentiment. According to the American Chamber of Commerce in Shanghai, only 41 percent of American firms are optimistic about their five-year business outlook. This marks the lowest point since survey began in 1999. Geopolitical tensions remain the biggest hurdle, with 66 percent of firms citing US-China relations as their top challenge.


China loses appeal as investment destination

Responding to a post by President of the US on X, PM Modi said: “India and the US are close friends and natural partners. I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership. Our teams are working to conclude these discussions at the earliest.


Breaking: PM Modi replies to Trump's post on trade talks between India & US 

Trump Tariffs: Who is Paying the Price of US Tariffs? | WION Business Watch

As the global economy navigates through US tariffs, the debate over who bears the brunt of tariffs in the US is heating up. Treasury secretary Scott Bessent, has downplayed the impact of tariffs on American consumers and businesses. He argues that the broader economy remains strong. He pointed at record stock market highs as evidence that tariffs are not derailing the economy. However, research reports from financial institutions tell a different story.



Trump Tariffs: Who is Paying the Price of US Tariffs? | WION

“There is no need to panic,” Goyal said in an interview with ANI on Thursday. “We continue to have good relations with the United States, and I am sure we will be able to resolve some of these issues and come to an equitable, balanced and fair agreement.”



Trump Trade War: Piyush Goyal Optimistic on US Trade Deal, Says "No Need To Panic" | WION

President Donald Trump has warned that the United States may have to unwind its trade deals with the European Union, Japan, and South Korea if the Supreme Court rules against his tariffs. Speaking at the white house, trump said the agreements were worth almost a trillion dollars to the u.S. Economy and claimed that losing the case would cause the country to “suffer greatly.”

Trade Deals With EU, Japan, & South Korea At Risk

Trump's Tariff War: 50% Tariffs Rattle Indian Exporters | WION World News
Indian exporters hit by President Donald Trump’s 50% tariff say they can’t survive without government support, as calls for relief grow.



Trump's Tariff War: 50% Tariffs Rattle Indian Exporters | WION 

Despite escalating trade tensions—including the U.S. doubling tariffs to 50% amid India’s continued Russian oil imports—the two nations remain engaged in bilateral trade negotiations. India’s Trade Minister Piyush Goyal confirms active discussions toward a potential agreement.


Trump's tariff war: US President labels India-US trade 'one-sided' 

Despite escalating trade tensions—including the U.S. doubling tariffs to 50% amid India’s continued Russian oil imports—the two nations remain engaged in bilateral trade negotiations. India’s Trade Minister Piyush Goyal confirms active discussions toward a potential agreement. U.S. Treasury Secretary Scott Bessent expressed cautious optimism, stating that while the relationship is “very complicated,” both sides are working toward a resolution.

U.S-India trade talks alive despite Trump’s tariff war 

India-U.S.: At the SCO Summit, US President Donald Trump criticized India’s trade policies, calling the relationship “one-sided” and highlighting zero tariff concessions from New Delhi.


SCO Summit: Trump Slams India’s Trade Policies as PM Modi Meets Putin and Xi

India-U.S.: Big news in Washington, the White House is standing firm on its trade war policies. Trade adviser peter Navarro strongly defended president Trump's tariffs, which are now being reviewed by the Supreme Court.


India-U.S.- White House Doubles Down on Tariffs 

Former US President Donald Trump has reignited criticism of India’s trade practices, calling the US-India relationship a “totally one-sided disaster.” In a Truth Social post on September 1, 2025, Trump claimed that India exports massive volumes of goods to the United States while blocking American companies through high tariffs.

He also revealed that India recently offered to cut tariffs “to nothing,” but dismissed the move as coming “too late.” Trump further highlighted India’s continued reliance on Russian oil, a point of contention with Washington.

These remarks come amid ongoing tensions over trade, sanctions, and geopolitical alignments between the two nations.

U.S' mixed messaging tactic | Partnership or pressure on Delhi?

The carpet industry is seeking a bailout package from the central government due to a 50% US tariff, which threatens Indian exporters, especially in Bhadohi. Organizations like AICMA and CEPC are worried about losing American importers to countries with lower tariffs.

Trump's Tariff war: US tariffs threatens India's carpet hub 

India-China Relations: India and China are engaging in discussions to reset trade and investment relations, aiming to enhance economic cooperation and address existing trade imbalances.


