<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="640" height="427" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2C7NN23EP5O6NASQ3FU6NFI3LE.jpg" alt="" class="wp-image-618594" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2C7NN23EP5O6NASQ3FU6NFI3LE.jpg 640w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2C7NN23EP5O6NASQ3FU6NFI3LE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/2C7NN23EP5O6NASQ3FU6NFI3LE-135x90.jpg 135w" sizes="auto, (max-width: 640px) 100vw, 640px" /><figcaption class="wp-element-caption">Delegates interact next to the logos of the BRICS summit during the 2023 BRICS Summit at the Sandton Convention Centre in Johannesburg, South Africa on August 23, 2023. GIANLUIGI GUERCIA/Pool via REUTERS/File Photo</figcaption></figure>



RIYADH/DUBAI, May 8 (Reuters)&nbsp;&#8211;&nbsp;Saudi Arabia has held off formally joining the BRICS bloc of nations despite attending a meeting in Brazil last week, two sources said, finessing an issue that could upset Washington as Riyadh seeks to seal deals with its U.S. ally.



The issue of BRICS membership has been diplomatically sensitive for Saudi Arabia since it was first invited to join in 2023, and remains so with President Donald Trump due to visit next week and Riyadh negotiating nuclear and technology deals.



BRICS, founded as a grouping of Brazil, Russia, India, China and South Africa to counter Western dominance of the world order, has grown in recent years to include emerging economies such as the United Arab Emirates, Egypt and Indonesia.



But while the BRICS website shows Saudi Arabia &#8211;&nbsp;the world&#8217;s largest oil exporter&nbsp;&#8211; as a member, it has yet to join, according to the two sources,&nbsp;both with direct knowledge of&nbsp;Saudi policy.



Saudi Arabia&#8217;s government communications office did not immediately respond to a request for comment.



Brazil&#8217;s foreign ministry referred Reuters to the Saudi government when asked about the kingdom&#8217;s listed status as a member on the website. Brazil is currently presiding over BRICS.



Riyadh does not want to risk U.S. anger as negotiations are underway&nbsp;with Washington, one of the sources and a diplomat said.



Saudi Arabia sent its deputy foreign minister to the April 29 meeting in Rio de Janeiro, where ministers from the fast-expanding bloc failed to agree a joint communique.



The kingdom&#8217;s ambivalence about BRICS membership lays bare its high-stakes balancing act between China, its biggest oil export customer, and Washington, its indispensable security and technology partner &#8211; a tightrope walk made ever more precarious by the deepening U.S.-Chinese divide.



&#8220;The Saudis still see tons of value in engaging with BRICS and its member states. They will keep double-dipping – or multi-dipping – with global partnerships as long as they can,&#8221; said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington.



&#8220;I think the Saudi calculation is that what they may be able to get out of the U.S. outweighs what they could get from BRICS membership, at least over the short term.”



In January, Trump demanded that BRICS commit to not creating a new currency or supporting another currency that would replace the U.S. dollar, or face 100% tariffs against BRICS nations.



SEEKING ALLIES



While the kingdom still favors its historic ally the United States, it is also seeking to nurture trade ties with China, the largest importer of Saudi crude.



In February, Saudi Arabia exported goods worth 15.2 billion riyals ($4.05 billion) to China, marking a 20.6% increase from a year earlier, when trade amounted to 12.6 billion riyals, data from the Observatory of Economic Complexity show. Over the past five years, trade has grown at an annualised rate of 50.3%.



Total Chinese investment and construction contracts in Saudi Arabia between 2005 and mid-2024 reached nearly $71 billion, according to the China Global Investment Tracker, reflecting Beijing’s growing role in the kingdom’s economic transformation.



The Saudi partnership with the United States remains central to its security, investment and technology ambitions, even as it expands relations with rival powers like China and Russia.



The U.S. is poised to offer Saudi Arabia an arms package worth well over $100 billion, sources told Reuters last month, saying the proposal was being lined up for announcement during Trump&#8217;s visit.



BRICS has sought to shift away from the dollar into other currencies. But a study by the Atlantic Council&#8217;s GeoEconomics Center last year showed the greenback remains the world&#8217;s primary reserve currency, and neither the euro nor the BRICS countries have managed to reduce global reliance on the dollar.



