Latest news with #tradewars
Daily Mail
2 days ago
- Business
- Daily Mail
Global economy set for slowest growth since Covid as Trump's trade wars take their toll
The world economy is on course for the slowest growth since the pandemic as Donald Trump's trade wars take their toll, the OECD warned yesterday. The latest forecast from the Paris-based Organisation for Economic Cooperation and Development pointed to growth of just 2.9 per cent this year and next. And Bank of England governor Andrew Bailey gave his strongest comments yet on the impact of Trump's tariff war on global trade, saying it had been 'blown up'. The impact of the disruption was laid bare in separate figures showing China's manufacturing centre went into reverse last month as US tariffs bite. The OECD's forecast for a slowdown would mean world growth falling below 3 per cent for the first time since 2020 – when Covid lockdowns sent business activity into reverse. Back in March it had predicted 3.1 per cent growth in 2025 and 3 per cent in 2026. The US, the world's biggest economy, saw a dramatic downgrade from 2.2 per cent to 1.6 per cent for this year. Britain is expected to grow by 1.3 per cent, down from 1.4 per cent. OECD secretary-general Mathias Cormann said: 'The global economy has shifted from a period of resilient growth and declining inflation to a more uncertain path. Today's policy uncertainty is weakening trade and investment, diminishing consumer and business confidence and curbing growth prospects.' Trump introduced swingeing tariffs on trading partners on 'Liberation Day' at the start of April – before he was forced into a 90-day pause when markets sold off sharply. Separate tariffs have also been introduced covering the likes of steel and cars. UK businesses continue to suffer despite a much-vaunted deal between Britain and the United States – which was announced nearly a month ago but has yet to take effect. It means that a decision by Trump to hike additional tariffs on steel from 25 per cent to 50 per cent will hit British industry despite the promise of relief. Yesterday, Bank governor Bailey highlighted in stark terms the damaging impact that the disarray would have on investment decisions and broader global growth. He told the Commons Treasury select committee: 'The overall picture on trade now, I'm afraid, is one where the rules-based system is dead. 'Over a long time we built up a pattern of world trade agreements which led to a lowering of tariffs. 'I'm afraid that system has now really been blown up to a considerable degree, let's be honest, by all of this. That has very serious consequences for the world economy.'
Globe and Mail
2 days ago
- Business
- Globe and Mail
US growth likely to slow to 1.6% this year, hobbled by Trump's trade wars, OECD says
WASHINGTON (AP) — U.S. economic growth will slow to 1.6% this year from 2.8% last year as President Donald Trump's erratic trade wars disrupt global commerce, drive up costs and leave businesses and consumers paralyzed by uncertainty. The Organization for Economic Cooperation and Development forecast Tuesday that the U.S. economy — the world's largest — will slow further to just 1.5% in 2026. Trump's policies have raised average U.S. tariff rates from around 2.5% when he returned to the White House to 15.4%, highest since 1938, according to the OECD. Tariffs raise costs for consumers and American manufacturers that rely on imported raw materials and components. World economic growth will slow to just 2.9% this year and stay there in 2026, according to the OECD's forecast. It marks a substantial deceleration from growth of 3.3% global growth last year and 3.4% in 2023. The world economy has proven remarkably resilient in recent years, continuing to expand steadily — though unspectacularly — in the face of global shocks such as the COVID-19 pandemic and Russia's invasion of Ukraine. But global trade and the economic outlook have been clouded by Trump's sweeping taxes on imports, the unpredictable way he's rolled them out and the threat of retaliation from other countries. Reversing decades of U.S. policy in favor of freer world trade, Trump has levied 10% taxes — tariffs — on imports from almost every country on earth along with specific duties on steel, aluminum and autos. He's also threatened more import taxes, including a doubling of his tariffs on steel and aluminum to 50%. Without mentioning Trump by name, OECD chief economist Álvaro Pereira wrote in a commentary that accompanied the forecast that "we have seen a significant increase in trade barriers as well as in economic and trade policy uncertainty. This sharp rise in uncertainty has negatively impacted business and consumer confidence and is set to hold back trade and investment.'' Adding to the uncertainty over Trump's trade wars: A federal court in New York last week blocked most of Trump's tariffs, ruling that he'd overstepped his authority in imposing them. Then an appeals court allowed the Trump administration to continue collecting the taxes while appeals worked their way through the U.S. courts. China — the world's second-biggest economy — is forecast to see growth decelerate from 5% last year to 4.7% in 2025 and 4.3% in 2026. Chinese exporters will be hurt by Trump's tariffs, hobbling an economy already weakened by the collapse of the nation's real estate market. Some of the damage will be offset by help from the government: Beijing last month outlined plans to cut interest rates and encourage bank lending as well as allocating more money for factory upgrades and elder care, among other things. The 20 countries that share the euro currency will collectively see economic growth pick up from 0.8% last year to 1% in 2025 and 1.2% next year, the OECD said, helped by interest rate cuts from the European Central Bank. The Paris-based OECD, comprising 38 member countries, works to promote international trade and prosperity and issues periodic reports and analyses.