India-China relations: India-China thaw gains momentum amid US trade war

Indian exporters are increasingly looking to leverage their manufacturing bases in Africa to bypass steep U.S. tariffs imposed by the Trump administration. The move could help preserve trade volumes while deepening India-Africa economic ties amid shifting global trade dynamics.

India-Africa trade ties: Exporters to use their factories in Africa to shield from Trump tariffs

Indian textile exporters are reeling from Washington’s decision to double tariffs on Indian goods, now reaching as high as 50 percent. Exporters call the move a shock, but also a turning point for India’s trade strategy.

Indian exporters ‘shocked’ by U.S. Tariff blow

PM Modi kicks off a crucial visit to Japan and China today as the U.S. slaps heavy tariffs on Indian goods. The diplomatic tour is seen as a bold response, signaling India’s intent to strengthen regional ties and assert its position on the global stage amid rising trade tensions with Washington.


India stands firm on Russian imports despite high tariffs

Indian exports to the US Face a 50% tariff and remains one of the highest among America's major trading partners. India is now looking to diversify from over dependence on any single nation. Can China emerge as the leading option for India? What are the challenges, risks and opportunities for two of Asia's largest economies? Take a look at this next report to find out.


India-China trade ties: How US pressure is reshaping India's trade map

Trump’s tariffs on Indian goods have come into effect, impacting key sectors and prompting India to seek new trade partnerships. The tariffs are reshaping economic relations and pushing India closer to alternative markets, including China, amid shifting global trade dynamics.


BREAKING: India Counters 50% US Tariff With Global Textile Outreach Plan 

Indian exports to the US Face a 50% tariff and remains one of the highest among America's major trading partners. India is now looking to diversify from over dependence on any single nation. Can China emerge as the leading option for India? What are the challenges, risks and opportunities for two of Asia's largest economies? Take a look at this next report to find out.

India-China Trade Ties: The Risks & Opportunities Decoded | WION

Trump’s tariffs on Indian goods have come into effect, impacting key sectors and prompting India to seek new trade partnerships. The tariffs are reshaping economic relations and pushing India closer to alternative markets, including China, amid shifting global trade dynamics.

India gears up as Trump's tariffs kick-in | How will it impact India? 

Russian President Vladimir Putin doubled down on his claim that Russia did not start the war in Ukraine.

He referred to the ongoing invasion as a "special military operation" aimed at halting the conflict, not initiating it.
Putin also stated that Russia, being the largest country by landmass, had "no need to take territory" from Ukraine — despite the ongoing occupation of Ukrainian regions like Donetsk, Luhansk, Kherson, and Zaporizhzhia.

‘Russia did not start the war’: Putin’s surprising claim | Lambasts European countries

India’s GST panel has proposed a major relief for citizens — exempting health and life insurance premiums from the current 18% tax. The recommendation comes soon after Prime Minister Modi announced sweeping GST cuts to revive economic momentum amid trade tensions with the U.S. If approved by the GST Council in the upcoming meeting before Diwali, the move could lead to a revenue loss of ₹9,700 crore but ease financial burdens on millions of Indian families.

India’s GST 2.0 reforms push gains momentum

On the final day of his Moscow visit, External Affairs Minister S. Jaishankar pushed for deeper India-Russia trade and investment ties. Addressing a business forum, Jaishankar urged Russian companies to partner with Indian firms in sectors ranging from energy to technology.


India-Russia ties: EAM calls on Russian companies to partner with Indian firms 

India’s Ministry of External Affairs has firmly rejected Nepal’s objections to the resumption of border trade with China via the Lipulekh Pass, calling Kathmandu’s territorial claims “untenable” and “not based on historical facts and evidence.” 

Despite dismissing Nepal’s claims, India reiterated its willingness to resolve the boundary issue through constructive dialogue and diplomacy.

India rejects Nepal's objection to Lipulekh trade | 'Not based on historical facts' 

Reports suggest that a scheduled visit on August 25th by U.S. Trade negotiators to New Delhi has been deferred. This halts the sixth round of talks on the proposed bilateral trade agreement. This follows Trump’s remarks in Alaska, hinting at secondary tariff relief for India and China.

