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Gulf Business
an hour ago
- Business
- Gulf Business
Insights: GCC, tariffs and the new world trade order
Image: Supplied As Donald Trump passes the 100-day milestone of his second term as President of the US, the US Administration's take on immigration, government bureaucracy, and the future of energy have all made front-page news. It is the topic of tariffs, however, that is compelling businesses and policymakers to turn headlines into action. Back in April, the US announced a baseline tariff of 10 per cent on almost all imports into the country. According to The White House, the move was intended to protect American jobs, American manufacturing, and the American economy at large. In the process, it has triggered a global rethink among governments over how to protect national interests of their own. For the GCC, the direct impact of the new tariffs is relatively low. Between 2014 and 2022, the US share of GCC's exports ranged between just 3 per cent and 6 per cent. What's more, the region's stability, strong energy exports, and sovereign wealth all combine to limit potential damage. Still, with seismic shifts underway globally, now is the time for the GCC to explore fresh avenues for collaboration, investment, and growth. This preparation will require a multifaceted approach, including a mix of strategic thinking, business transformation, policy support, and assessment of the risks and opportunities ahead. Trade in the time of Trump's tariffs: Thinking strategically Since the new US tariffs were announced, they have been imposed, modified, and paused multiple times. Yet, behind the uncertainty is a hard fact: the nature of trade is changing and there may be no going back. Already, long-standing multilateral arrangements are being replaced by bi-lateral deals, global investments are being redistributed, and supply chains are being broken down and rebuilt. Against this backdrop, public and private-sector decision makers in the GCC must think strategically and leverage their stability and strengths to prepare for the new-look future. For policy makers: It is important to establish new strategic bilateral agreements with entities and conclude ongoing negotiations. This must be done in a way that both safeguards local industries and secures a place for the GCC in global supply chains. The recent bi-lateral agreement between the US and UK serves as a useful example. On May 8, the US and UK announced a new deal, with tariffs on cars exported to the US from the UK being significantly reduced and the 25 per cent tariff on UK steel and aluminum scrapped altogether. Meanwhile, the US will have preferential access to UK aerospace components. It should be noted, however, that the initial 10 per cent tariff rate applied to the UK remains in place. For businesses: There is now an opportunity to explore new markets, identify ways to integrate into the transforming global supply chains, pursue international partnerships and acquisitions or invest in overseas assets under new or improved conditions. Meanwhile, corporations and governments alike can leverage the midterm benefits of shifting trade dynamics to facilitate the acquisition of technologies and purchase products at lower cost. No room for complacency The GCC is well placed to thrive in a new trade order, but it should remain vigilant for risks and opportunities on the horizon. One obvious focus area is energy, with the current trade uncertainty placing oil prices under short-term pressure. In a context of lower prices, GCC governments are likely to reconsider their spending plans while remaining poised to seize opportunities as they arise. Similarly, businesses in the region may need to update their business plans accordingly. On the topic of spending, currency recalibration and dollar depreciation could lead to a reduction of purchasing power – yet it could increase GCC competitiveness too. The region's trading position could also be aided by an easing in international competition, albeit brief, which may yield attractive deals in the form of favorable contracts or cheaper goods. As the region weighs up the potential scenarios, it will be essential for public- and private-sector organizations to carefully assess the landscape. For policymakers: Monitoring trade risks and applying the necessary safeguards are crucial tasks. Revision of monetary and labor policies can also help to balance the social and economic impacts of the new dynamics of global trade and global economy dynamics. For businesses: A thorough assessment of the mid-term risks and opportunities, supported by sophisticated scenario-based thinking, is essential. This assessment should explore the potential for both increased competition and new market attractiveness, and provide answers to key questions across various possible scenarios : What better deals can we secure? What opportunities should we invest in? And what costs might arise along the way?' Take a chance on transformation As with disruption to any status quo, the new US import