Washington Post
2 days ago
- Business
- Washington Post
US growth likely to slow to 1.6% this year, hobbled by Trump's trade wars, OECD says
WASHINGTON — U.S. economic growth will slow to 1.6% this year from 2.8% last year as President Donald Trump's erratic trade wars disrupt global commerce, drive up costs and leave businesses and consumers paralyzed by uncertainty. The Organization for Economic Cooperation and Development forecast Tuesday that the U.S. economy — the world's largest — will slow further to just 1.5% in 2026. Trump's policies have raised average U.S. tariff rates from around 2.5% when he returned to the White House to 15.4%, highest since 1938, according to the OECD. Tariffs raise costs for consumers and American manufacturers that rely on imported raw materials and components.
Associated Press
2 days ago
- Business
- Associated Press
US growth likely to slow to 1.6% this year, hobbled by Trump's trade wars, OECD says
WASHINGTON (AP) — U.S. economic growth will slow to 1.6% this year from 2.8% last year as President Donald Trump's erratic trade wars disrupt global commerce, drive up costs and leave businesses and consumers paralyzed by uncertainty. The Organization for Economic Cooperation and Development forecast Tuesday that the U.S. economy — the world's largest — will slow further to just 1.5% in 2026. Trump's policies have raised average U.S. tariff rates from around 2.5% when he returned to the White House to 15.4%, highest since 1938, according to the OECD. Tariffs raise costs for consumers and American manufacturers that rely on imported raw materials and components. World economic growth will slow to just 2.9% this year and stay there in 2026, according to the OECD's forecast. It marks a substantial deceleration from growth of 3.3% global growth last year and 3.4% in 2023. The world economy has proven remarkably resilient in recent years, continuing to expand steadily — though unspectacularly — in the face of global shocks such as the COVID-19 pandemic and Russia's invasion of Ukraine. But global trade and the economic outlook have been clouded by Trump's sweeping taxes on imports, the unpredictable way he's rolled them out and the threat of retaliation from other countries. Reversing decades of U.S. policy in favor of freer world trade, Trump has levied 10% taxes — tariffs — on imports from almost every country on earth along with specific duties on steel, aluminum and autos. He's also threatened more import taxes, including a doubling of his tariffs on steel and aluminum to 50%. Without mentioning Trump by name, OECD chief economist Álvaro Pereira wrote in a commentary that accompanied the forecast that 'we have seen a significant increase in trade barriers as well as in economic and trade policy uncertainty. This sharp rise in uncertainty has negatively impacted business and consumer confidence and is set to hold back trade and investment.'' Adding to the uncertainty over Trump's trade wars: A federal court in New York last week blocked most of Trump's tariffs, ruling that he'd overstepped his authority in imposing them. Then an appeals court allowed the Trump administration to continue collecting the taxes while appeals worked their way through the U.S. courts. China — the world's second-biggest economy — is forecast to see growth decelerate from 5% last year to 4.7% in 2025 and 4.3% in 2026. Chinese exporters will be hurt by Trump's tariffs, hobbling an economy already weakened by the collapse of the nation's real estate market. Some of the damage will be offset by help from the government: Beijing last month outlined plans to cut interest rates and encourage bank lending as well as allocating more money for factory upgrades and elder care, among other things. The 20 countries that share the euro currency will collectively see economic growth pick up from 0.8% last year to 1% in 2025 and 1.2% next year, the OECD said, helped by interest rate cuts from the European Central Bank. The Paris-based OECD, comprising 38 member countries, works to promote international trade and prosperity and issues periodic reports and analyses.