Trump: 'May not impose sanctions on India, China' 

Over the last 25 years, trade between India and Latin America has grown nine-fold, rising from $2 billion in the year 2000 to almost $18 billion in 2025, said Raj Kumar Sharma, CEO of the Indo-Latin American Chamber of Commerce (ILACC). Speaking to WION about the potential for further expanding Indo-Latam investments, Sharma said that Latin American countries are looking to invest $2 billion in India by 2028, whereas India is likely to invest a larger sum in the region. A facilitator of bilateral trade and commerce, the ILACC is recognised by the Indian Ministry of External Affairs (MEA) and Ministry of Commerce (MOC).&nbsp;Recently, the ILACC launched its South India chapter, with a focus towards facilitating deeper engagement between Latin America and the Southern Indian States. The conclave witnessed the participation of entrepreneurs, industry leaders, trade envoys, and ambassadors from Latin American nations, including Peru, Cuba, El Salvador, Venezuela, Uruguay, Chile, and Argentina.&nbsp;The event featured high-level discussions, business partnership sessions, and panel dialogues aimed at enhancing trade, diplomacy and forging partnerships in sectors such as agriculture, energy, technology, healthcare, education, pharmaceuticals, and infrastructure.&nbsp;&nbsp;Addressing the event, officials emphasized on the need to move from North-South corridors and to focus on Global South connectivity. Among the prospective corridors discussed were Chennai-Caracas, Bengaluru-Buenos Aires, Mumbai-Lima. Representatives from Latin American nations said that India’s vast energy requirements could be supported by oil and natural gas and renewable energy solutions from the Latam region.&nbsp;Listing out the areas of potential cooperation, it was said that India could work with Cuba on pharma and biotechnology to develop affordable drugs for global south, Uruguay’s forward-looking policies and strategic location could prove attractive for Indian investments, Argentina can contribute in terms of mining and renewable energy, Peru welcomes partnership in the textile and agriculture sectors, El Salvador in digital transformation technologies, and Honduras in textiles and sustainable development.&nbsp;ILACC highlighted that 1.6% of overall Indian imports come from Latin America, whereas India contributed to 2% of overall imports by Latin America. Pharma, agro, chemicals, EV industries, engineering goods, automobiles, and automobile parts are among the major areas where there is potential for India to export to Latam region, industry estimates say. Further, in the high-tech areas, India can also contribute in space tech, biotech, and fintech.

Latin American countries are looking to invest $2 billion in India by 2028, whereas India is likely to invest a larger sum in the region, said the CEO of the Indo-Latin American Chamber of Commerce (ILACC), a facilitator of bilateral trade and commerce.

Over the last 25 years, trade between India and Latin America has grown nine-fold, rising from $2 billion in the year 2000 to almost $18 billion in 2025, said Raj Kumar Sharma, CEO of the Indo-Latin American Chamber of Commerce (ILACC). Speaking to WION about the potential for further expanding Indo-Latam investments, Sharma said that Latin American countries are looking to invest $2 billion in India by 2028, whereas India is likely to invest a larger sum in the region. A facilitator of bilateral trade and commerce, the ILACC is recognised by the Indian Ministry of External Affairs (MEA) and Ministry of Commerce (MOC). Recently, the ILACC launched its South India chapter, with a focus towards facilitating deeper engagement between Latin America and the Southern Indian States. The conclave witnessed the participation of entrepreneurs, industry leaders, trade envoys, and ambassadors from Latin American nations, including Peru, Cuba, El Salvador, Venezuela, Uruguay, Chile, and Argentina. The event featured high-level discussions, business partnership sessions, and panel dialogues aimed at enhancing trade, diplomacy and forging partnerships in sectors such as agriculture, energy, technology, healthcare, education, pharmaceuticals, and infrastructure. Addressing the event, officials emphasized on the need to move from North-South corridors and to focus on Global South connectivity. Among the prospective corridors discussed were Chennai-Caracas, Bengaluru-Buenos Aires, Mumbai-Lima. Representatives from Latin American nations said that India’s vast energy requirements could be supported by oil and natural gas and renewable energy solutions from the Latam region. Listing out the areas of potential cooperation, it was said that India could work with Cuba on pharma and biotechnology to develop affordable drugs for global south, Uruguay’s forward-looking policies and strategic location could prove attractive for Indian investments, Argentina can contribute in terms of mining and renewable energy, Peru welcomes partnership in the textile and agriculture sectors, El Salvador in digital transformation technologies, and Honduras in textiles and sustainable development. ILACC highlighted that 1.6% of overall Indian imports come from Latin America, whereas India contributed to 2% of overall imports by Latin America. Pharma, agro, chemicals, EV industries, engineering goods, automobiles, and automobile parts are among the major areas where there is potential for India to export to Latam region, industry estimates say. Further, in the high-tech areas, India can also contribute in space tech, biotech, and fintech.

