Hello MarketShalians, Welcome to today’s World Economy Actions and Its Impact financial blog at MarketShala. Let us take a look at what major buzz related to the economic actions are taking place in the country and the world and what impact they are going to have.
Table of Contents
Trump Misjudged China’s Resolve in Trade War, Says Chinese Adviser: U.S. Faces High-Stakes Standoff
According to a Chinese Foreign Ministry adviser, President Donald Trump has misjudged Beijing because he assumed it would succumb to economic pressure, leaving the US unprepared to handle the current tariff standoff. “China is determined to challenge the US to the end,” Wu said. “This is not a slogan,” he said, referring to Chinese officials’ vow to “fight to the end.” “We are witnessing a highly confrontational standoff between our two countries, and there is a risk of it escalating,” Wu said, pointing to finance, technology, security and people-to-people exchanges as areas that could be affected by the escalating trade war.
China Holds Off Stimulus Despite Trade War Fears, Experts Say U.S. May Soon Face Inflation Pressure
China haspledged to ‘fully prepare’ contingency measures to shield its economy from ‘growing external risks’, a veiled reference to potential trade conflicts. However, during a key monthly meeting on Friday, senior leaders stopped short of hinding at immediate stimulus measures.China’s stronger-than-expected growth in the first quarter has given the government time to consider new steps. Arthur Kroeber, an analyst at Gavekal Dragonomics, suggested that Trump could face growing political pressure as tariffs contribute to rising inflation. “The U.S. is going to understand that they have to bend and they have to take some kind of negotiating stance with China,” he said. “It’s just a question of how long that takes and what kind of specific form it takes.”
China’s GDP Set to Slow Sharply Amid Trade War: Global Economy Hangs on U.S.-China Deal
China’s GDP growth is expected to slow sharply from April as tariffs halt a major contributor to China’s growth. In the first quarter of 2025, 40% of growth in China came from global trade. Due to the drop in exports, China’s GDP growth will slow unless a major deal is reached with the US. This looks to be a long process and there is no easy path to convergence yet. The fate of the global economy and financial markets largely depends on whether the US and China are able to find a way to avoid a prolonged trade war.
Trump’s Trade Policies Fuel Economic Uncertainty: Businesses Struggle, Consumers Brace for Impact
The growing impact of higher costs from the Trump administration’s trade policy is making it increasingly difficult for the corporate world to forecast how the year will play out, while consumers are bracing for economic pain. Fed Bank of Cleveland President Beth Hammack told CNBC that the central bank could raise rates as early as June if it sees clear evidence about the direction of the economy. Federal Reserve Governor Christopher Waller indicated he would consider supporting an interest rate reduction if steep tariffs begin negatively impacting employment.Trump is facing pressure to show progress on his trade agenda, with investors and business leaders expressing concern that the turmoil from the tariff announcement on April 2 could push the world economy into recession.
US-South Korea Near Trade Deal: Markets Set for Relief as Breakthrough Looms
Very positive news for markets and sentiment, the US and South Korea could reach a “compromise agreement” on trade as soon as next week, according to Treasury Secretary Scott Bessant. Treasury Secretary Scott Bessant suggested the U.S. and South Korea may finalize a trade compromise as early as next week. The most important agreement of our time is being reached. If it fails, the consequences will be enormous. If we get some sort of working arrangement, global leaders, economies, businesses, consumers and investors will all welcome it with a sigh of relief.
China Demands US Lift All Tariffs Before Trade Talks, Claims Stronger Economic Resilience
China has told the US it must ‘cancel all unilateral tariffs’ if it wants to negotiate. Today, China says it is better prepared to withstand US tariffs than it was during Trump’s first term, because its economy is less dependent on US technology and its trade partnerships are more diversified. Getting rid of the heavy reciprocal tariffs imposed on each other by the world’s top two economies will require a massive exercise in respectful engagement, without any public announcements and with a restraint on rhetoric against each other. The world is watching carefully to see if it goes ahead and what the outcome will be. Xi has said he is concerned that China’s young are not as willing to suffer for the good of the country as previous generations. China will resort to a range of responses, including fiscal stimulus, targeted subsidies for affected industries and even direct aid to laid-off workers. The imposed tariffs have forced Chinese manufacturers to reduce output and lay off workers.
Wall Street Warns of Trade War Fallout as Jane Street Posts Stellar $20.5B Revenue
Jane Street, which operates in equities, options and fixed-income markets, generated net trading revenue of $20.5 billion in 2024, up 94% from 2023. Corporate America puts Wall Street on alert over trade war damage Executives used earnings calls to explain cost and supply chain impacts from Donald Trump’s tariffs. The world’s largest sovereign wealth fund reported a $40 billion loss in the first quarter as the tech slump hit. The fund’s value peaked at 18.53 trillion kroner at the end of March, with 70% invested in equities – an asset class for which it posted a loss of 1.6%. Adverse currency movement also contributed to its losses.
Conclusion and disclaimer
The content on MarkShala.com is intended for educational and informational purposes only. We specialize in writing blogs on financial planning, investment strategies, economic trends, and related topics. While we strive to provide accurate and reliable information, the content should not be taken as professional financial, investment, or legal advice.
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