&#8220;While BRICS is a useful forum for airing grievances over American behaviour, it is not yet a body coherent enough to provide public goods on key issues like currency cooperation, security, or economic integration,&#8221; said Steffen Hertog, associate professor in comparative politics at the London School of Economics.



&#8220;Saudi feels like they have the leverage and they are enjoying the position,&#8221; said Saudi analyst Aziz Alghashian.



&#8220;They see it that the United States is still the main actor, but there are others that could also provide utility,&#8221; he added.



($1 = 3.7509 riyals)



(Reporting by Pesha Magid in Riyad, Maha El Dahan and Manya Saini in Dubai; additional reporting by Lisandra Paraguassu in Brasilia; editing by Tom Perry and Mark Heinrich)

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Saudi Arabia sits on fence over BRICS with eye on vital ties with US

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="640" height="439" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/ZI3EKD2GHJPOPFODI5AQ4SXDWQ.jpg" alt="" class="wp-image-618575" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/ZI3EKD2GHJPOPFODI5AQ4SXDWQ.jpg 640w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/ZI3EKD2GHJPOPFODI5AQ4SXDWQ-300x206.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/ZI3EKD2GHJPOPFODI5AQ4SXDWQ-131x90.jpg 131w" sizes="auto, (max-width: 640px) 100vw, 640px" /><figcaption class="wp-element-caption">A general view of Heidelberg Materials cement plant at Kattameya district in Cairo, Egypt September 4, 2023. REUTERS/Shokry Hussien/File Photo</figcaption></figure>



FRANKFURT, May 8 (Reuters)&nbsp;&#8211;&nbsp;Heidelberg Materials&nbsp;HEIG.DE, the world&#8217;s second-biggest cement maker, on Thursday reported forecast-beating first-quarter sales and profits and confirmed its outlook, citing strong growth in Africa.



The company&#8217;s first-quarter result from current operations&nbsp;(RCO)&nbsp;rose by 1.3% to 235 million euros ($266 million), beating the 207 million average forecast in a poll provided by the group.



&#8220;Despite the political and economic uncertainties as well as difficult weather conditions in some regions, we got off to a very good start to the 2025 financial year,&#8221; CEO Dominik von Achten said.



Larger peer Holcim HOLN.S late last month also cited strong business in North Africa as one of the drivers behind better-than-expected first-quarter profits.



Heidelberg Materials said it still expects RCO in 2025 of 3.25 billion to 3.55 billion euros, compared with a 3.44 billion consensus estimate.



The company&#8217;s RCO in North America, a region that accounted for more than a fifth of the group&#8217;s first-quarter sales, was down by nearly two thirds, it said.



($1 = 0.8830 euros)



(Reporting by Christoph Steitz; Editing by Thomas Seythal)

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Heidelberg Materials beats Q1 expectations on strong Africa business

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141930-1746576795059-gettyimages-2212645664-157a1115_rmsbs6qi-820x462.png" alt="" class="wp-image-618152" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141930-1746576795059-gettyimages-2212645664-157a1115_rmsbs6qi-820x462.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141930-1746576795059-gettyimages-2212645664-157a1115_rmsbs6qi-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141930-1746576795059-gettyimages-2212645664-157a1115_rmsbs6qi-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141930-1746576795059-gettyimages-2212645664-157a1115_rmsbs6qi-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141930-1746576795059-gettyimages-2212645664-157a1115_rmsbs6qi.png 1480w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. President Donald Trump speaks during a rally at Macomb Community College on April 29, 2025, at Warren, Michigan, U.S. Scott Olson | Getty Images News | Getty Images</figcaption></figure>



After U.S. President Donald Trump shattered — or at least fractured — global trade relationships and supply chains, there are promising signs of reconstruction in recent days. Indeed, U.S. Treasury Secretary Scott Bessent told CNBC on Monday the country is “very close to some deals.”



On Tuesday, newly elected Canadian Prime Minister Mark Carney met Trump at the White House, potentially resetting a bilateral relationship that has been strained since January. And Chinese Vice Premier He Lifeng is scheduled to meet Bessent in Switzerland&nbsp;this week for trade talks.