Latin American countries are looking to invest $2 billion in India by 2028, whereas India is likely to invest a larger sum in the region, said the CEO of the Indo-Latin American Chamber of Commerce (ILACC), a facilitator of bilateral trade and commerce.

India-Latin America trade grew 9-fold in 25 years: Industry body

Amid US President Donald Trump's tariffs, the unemployment rate in America has increased, according to the Labour Department report. The US employers have added just 73,000 jobs last month, showing that the hiring was much weaker than reported in past couple of months. The unemployment rate has now ticked up to 4.2 per cent.&nbsp;The weekly report has now raised concerns over the US job market and America's economy as Trump moves forward with a radical trade policy, imposing high tariffs all across the world.&nbsp;In a report issued on Friday, the Labour Department stated that the unemployment rate has surged up to 4.2 per cent this month from 4.1 per cent in June. Moreover, it added that the ranks of unemployed increased by 221,000.&nbsp;The US federal government has lost 12,000 jobs, while jobs in administration and support fell by nearly 20,000.<h2>Democrats react, slam Trump</h2>After the Labour Department issued the report, Democratic lawmakers slammed Trump's “reckless and chaotic” tariff policies and federal cuts.&nbsp;Senate Minority Leader Chuck Schumer shared a post on X, stating that Trump's "reckless and chaotic tariffs are catching up with the economy".&nbsp;"The chickens are coming home to roost for Trump, and American families are paying the price. His reckless and chaotic tariffs and his drastic cuts are catching up with the economy, which means fewer jobs and more people out of work. Trump must end his trade war and reverse his horrible cuts now," he stated.&nbsp;While California Governor Gavin Newsom warned people, "Don't let Donald Trump gaslight you", adding that the US president is crashing our economy.&nbsp;"A July jobs report was way below expectations. May and June were revised down as well. Unemployment rate ticked back up to 4.2%. We haven’t seen conditions like these since 2020. Don’t let Donald Trump gaslight you. He is failing Americans and crashing our economy," he wrote.&nbsp;New York's Governor Kathy Hochul stressed that the US president is killing jobs and " jacking up prices with his tariffs.""Sellout Stefanik calls his leadership a “masterclass,” I call it bullshit. We will fight back," Kathy added.&nbsp;Moreover, Senator Chris Murphy, of Connecticut, called it an "unsurprisingly bad jobs report", saying, “Awful. Companies don’t want to create jobs in Trump’s chaotic economy with weakening rule of law and rampant corruption.”

The weekly report has now raised concerns over the US job market and America's economy as Trump moves forward with a radical trade policy, imposing high tariffs all across the world.

Amid US President Donald Trump's tariffs, the unemployment rate in America has increased, according to the Labour Department report. The US employers have added just 73,000 jobs last month, showing that the hiring was much weaker than reported in past couple of months. The unemployment rate has now ticked up to 4.2 per cent. The weekly report has now raised concerns over the US job market and America's economy as Trump moves forward with a radical trade policy, imposing high tariffs all across the world. In a report issued on Friday, the Labour Department stated that the unemployment rate has surged up to 4.2 per cent this month from 4.1 per cent in June. Moreover, it added that the ranks of unemployed increased by 221,000. The US federal government has lost 12,000 jobs, while jobs in administration and support fell by nearly 20,000. Democrats react, slam Trump After the Labour Department issued the report, Democratic lawmakers slammed Trump's “reckless and chaotic” tariff policies and federal cuts. Senate Minority Leader Chuck Schumer shared a post on X, stating that Trump's "reckless and chaotic tariffs are catching up with the economy". "The chickens are coming home to roost for Trump, and American families are paying the price. His reckless and chaotic tariffs and his drastic cuts are catching up with the economy, which means fewer jobs and more people out of work. Trump must end his trade war and reverse his horrible cuts now," he stated. While California Governor Gavin Newsom warned people, "Don't let Donald Trump gaslight you", adding that the US president is crashing our economy. "A July jobs report was way below expectations. May and June were revised down as well. Unemployment rate ticked back up to 4.2%. We haven’t seen conditions like these since 2020. Don’t let Donald Trump gaslight you. He is failing Americans and crashing our economy," he wrote. New York's Governor Kathy Hochul stressed that the US president is killing jobs and " jacking up prices with his tariffs." "Sellout Stefanik calls his leadership a “masterclass,” I call it bullshit. We will fight back," Kathy added. Moreover, Senator Chris Murphy, of Connecticut, called it an "unsurprisingly bad jobs report", saying, “Awful. Companies don’t want to create jobs in Trump’s chaotic economy with weakening rule of law and rampant corruption.”

