Latest news with #tradeconflict
Times of Oman
2 hours ago
- Business
- Times of Oman
US household bills will increase by $2400 annually due to Trump's tariffs: SBI Report
New Delhi: The new tariffs imposed by the United States are expected to significantly impact American households, with average bills likely to rise by around $2,400 in the short term due to inflation driven by these tariffs, according to a research report by the State Bank of India (SBI). The report, however, says that the burden of these increased household expenses will not be evenly distributed. Low-income households in the US may see losses of around USD 1,300, which is nearly three times the relative burden compared to wealthier families. On the other hand, high-income households could face losses of up to USD 5,000, though the overall impact on their financial stability would be less severe. It stated "US tariffs are projected to cost the average U.S. household about USD 2,400 in the short term". The report also pointed out that the renewed trade conflict is likely to hurt the US economy more than India's. This is because the US currently faces a weaker dollar, higher inflation, and the potential for greater price pressures due to the tariffs. The American economy, with a lower GDP growth outlook and increasing inflation, is projected to suffer more from the current trade conditions. Tariffs are expected to lead to a rise in prices, especially in sectors that rely heavily on imports, such as electronics, automobiles, and consumer durables. The report mentioned that inflation in the US is already showing signs of picking up, and the pass-through effects of these tariffs are expected to keep inflation above the US Federal Reserve's 2 per cent target through 2026. According to the report, these tariff-related pressures will not only increase household expenses but may also weigh on the broader US economy. The US GDP is expected to take a hit of around 40 to 50 basis points due to higher input costs and weaker consumer demand stemming from inflation. Meanwhile, the economic impact on India is expected to be relatively less severe. Although the US is India's largest export destination, accounting for about 20 per cent of exports in FY25, India has diversified its trade portfolio. The top 10 countries, including the US, accounts for around 53 per cent of India's total exports. This diversified base is expected to act as a cushion, limiting the negative impact on India's overall export performance. The SBI report suggested that while both economies will face challenges, the inflationary and growth impact will likely be more intense for the United States than for India.
Reuters
a day ago
- Business
- Reuters
Benign figures suggest euro zone inflation remains on target
FRANKFURT, July 31 (Reuters) - Inflation in some of the euro zone's biggest economies was at or just above expectations this month, indicating that price growth in the broader currency bloc remained near the European Central Bank's 2% target. Euro zone inflation eased back to 2% this summer after years of overshooting and the central bank now sees it hovering near this level, even as a few policymakers now fear that risks have shifted to undershooting. Inflation in Italy eased to 1.7% in July from 1.8% in June, coming above expectations for 1.6% while price growth in France was unchanged at 0.9%, above expectations for 0.8%, official figures showed on Thursday. The data, combined with an anticipated jump in Spanish inflation to 2.7% from 2.3%, suggests a modest upside risk in the euro zone figure, which is due on Friday and is seen by economists at 1.9% after a 2.0% reading in June. Such a small miss is unlikely to concern the ECB, however, after it made clear it considered inflation defeated and was not in any hurry to move rates again after halving them to 2% in the year to June. The ECB is also keen to hold out until it gains more clarity on how the evolution of a global trade conflict will impact prices. Tariffs, imposed by President Donald Trump on U.S. imports, are expected to weigh on prices for now since they slow global trade and economic growth, but a major realignment is corporate value chains could actually raise price pressures further out. For now, the ECB sees inflation dipping under 2% in the coming months and projects an 18-month period of undershooting before price growth returns back to 2% in 2027. This muted inflation picture and relatively resilient growth are why financial investors think the ECB is close to done cutting rates. Markets see less than a 50% chance of another rate cut this year and they have started to price in a hike towards the end of 2026. Friday's euro zone inflation reading is also going to be influenced by Germany but figures from various German states showed only modest changes compared to the previous month. Euro zone inflation is expected by policymakers to remain near 2% as still quick price growth in services will be offset by energy and goods prices. The stronger euro and muted wage growth are also exerting some downward pressure on prices, enough to counter upward pressure from increased government spending on things like defence or infrastructure.