But enter the hurricane that is Trump, again. “We don’t have to sign deals, they have to sign deals with us. They want a piece of our market. We don’t want a piece of their market,” Trump said during his meeting with Carney, contradicting top White House officials’ claim for weeks that such deals are the administration’s top priority. Markets fell after his comments.



The growing protectionism of the U.S., ironically may help other countries forge closer economic ties with each other. The U.K. and India agreed on a bilateral trade agreement that will remove tariffs on most items within a decade. Meanwhile, ASEAN and China are set to meet on May 19 to negotiate improvements to a free-trade agreement, according to Malaysian Prime Minister Anwar Ibrahim on Monday.



They may be new bridges being built in the aftermath of Trump tariffs. But those connections could bypass the U.S. — which, according to Trump, does not need deals anyway.



<h2 class="wp-block-heading" id="h-what-you-need-to-know-today"><a></a>What you need to know today</h2>



Officials from U.S. and China to meet U.S. Treasury Secretary Scott Bessent and trade representative Jamieson Greer will meet with their Chinese counterparts in Switzerland this week to discuss economic and trade matters, their offices announced Tuesday. Later in the day, the Chinese Foreign Ministry said that Vice Premier He Lifeng, Beijing’s top official for China-U.S. economic and trade matters, will meet with Bessent in Switzerland, NBC News reported.



The UK and India reach a trade agreement The United Kingdom and India struck a bilateral trade agreement Tuesday, under which a majority of goods traded between India and the U.K. will become “fully tariff-free within a decade,” according to the British government. India will begin slashing tariffs on key U.K. exports such as whisky and automotives, while the U.K. will remove all tariffs on 99.1% of imports once the agreement comes into force, the Indian government said.



Markets fall on Trump’s trade comments U.S. stocks fell Tuesday after Trump gave belligerent comments on trade deals. The S&amp;P 500 declined 0.77%, the Dow Jones Industrial Average lost 0.95% and the Nasdaq Composite retreated 0.87%. Europe’s regional Stoxx 600 index dropped 0.18%, ending its 10-day winning streak. Shares of Deliveroo rose 1.9% after the British food delivery company said it had agreed to a takeover offer from American rival DoorDash that values the company at £2.9 billion ($3.9 billion).



AMD beats earnings estimates, warns of chip controls Advanced Micro Devices on Tuesday reported earnings for its first fiscal quarter that topped expectations and gave strong guidance for the current quarter. The forecast includes $800 billion in costs because of U.S. export limits on artificial intelligence chips. On a related note, Nvidia CEO Jensen Huang said Tuesday that China’s artificial intelligence market will likely reach about $50 billion in the next two to three years, and that missing out on it would be a “tremendous loss.”



India says it carried out strikes on Pakistan India early Wednesday said its armed forces had conducted strikes against Pakistan and what it calls Pakistan-occupied Jammu and Kashmir, targeting “terrorist infrastructure.” The operation follows a militant attack in Pahalgam, Jammu and Kashmir, in which 26 people were killed last month and targeted nine sites, the statement said.



U.S. “not a good place to hide”: JPMorgan U.S. exceptionalism — in which the American economy and financial market have outperformed those of other countries since the pandemic — might be a thing of the past. This time, the U.S. “is not a good place to hide” if global economic growth slows down, wrote JPMorgan strategist Mislav Matejka in a note on Tuesday.



<h2 class="wp-block-heading" id="h-and-finally"><a></a>And finally&#8230;</h2>



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268.jpeg?v=1746576676&amp;w=1858&amp;h=1045&amp;vtcrop=y" alt="QINGDAO, CHINA - APRIL 16 2025: A empty container ship of COSCO Shipping sails to a container terminal in Qingdao in east China's Shandong province Wednesday, April 16, 2025. (Photo credit should read YU FANGPING / Feature China/Future Publishing via Getty Images)"/><figcaption class="wp-element-caption">An empty container ship of COSCO Shipping sails to a container terminal in Qingdao in east China’s Shandong province Wednesday, April 16, 2025. Feature China | Future Publishing | Getty Images</figcaption></figure>



Trump trade tariffs slump widens to ‘nearly all U.S. exports,’ supply chain data shows



What began as a rapid drop in U.S. imports as shippers cut orders from manufacturing partners around the world has now extended into a nationwide export slump, with the U.S. agricultural sector and top farm products including soybeans, corn and beef taking the hardest hit.



