Trump tariffs damage global growth prospects; Dutch PM steps down

National Business Review

2 days ago

Welcome to your Wednesday recap of the key international business and political stories from around the world.
First today, the OECD has cut global growth forecasts because of US President Donald Trump's trade war with the rest of the world, including on Canada and China.
The agency said global GDP growth could slow from 3.3% last year to 2.9% this year and in 2026. That assumed the tariffs were kept in place despite ongoing legal challenges.
It said the slowdown was centered on the United States, Canada and Mexico, with China and other economies expected to notch smaller downward adjustments, the Guardian reported.
'Substantial increases in barriers to trade, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have marked adverse effects on growth prospects if they persist,' the OECD said.
Business investment could also be put on ice because of the trade tension, as well as significant disruptions in cross-border supply chains, and possibly increase inflation expectations causing higher interest rates.
US President Donald Trump.
Meanwhile, Bank of England governor Andrew Bailey warned the path of UK interest rates was uncertain because of the trade tariffs.
He told a Treasury committee that lower rates were still expected, but by how low and how quickly remained unclear.
Elsewhere, the Hamas-run health ministry said at least 27 people waiting for aid in Gaza were killed and 90 injured after Israeli troops opened fire in Rafah, the BBC reported.
The Israeli military said it fired shots after identifying "several suspects" and was assessing reports of casualties.
Ukraine said it struck a bridge connecting Russia and the occupied Crimean Peninsula with explosives planted underwater, CNN reported.
Reports suggested explosives severely damaged the underwater pillars supporting the bridge. The scale of the damage was not immediately clear.
To politics, and South Korean Liberal Party candidate Lee Jae-myung led in the country's snap presidential election, Al Jazeera reported. His conservative rival, Kim Moon-soo conceded the race and congratulated Lee.
The election was sparked after ousted leader Yoon Suk Yeol failed to revive martial law after decades of democratic rule. With about 95% of the ballots counted, Lee had won 48.8% of the vote, while Kim had 42%, according to the National Election Commission.
Kim told a news conference that he 'humbly accepts [the] people's choice'. Bloomberg reported that Lee promised to improve people's lives.
'I will never forget the mission you expect of me and have entrusted me with, and I will firmly and reliably fulfil it without a single moment of deviation,' Lee said.
He said his first task was to avoid a recurrence of any imposition of martial law and his second was to revive the economy, Bloomberg reported.
In developing news, Dutch Prime Minister Dick Schoof stepped down after disagreement over immigration proposals led to far-right leader Geert Wilders withdrawing his party from the ruling coalition, CNBC reported.
'We had no choice. I promised the voter the strictest asylum policy ever, but that was not granted to you,' Wilders said.
Finally, electric vehicle company Tesla was 'not interested' in manufacturing in India, according to the country's Heavy Industries Minister HD Kumaraswamy, the BBC reported.
The Indian government this week presented guidelines of a scheme to promote EV manufacturing in the country.
Tesla only planned to open two showrooms in India. "Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest [in manufacturing electric cars in India]. Tesla - we are not expecting from them," Kumaraswamy said.