Yahoo
2 days ago
- Business
- Yahoo
Tanzania's ban on foreigners operating small businesses sparks Kenyan backlash
Tanzania has barred foreign nationals from owning and operating mainly small-scale businesses, sparking concern and a backlash from neighbouring Kenya. The new directive prohibits them from 15 sectors including mobile money transfers, tour guiding, small-scale mining, on-farm crop buying, beauty salons, curio shops and establishing radio and TV operations. Trade Minister Selemani Jafo explained that foreigners had increasingly become involved in the informal sector and areas better filled by Tanzanians. Locally the move has generally been welcomed amid growing concerns that foreigners, including Chinese nationals, have been encroaching on smaller trades. Last year, traders at Dar es Salaam's bustling Kariakoo shopping district went on strike to protest against aggressive taxation and unfair competition from Chinese traders. "We've welcomed this decision because it protects the livelihoods of Tanzanian traders," Severine Mushi, the head of Kariakoo traders' association, told the Citizen newspaper. Violators risk fines, six months in jail and loss of visas and work permits. Jafo added that he hoped the ban, announced on Monday, would also encourage foreigners to invest in large-scale businesses. But it has been met with anger in Kenya, with some arguing that it violates East African Community (EAC) agreements that guarantee free movement of people and trade among its eight member states. Kenyan president apologises to Tanzania over deportation row Why Samia's hesitant reforms are fuelling Tanzanian political anger National Assembly Trade Committee chairman Bernard Shinali warned the move could trigger reciprocal restrictions, Kenya's Daily Nation reported. "There are many Tanzanians working in our mining sites too," the newspaper quoted him as saying. "It is clear that Tanzanians have gone too far and we should cut links with them." Shinali said Kenya's parliament would summon the trade minister to shed more light on the matter. Veteran Kenyan hotelier Mohammed Hersi also questioned Tanzania's move to restrict occupations for foreigners. "Sometimes, it is important to focus on the bigger picture… Protectionism will never help a country to thrive," he said on X. Many other Kenyans have also raised concern on social media, describing Tanzania's policy move as a big challenge to regional integration. "Tanzanians are doing all manner of small businesses in Kenya without any hindrance. It's clear Tanzania has never been serious in making the EAC work," one person posted on X. Tanzania and Kenya have experienced periodic political and economic tensions. Tanzania's implementation of protective tariffs and import bans has in the past drawn criticism from its regional partners. In May, Kenya's Foreign Affairs Minister Musalia Mudavadi said that about 250,000 Kenyans lived, worked or did business in Tanzania, something he noted as he emphasised the need to preserve cordial relations. He was addressing diplomatic tensions surrounding Tanzania's treatment of Kenyans who had gone to Dar es Salaam to observe the treason trial of opposition leader Tundu Lissu. Several of them were deported while prominent Kenyan activist Boniface Mwangi, along with Ugandan activist Agather Atuhaire, went missing and were later reported to have been tortured and sexually mistreated. Tanzania is due to hold general elections in October, with the ruling CCM party expected to retain power. You may also be interested in: Are East African governments uniting to silence dissent? Could this be the end of the road for Tanzania's great survivor? WATCH: Forced to beg - Tanzania's trafficked kids Go to for more news from the African continent. Follow us on Twitter @BBCAfrica, on Facebook at BBC Africa or on Instagram at bbcafrica BBC Africa podcasts Focus on Africa This Is Africa
Reuters
2 days ago
- Business
- Reuters
Bank of Canada says risk of severe global trade conflict has diminished
OTTAWA, July 30 (Reuters) - The risk of a severe and escalating global trade conflict has diminished since April and there is some clarity about what U.S. tariffs will look like, the Bank of Canada said on Wednesday. But for the second quarter in a row, the bank did not issue regular economic forecasts, citing the uncertainty over the direction of U.S. trade policy. Instead it issued three scenarios as to what might happen. In the current tariff scenario, based on conditions on July 27, GDP grows by about 1% in the second half of 2025 and then picks up, hitting 1.8% in 2027. Inflation stays at around 2%. In the de-escalation scenario, where the U.S. and others cut tariffs, growth hits about 2% in the second half of 2025 and then averages 1.7% through the end of 2027. Inflation falls in the first quarter of 2026 before rising close to 2% in 2027. In the escalation scenario, where the U.S. and others raise tariffs, growth falls in 2025 before picking up in the first half of 2026 and rising to an average of 2%. Inflation rises to just above 2.5% in the third quarter of 2026 and then falls to around 2% in 2027. (Reporting by David Ljunggren, editing by Promit Mukherjee) ((Reuters Ottawa bureau, +1 647 480 7921; opens new tab)) Keywords: CANADA CENBANK/FORECASTS