tariffs present economies the world over with formidable challenges – but there are opportunities for the taking too. For companies across the GCC, this period of flux offers the chance to build strategic resilience and increase the potential for growth. For many organisations, seizing that chance requires more than surface-level change; it demands fundamental transformation. That means building new capabilities, entering new partnerships, and getting up to speed with changes on the ground, ready to seize fresh opportunities. Scenario-based analysis (taking into account various possible futures and thinking multi-optionally), as well as speed of decision-making, agility in implementation, and organizational responsiveness, are now essential parts of the strategic toolkit. Right now, those opportunities could emerge from anywhere. With almost no industry or geography immune to the tides of change, new overseas investment and M&A prospects could rise to the surface. Meanwhile top talent is likely to be on the lookout for different, more stable positions both at home and abroad, offering GCC businesses a valuable chance to ramp up their capabilities. From securing talent to signing deals, first-mover advantage will be key. Think policy As the region's businesses step bravely into this new future, policymakers have a vital supporting role to play. Here, international dealmaking will be paramount – a skill that GCC governments have mastered over time, as evidenced by their lineup of alliances and bi-lateral trade agreements, and steady stream of FDI. Policymakers can also support businesses across industries through targeted incentive schemes and regulation designed to positively impact international trade and give The playbook of global trade is being rewritten. There are challenges ahead, but the GCC has a unique opportunity to pen a new chapter of its own. The writer is a partner, Energy and Utilities at
Yahoo
2 days ago
- Business
- Yahoo
Charting the Global Economy: US GDP Falls on Larger Trade Hit
(Bloomberg) -- The US economy contracted slightly to start the year, largely reflecting a bigger tariff-related trade hit but also a larger downshift in household spending growth than first estimated. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania NYC Congestion Toll Brings In $216 Million in First Four Months The Economic Benefits of Paying Workers to Move Where the Wild Children's Museums Are In contrast, an export surge help drive the Canadian economy in the first quarter as businesses accelerated shipments ahead of higher US duties. Gross domestic product in India rose at a stronger-than-forecast 7.4% pace. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics: US & Canada The US economy shrank at the start of the year, restrained by weaker consumer spending and an even bigger impact from trade than initially reported. The economy's primary growth engine — consumer spending — advanced 1.2%, down from an initial estimate of 1.8% and the weakest pace in almost two years. Meantime, net exports subtracted nearly 5 percentage points from the GDP calculation, slightly more than the first projection and the largest on record. A strong jump in tariff-driven exports fueled Canada's growth at the start of this year, offsetting domestic weakness in other parts of the economy. Preliminary data also suggests some continued momentum at the start of the second quarter, with output rising 0.1% in April, led by mining, oil and gas, and finance industries. Consumer sentiment rebounded in late May from one of the lowest readings on record earlier in the month and long-term inflation expectations retreated as concerns about the economy eased after the rollback of China tariffs. In the wake of Nvidia Corp.'s latest earnings report and upbeat sales forecast, the US government's GDP report also underscored the locomotive power of the artificial intelligence boom. Business investment in computers and other information processing equipment contributed a record 1.01 percentage points to first-quarter GDP. Europe European firms in China are the most pessimistic about growth prospects since 2011, underscoring the challenges of doing business in the world's second-largest economy despite recent government efforts to address some complaints. Some 29% of respondents were downbeat on the outlook for their sector over the next two years, according to an annual report by the European Union Chamber of Commerce in China. Germany's inflation rate dropped to 2.1% in May, slowing less than expected and highlighting lingering risks as the European Central Bank prepares to cut rates again. The data follow reports from Italy and Spain, where inflation eased to just below 2%, supporting the case for borrowing costs to be lowered further. Meanwhile, France said consumer price rose just 0.6% from the previous year. Europe is gradually adding gas to its depleted storage sites despite seasonal works at production facilities across the globe. In addition, overall demand for liquefied natural gas in Asia remains weak, which is a relief