The weekly report has now raised concerns over the US job market and America's economy as Trump moves forward with a radical trade policy, imposing high tariffs all across the world.

'Bulls**t! Trump crashing economy': Democrats slam Trump as unemployment rate rises in America amid 'chaotic' tariffs

The UK economy shrank by 0.3 per cent in April 2025, its steepest monthly contraction since October 2023, as official data released on June 12 showed a sharp fall in exports and weaker consumer activity.&nbsp;The contraction was significantly worse than economists’ forecast of a 0.1 per cent decline and followed modest growth of 0.2 per cent in March and 0.5 per cent in February.The Office for National Statistics (ONS) attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs.&nbsp;Legal and real estate services, along with car manufacturers, were among the worst-hit sectors.“After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States, with decreases seen across most types of goods,” Liz McKeown, Director of Economic Statistics at the ONS, told the press.Despite the monthly slump, GDP rose 0.7 per cent in the three months to April, but the latest figures have prompted concern about the UK’s growth trajectory amid rising costs and international trade tensions.<h2>Exports plunge amid US tariffs</h2>The most significant blow to April’s output came from a dramatic decline in trade with the US. British goods exports to America dropped by £2 billion ($2.7 billion) in a single month—the largest monthly fall since records began in 1997—driven by tariffs introduced by US President Donald Trump earlier this year.The US imposed wide-ranging duties of up to 25 per cent on key British exports, including steel, aluminium, and automobiles.&nbsp;The car industry, Britain’s top goods exporter to the US, saw output cut and exports tumble as manufacturers scrambled to adjust. One in eight cars built in the UK is exported to the US, underscoring the sector’s vulnerability.Manufacturing as a whole contracted by 0.6 per cent in April, while services—which account for around 80 per cent of UK economic output—shrank by 0.4 per cent. Real estate, legal services, and financial intermediaries suffered sharp declines, with the end of the property tax holiday also causing a drop in housing transactions.Meanwhile, the UK’s trade deficit in goods widened by £4.4 billion ($5.96 billion) to £60 billion ($81.39 billion) in the three months to April. The country’s surplus in services, often a stabilising factor, dipped by £500 million ($678.22 million) to £48.5 billion ($65.78 billion).Though the UK and US announced a preliminary trade deal in early May, it has yet to be fully implemented. A 10 per cent blanket tariff still applies to most British goods, and higher levies on car and steel exports remain in place, with a final agreement expected by July 9.<h2>Tax burden, job cuts add to economic strain</h2>Alongside external trade shocks, domestic policy changes also weighed on output. The rise in employer National Insurance contributions in April, coupled with higher energy, water, and council tax bills, added to business costs.&nbsp;Employers now pay 15 per cent in national insurance contributions, up from 13.8 per cent, on employee earnings above £175 per week ($237.38).Figures from HMRC show that payroll employment fell by 109,000 in May—the largest drop since the first Covid-19 lockdown in 2020. Since Chancellor Rachel Reeves’s autumn budget, more than 250,000 jobs have reportedly been lost.Reeves acknowledged the disappointing figures, calling April a “challenging month” for businesses. However, she reaffirmed her government’s commitment to growth. “Our number one mission is delivering growth to put more money in people’s pockets through our Plan for Change,” she said on June 12.Business sentiment remains cautious, with firms reportedly scaling back hiring and investment due to uncertainty around tariffs and rising labour costs. A survey by Schroders found that 63 per cent of institutional investors and wealth managers view trade tensions and tariffs as the top macroeconomic risk.<h2>Markets react</h2>Financial markets showed a muted response to the GDP figures, with the FTSE 100 initially dipping before edging up slightly. The index had closed at a record high on June 11, buoyed by strong earnings and global investor optimism.Sterling fell by a quarter of a cent against the dollar following the release of the economic data, reflecting concerns over the UK’s growth prospects amid external and internal pressures.While the Bank of England is expected to hold interest rates steady at its next meeting, policymakers face a delicate balancing act between persistent inflation and signs of economic fragility.With growth faltering, exports falling, and businesses reeling from rising costs, the outlook for the UK economy remains highly uncertain—and much may depend on the resolution of the ongoing US tariff standoff in the months ahead.

