Key points
- Germany is expected to suffer most in Europe
- Tariffs could lead to 0.5pc reduction in France GDP: French Premier
- Japan’s Nikkei 225 rose by 6.41pc, Topix gained 6.81pc
ISLAMABAD: The tariffs introduced by the United States are set to severely impact the world economy, hindering its recovery and possibly leading to a historic third consecutive year of recession, analysts have warned.
Germany
As the largest trading partner of the US, Germany had a record trade surplus of 70 billion euros with America in 2024. Being a heavily export-dependent nation, it is expected to suffer the most in Europe from the trade conflict, according to Reuters.
Marc Schattenberg, senior economist at Deutsche Bank Research, stated that the risks for 2025 are skewed towards another year of recession.
German trade is likely to be affected in three ways: reduced exports to the US, diminished trade with China, and increased competition as new markets seek to replace goods previously sold to the US Carsten Brzeski, Global Head of Macro at ING, believes that Germany is facing the stark reality of a shifting global landscape and anticipates a contraction in 2025.
France
French Prime Minister François Bayrou warned that US President Donald Trump’s tariff policies could lead to a 0.5 per cent reduction in France’s GDP growth. “Trump’s policies could cost us more than 0.5% of our GDP.”
Britain
Economists suggest that Donald Trump’s preferential treatment of British exports could offer the country’s businesses a competitive edge, potentially shielding the UK from the worst effects of the ongoing trade war, according to Bloomberg.
Russia
Russia’s stock market continued its decline, as the Moscow Exchange (MOEX) Russia Index dropped by 3.91 per cent, marking its 14th consecutive day of losses.
Among the hardest-hit companies were En+ Group, the parent company of aluminium tycoon Oleg Deripaska’s Rusal, which saw a 9.76 per cent drop, and tech giant VK, which lost 8.28 per cent. State-owned Sovcomflot saw its shares fall by 8.22 per cent, according to The Moscow Times.
Ireland
Internal Government economic models suggest that Ireland could lose between 56,000 and 60,000 jobs due to US President Donald Trump’s tariff policies.
Reports from The Sunday Times also indicate that up to €6.9 billion worth of US imports to Ireland, including aircraft parts, may be targeted by retaliatory EU measures.
China
China has vowed to “fight to the end” against the fresh 50 per cent tariffs threatened by US President Donald Trump, escalating an already tense trade war that has caused significant losses in global markets.
Despite the dramatic market sell-off, Trump has refused to reconsider his aggressive trade stance, according to AFP.
Japan
Markets across the Asia-Pacific region rebounded on Tuesday following previous losses caused by US President Donald Trump’s tariff policies and the threat of even higher tariffs on China.
Japan’s Nikkei 225 rose by 6.41 per cent, while the Topix gained 6.81 per cent. South Korea’s Kospi increased by 1.7 per cent, and Hong Kong’s Hang Seng Index climbed by 2.25 per cent, after plummeting over 13 per cent the previous day, according to CNBC.
India
The Indian stock market was hit hard by US President Donald Trump’s announcement of sweeping tariffs, leading to a sharp 4 per cent drop in key indices, BSE Sensex and Nifty50, according to the Economic Times.
This followed fears of a global economic slowdown exacerbated by retaliatory tariffs imposed by China on US goods.
Pakistan
The Karachi Stock Exchange (KSE) saw a dramatic 6 per cent drop, or more than 7,200 points, on Monday, following a global market sell-off. Trading was suspended for 45 minutes due to the severe decline, according to CNBC.
Indonesia
Indonesia’s stock market fell by 9 per cent on Tuesday, prompting a 30-minute trading halt.
The Indonesian rupiah also dropped 1.8 per cent, reaching a record low, as markets reacted to the global turmoil caused by the US tariffs, according to The Times of India.