for European buyers that compete for the same fuel. Asia For decades, Asia's export powerhouses had a simple financial strategy: Sell goods to the US, then invest the proceeds in American assets. That model is now facing its biggest threat since the 2008 global financial crisis as Donald Trump tries to remake global trade and the US economy — upending the logic behind $7.5 trillion of investments from Asia. Some of the world's biggest money managers say an unwind is just getting started. India's economy grew at a faster pace than analysts expected, driven by some pick up agricultural activity and investments. While India retains its title as the world's fastest-growing major economy, the annual growth rate marks a notable slowdown from the 8% average seen in recent years — the pace needed by Prime Minister Narendra Modi to achieve his ambitious goal of making the country a developed nation by 2047. Emerging Markets Brazil's consumer prices rose less than forecast in early May, fueling bets that the central bank will halt its cycle of interest rate hikes while keeping its monetary policy restrictive going forward to tame inflation. World Japan lost its position as the world's largest creditor nation for the first time in 34 years, giving up the title to Germany despite posting a record amount of overseas assets. Japan's status as the world's biggest net-creditor nation was a consequence of decades of current account surpluses that saw Japanese investors and companies load up on holdings abroad. New Zealand lowered rates for sixth straight meeting. South Africa, the Bank of Korea, Mozambique and Eswatini also cut. Hungary, Israel, Uruguay, Guatemala and Tunisia kept borrowing costs unchanged. --With assistance from Nazmul Ahasan, Ruth Carson, Rebecca Choong Wilkins, William Horobin, Masaki Kondo, Diana Li, Lucille Liu, Matthew Malinowski, Elena Mazneva, Prateek Mazumdar, Andrew Rosati, Anup Roy, Augusta Saraiva, Zoe Schneeweiss, Randy Thanthong-Knight, Erica Yokoyama and Jana Randow. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Charting the Global Economy: US GDP Falls on Larger Trade Hit
(Bloomberg) -- The US economy contracted slightly to start the year, largely reflecting a bigger tariff-related trade hit but also a larger downshift in household spending growth than first estimated. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania NYC Congestion Toll Brings In $216 Million in First Four Months The Economic Benefits of Paying Workers to Move Where the Wild Children's Museums Are In contrast, an export surge help drive the Canadian economy in the first quarter as businesses accelerated shipments ahead of higher US duties. Gross domestic product in India rose at a stronger-than-forecast 7.4% pace. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics: US & Canada The US economy shrank at the start of the year, restrained by weaker consumer spending and an even bigger impact from trade than initially reported. The economy's primary growth engine — consumer spending — advanced 1.2%, down from an initial estimate of 1.8% and the weakest pace in almost two years. Meantime, net exports subtracted nearly 5 percentage points from the GDP calculation, slightly more than the first projection and the largest on record. A strong jump in tariff-driven exports fueled Canada's growth at the start of this year, offsetting domestic weakness in other parts of the economy. Preliminary data also suggests some continued momentum at the start of the second quarter, with output rising 0.1% in April, led by mining, oil and gas, and finance industries. Consumer sentiment rebounded in late May from one of the lowest readings on record earlier in the month and long-term inflation expectations retreated as concerns about the economy eased after the rollback of China tariffs. In the wake of Nvidia Corp.'s latest earnings report and upbeat sales forecast, the US government's GDP report also underscored the locomotive power of the artificial intelligence boom. Business investment in computers and other information processing equipment contributed a record 1.01 percentage points to first-quarter GDP. Europe European firms in China are the most pessimistic about growth prospects since 2011, underscoring the challenges of doing business in the world's second-largest economy despite recent government efforts to address some complaints. Some 29% of respondents were downbeat on the outlook for their sector over the next two years, according to an annual report by the European Union Chamber of Commerce in China. Germany's inflation rate dropped to 2.1% in May, slowing less than expected and highlighting lingering risks as the European Central Bank prepares to cut rates again. The data follow reports from Italy and Spain, where inflation eased to just below 2%, supporting the case for borrowing costs to be lowered further. Meanwhile, France said consumer price rose just 0.6% from the previous year. Europe is gradually adding gas to its depleted storage sites despite seasonal works at production facilities across the