The Office for National Statistics attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs. 

The UK economy shrank by 0.3 per cent in April 2025, its steepest monthly contraction since October 2023, as official data released on June 12 showed a sharp fall in exports and weaker consumer activity. The contraction was significantly worse than economists’ forecast of a 0.1 per cent decline and followed modest growth of 0.2 per cent in March and 0.5 per cent in February. The Office for National Statistics (ONS) attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs. Legal and real estate services, along with car manufacturers, were among the worst-hit sectors. “After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the United States, with decreases seen across most types of goods,” Liz McKeown, Director of Economic Statistics at the ONS, told the press. Despite the monthly slump, GDP rose 0.7 per cent in the three months to April, but the latest figures have prompted concern about the UK’s growth trajectory amid rising costs and international trade tensions. Exports plunge amid US tariffs The most significant blow to April’s output came from a dramatic decline in trade with the US. British goods exports to America dropped by £2 billion ($2.7 billion) in a single month—the largest monthly fall since records began in 1997—driven by tariffs introduced by US President Donald Trump earlier this year. The US imposed wide-ranging duties of up to 25 per cent on key British exports, including steel, aluminium, and automobiles. The car industry, Britain’s top goods exporter to the US, saw output cut and exports tumble as manufacturers scrambled to adjust. One in eight cars built in the UK is exported to the US, underscoring the sector’s vulnerability. Manufacturing as a whole contracted by 0.6 per cent in April, while services—which account for around 80 per cent of UK economic output—shrank by 0.4 per cent. Real estate, legal services, and financial intermediaries suffered sharp declines, with the end of the property tax holiday also causing a drop in housing transactions. Meanwhile, the UK’s trade deficit in goods widened by £4.4 billion ($5.96 billion) to £60 billion ($81.39 billion) in the three months to April. The country’s surplus in services, often a stabilising factor, dipped by £500 million ($678.22 million) to £48.5 billion ($65.78 billion). Though the UK and US announced a preliminary trade deal in early May, it has yet to be fully implemented. A 10 per cent blanket tariff still applies to most British goods, and higher levies on car and steel exports remain in place, with a final agreement expected by July 9. Tax burden, job cuts add to economic strain Alongside external trade shocks, domestic policy changes also weighed on output. The rise in employer National Insurance contributions in April, coupled with higher energy, water, and council tax bills, added to business costs. Employers now pay 15 per cent in national insurance contributions, up from 13.8 per cent, on employee earnings above £175 per week ($237.38). Figures from HMRC show that payroll employment fell by 109,000 in May—the largest drop since the first Covid-19 lockdown in 2020. Since Chancellor Rachel Reeves’s autumn budget, more than 250,000 jobs have reportedly been lost. Reeves acknowledged the disappointing figures, calling April a “challenging month” for businesses. However, she reaffirmed her government’s commitment to growth. “Our number one mission is delivering growth to put more money in people’s pockets through our Plan for Change,” she said on June 12. Business sentiment remains cautious, with firms reportedly scaling back hiring and investment due to uncertainty around tariffs and rising labour costs. A survey by Schroders found that 63 per cent of institutional investors and wealth managers view trade tensions and tariffs as the top macroeconomic risk. Markets react Financial markets showed a muted response to the GDP figures, with the FTSE 100 initially dipping before edging up slightly. The index had closed at a record high on June 11, buoyed by strong earnings and global investor optimism. Sterling fell by a quarter of a cent against the dollar following the release of the economic data, reflecting concerns over the UK’s growth prospects amid external and internal pressures. While the Bank of England is expected to hold interest rates steady at its next meeting, policymakers face a delicate balancing act between persistent inflation and signs of economic fragility. With growth faltering, exports falling, and businesses reeling from rising costs, the outlook for the UK economy remains highly uncertain—and much may depend on the resolution of the ongoing US tariff standoff in the months ahead.

The Office for National Statistics attributed the decline primarily to the end of a temporary tax break on property purchases and a collapse in goods exports to the United States following the imposition of new US tariffs.&nbsp;

UK economy contracts sharply in April amid Trump tariffs and property tax shock

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