BBC News
24-07-2025
- Business
- BBC News
EU-China summit to kick off under shadow of fraught ties
A summit between China and the European Union (EU) will kick off in Beijing on Thursday, with leaders set to discuss issues ranging from trade conflict to the war in have been tempered however by uncertainty over global trade, politics and the attendance of Chinese President Xi Jinping, after he had earlier reportedly declined a visit to Brussels, where the summit was originally to be held. China confirmed this week that Xi would meet European Commission president Ursula von der Leyen and European Council president Antonio Costa in had surrounded EU-China relations at the start of the year, with hopes that a Donald Trump presidency in the US would bring the two economic powerhouses closer. But months on, EU-China ties are more fraught than before. Low expectations as meetings convene Ahead of the summit, EU officials had said that they were ready for frank conversations, while Chinese officials had framed it as a chance for greater collaboration. A Chinese foreign ministry spokesperson had told reporters on Tuesday that the bilateral relationship was at a "critical juncture of building on past achievements and opening up a new chapter".But despite this, there is little optimism in Brussels that anything significant will emerge from the summit, even though the EU's 27 member states are grappling with similar pressures to China, not least the tariffs imposed on their exports to the had been hope of finding common cause and European Commission President Ursula von der Leyen spoke earlier this month of the EU's relationship with Beijing as "one of the most defining and consequential for the rest of this century" and of the need to making progress on deadlocked President Xi's decision to reject an invitation to Brussels earlier this year, and then to show up in Moscow in May for Russia's annual World War Two victory parade, made for a poor Eroglu, who chairs the European Parliament's China delegation, believes that an already fragile trust between China and the EU has reached a new low: "In this atmosphere of strategic mistrust, the mood is clearly tense - if not frosty."One of the main things that has led to the deterioration of relations between the two giants is the issue of the Russia-Ukraine EU's decision to impose sanctions last week on two Chinese banks for their role in supplying Russia has annoyed Beijing in the run-up to this summit and made for an awkward climate. China said it had lodged "solemn representations" to the EU's trade chief ahead of the reports that Chinese foreign minister Wang Yi allegedly told EU foreign policy chief Kaja Kallas this month that Beijing did not want to see Russia lose the war in Ukraine - contradicting China's official position of neutrality - have also been circulating. Wang Yi reportedly said that the Russia-Ukraine war would keep the US distracted from its rivalry with China - something Beijing has denied. Kallas had earlier this year called China the "key enabler of Russia's war" in Ukraine, adding that "if China would want to really stop the support, then it would have an impact". Trade relations are also central to the EU's the EU imposed tariffs on Chinese-made electric vehicles last year, Beijing came up with retaliatory duties on European this month, Beijing restricted government purchases of EU medical devices - a response to the EU imposing similar limitations on Chinese medical equipment in perhaps more importantly, China also raised export controls on rare earths and critical minerals this year and the European Commission's von der Leyen has accused Beijing of using its "quasi-monopoly" on the global market in rare earths as a weapon to undermine competitors in key is already frustrated by seeing its industries threatened by cheap, subsidised Chinese goods. Last year's trade deficit with China was €305.8bn ($360bn; £265bn) and it has doubled in just nine an earlier interview with Chinese state-linked news outlet the Paper, China's ambassador to the European Union Cai Run took issue with the EU's positioning of China as a "partner for co-operation, economic competitor, and systemic rival"."The EU's threefold positioning of China is like a traffic light going green, amber and red lights all at once. Not only does it fail to direct traffic, it only creates difficulties and obstruction."