globe. In addition, overall demand for liquefied natural gas in Asia remains weak, which is a relief for European buyers that compete for the same fuel. Asia For decades, Asia's export powerhouses had a simple financial strategy: Sell goods to the US, then invest the proceeds in American assets. That model is now facing its biggest threat since the 2008 global financial crisis as Donald Trump tries to remake global trade and the US economy — upending the logic behind $7.5 trillion of investments from Asia. Some of the world's biggest money managers say an unwind is just getting started. India's economy grew at a faster pace than analysts expected, driven by some pick up agricultural activity and investments. While India retains its title as the world's fastest-growing major economy, the annual growth rate marks a notable slowdown from the 8% average seen in recent years — the pace needed by Prime Minister Narendra Modi to achieve his ambitious goal of making the country a developed nation by 2047. Emerging Markets Brazil's consumer prices rose less than forecast in early May, fueling bets that the central bank will halt its cycle of interest rate hikes while keeping its monetary policy restrictive going forward to tame inflation. World Japan lost its position as the world's largest creditor nation for the first time in 34 years, giving up the title to Germany despite posting a record amount of overseas assets. Japan's status as the world's biggest net-creditor nation was a consequence of decades of current account surpluses that saw Japanese investors and companies load up on holdings abroad. New Zealand lowered rates for sixth straight meeting. South Africa, the Bank of Korea, Mozambique and Eswatini also cut. Hungary, Israel, Uruguay, Guatemala and Tunisia kept borrowing costs unchanged. --With assistance from Nazmul Ahasan, Ruth Carson, Rebecca Choong Wilkins, William Horobin, Masaki Kondo, Diana Li, Lucille Liu, Matthew Malinowski, Elena Mazneva, Prateek Mazumdar, Andrew Rosati, Anup Roy, Augusta Saraiva, Zoe Schneeweiss, Randy Thanthong-Knight, Erica Yokoyama and Jana Randow. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox ©2025 Bloomberg L.P.
Yahoo
3 days ago
- Business
- Yahoo
Gold Falls as Traders Await US Data for Clues on Tariff Impacts
(Bloomberg) -- Gold fell, putting it on track for an almost 2% weekly loss, amid a technical pullback in prices ahead of key US economic data. NYC Congestion Toll Brings In $216 Million in First Four Months The Economic Benefits of Paying Workers to Move Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania NY Wins Order Against US Funding Freeze in Congestion Fight Why Arid Cities Should Stick Together The precious metal fell as much as 0.8% on Friday, as investors awaited the US personal consumption expenditures price index — the Federal Reserve's preferred inflation metric due later today. Markets will be assessing the report, which will offer an insight into real consumer spending and wage growth in April, for clues on how President Donald Trump's global trade war has impacted the economy. The selloff was also driven by technical factors ahead of the data release, according to Kelvin Wong, senior analyst at Oanda Asia Pacific Pte. 'The price action in gold has twice failed to break above the key near-term resistance level of $3,328 — both in the US session yesterday and again early in the Asian session today,' he said. Still, despite the declines this week, bullion's haven appeal remains intact as markets were once again rattled by uncertainties surrounding Trump's tariff agenda, after a federal appeals court on Thursday gave Trump a temporary reprieve from a ruling threatening to throw out the bulk of his planned levies. Tensions with China also resurfaced this week, with US Treasury Secretary Scott Bessent characterizing trade talks with Beijing as 'a bit stalled.' Earlier in the week, the White House announced it would start revoking Chinese student visas, while also introducing new restrictions on the sales of chip design software — prompting an angry rebuke from Beijing. All that is likely to reinforce the haven appeal of gold, which Goldman Sachs Group Inc. said this week would remain a hedge against inflation in long-term portfolios along with crude. Spot gold was down 0.5% to $3,300 an ounce as of 1:40 p.m. in Singapore. The Bloomberg Dollar Spot Index edged up, after fluctuating in the previous session. Silver, palladium and platinum all declined. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
3 days ago
- Business
- Bloomberg
Asian Markets Face Soft Start as US Rally Fades: Markets Wrap
Asian markets were set to decline in early trading Friday as curbed market optimism was driven by a slowing US economy and legal uncertainties around President Donald Trump's trade war. US equity futures slipped after the S&P 500 Index pared most of an advance that earlier approached 1%. Contracts for Australia, Japan and Hong Kong pointed to a loss when cash markets reopen Friday. The dollar was mixed in early trading against major currencies.