Forbes
3 days ago
- Business
- Forbes
Corporate Leaders Are Underestimating The Role Key Enabling Functions Should Play In Business Strategy
Trade wars, regulatory pivots, complex jurisdictional nuances – these are just a handful of the day-to-day challenges that have become major strategic priorities for multinational corporations around the world. In fact, now is arguably the most vital time for C-suites and their respective enabling functions, such as tax, trade, legal, HR, and procurement departments, to be in lockstep when it comes to everything from day-to-day governance to big-picture growth strategy. However, new research from Thomson Reuters finds a significant disconnect between the strategic value these functional departments play and executive priorities for business growth and expansion. At the heart of this push-pull is a myopic focus on what professional departments such as legal, tax, trade, accounting, risk and compliance have traditionally done, and what they can do in a more agile environment. For example, when C-suite leaders were asked about the parts of their business that are the most significant contributors to reaching organizational objectives, they cited customer success teams (78%) and the technology department (62%) as the top two contributors. By contrast, key enabling functions, such as tax (10%), HR (11%), procurement (16%), legal (17%), accounting (17%), and trade (21%) were less likely to be perceived as significant contributors to overall business objectives. Are corporate leaders undervaluing their departments' strategic value? That's a problem, not only for the enabling functions but also for the C-suite leaders, who are clearly underestimating the role that these departments play right now as businesses stare down a global trade war, massive geopolitical and regulatory uncertainty, widespread economic volatility, and ongoing technological transformation. Show me a CEO who is thinking about acquiring a foreign company or reengineering a global trade strategy in anticipation of new tariffs, and I will show you a tax, legal, trade, procurement, HR, and compliance department that's about to play a major role in how smoothly that process will go. Unfortunately, some leaders just don't see it this way, despite widespread acknowledgement of the importance of streamlining compliance and enabling functions. According to our survey of C-suite leaders, time spent on compliance and reporting is the single most common constraint on the effectiveness of enabling functions, with 68% of respondents citing it as a significant or moderate barrier. Additionally, 52% identified ineffective data and information flows between different enabling functions as a significant or moderate constraint. It's in this line of thinking that a dangerous disconnect starts to emerge. The C-suite clearly acknowledges the necessity of improving how these departments operate, yet they regard these issues as tactical problems rather than strategic opportunities. Equipped with the right tools and a sufficiently broad mandate, the enabling functions of a business — such as tax, trade, legal, HR and procurement, and others — possess the capability not only to check off requirements and mitigate risks but also to forecast potential challenges, anticipate new risks, and collaborate with the C-suite to foster business growth. This research also reveals a critical opportunity to elevate legal, accounting, risk, and compliance functions, particularly in the context of AI. While it's clear that C-suite leaders recognize AI's transformational potential, they are not fully leveraging their governance functions to drive that transformation. When these departments are properly empowered with AI and digital tools, they can simultaneously strengthen risk management and accelerate innovation—essentially turning what is perceived as a constraint into a competitive advantage. The research suggests that simplified compliance and reporting and streamlined risk management represent major opportunities for improvement, with C-Suite leaders citing cross-functional initiatives, digital transformation, risk management, and enhancements to customer experience as examples where enabling functions can make significant contributions. By getting more buy-in and consultation from these departments that are on the frontline of many of these battles that organizations are waging, integrations could be cleaner, silos between departments would topple, and the full power of AI can be unlocked. As businesses continue to pursue aggressive digital transformation goals, those that invest in AI-powered tools to empower their governance and financial functions will transform what many C-Suite leaders view as operational constraints into strategic differentiators. But this cannot be done without a fundamental shift in how leaders think about their departments. No longer are accounting professionals just bean counters; they are financial risk forecasters. Legal professionals are now global compliance experts. Risk professionals are forensic accountants. There is so much crossover in the modern corporation that there needs to be a new level of interoperability and a deeper understanding of how these once-siloed functions can collaborate to create a sum greater than the parts.