The latest trade data shows that a slide in U.S. exports to the world, and China in particular, that began in January now extends to most U.S. ports. The Port of Portland, Oregon, tops the list with a 51% decrease in exports, while the Port of Tacoma, Washington, a large agricultural export port, has seen a 28% decrease.



The data is from trade tracker Vizion, which analyzed U.S. export container bookings for the five-week period before U.S. President&nbsp;Donald Trump’s tariffs began and the five weeks after the tariffs took effect.

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Trump says the U.S. doesn’t need a trade deal — the UK and India have made one without it

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-820x547.jpeg" alt="" class="wp-image-617851" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108141436-1746527456123-gettyimages-2209953584-ECP_fc1252268-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An empty container ship of COSCO Shipping sails to a container terminal in Qingdao in east China’s Shandong province Wednesday, April 16, 2025. Feature China | Future Publishing | Getty Images</figcaption></figure>



What began as a rapid drop in U.S. imports as shippers cut orders from manufacturing partners around the world has now extended into a nationwide export slump, with the U.S. agricultural sector and top farm products including soybeans, corn, and beef taking the hardest hit.



The latest trade data shows that a slide in U.S. exports to the world, and China in particular, that began in January now extends to most U.S. ports, according to trade tracker Vizion, which analyzed U.S. export container bookings for the five-week period before the tariffs began and the five weeks after the tariffs took effect.



The farming sector has been warning of a “crisis” and ports data is showing more evidence of lack of ability to move product out to global markets. Port of Oregon tops the list with a 51% decrease in exports, while Port of Tacoma, a large agricultural export port, has seen a 28% decrease. The port’s top destinations for corn, soybeans, and other ag exports include Japan, China, and South Korea. 



Some ports have only seen a small exports decrease to date, such as the Port of Houston and Port of Seattle, at 3% and 3.5%, respectively. But what is clear, according to Ben Tracy, vice president of strategic business development at Vizion, “is that nearly all of U.S. exports have taken a hit.”


<div class="wp-block-image">
<figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="658" height="746" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph.png" alt="" class="wp-image-617848" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph.png 658w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-265x300.png 265w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-79x90.png 79w" sizes="auto, (max-width: 658px) 100vw, 658px" /></figure></div>


The trade data shows declines of over 17% at the Port of Los Angeles, while the Port of Savannah — the top U.S. port for exporting containerized agricultural goods in 2025 — is down 13%, and the Port of Norfolk is down 12%, according to Vizion.



The&nbsp;Port of Oakland&nbsp;also plays a significant role in exports as the leading port for international refrigerated goods.&nbsp;U.S. agricultural exports also leave Los Angeles, Long Beach, New York/New Jersey, Houston, and Seattle/Tacoma.&nbsp;



The slide in exports is linked to the decline in containerships coming to the U.S., as businesses across the economy cancel manufacturing orders, sending Chinese factories and freight ships into retreat, as well as changes in global demand linked to U.S. trade policy. U.S. imports continue to decline, with port data tracked by Vizion showing a 43% week-over-week drop in containers from the week of April 21 to the week of April 28.



“We haven’t seen anything like this since the disruptions of summer 2020,” said Kyle Henderson, CEO of Vizion. “That means goods expected to arrive in the next six to eight weeks simply won’t. With tariffs driving costs higher, small businesses are pausing orders. Products that once moved reliably are now twice as expensive, forcing importers into tough decisions,” he said.



<h3 class="wp-block-heading" id="h-lean-retail-inventories-ahead">‘Lean’ retail inventories ahead</h3>



Retailers have been urging consumers to buy sooner rather than later, and data from Bank of America Global Research suggests why that may be the right move. Its latest forecast shows that the number of inbound container ships to the Port of Los Angeles will see a sharp drop in May, with escalating trade disruptions leading to a 15%-20% decrease in U.S. container imports from Asia in the coming weeks.



In a note to clients, Bank of America warned that the ratio of retail inventories to monthly sales was not especially high, while at the same time, consumers have been buying ahead on expectations of higher prices and lack of product choice.



Based on data Bank of America reviewed on retail payments to transportation and shipping companies, there has been no big ramp in inventories after the frontloading that occurred earlier this year, and supply disruptions may be looming.



“We think it is possible retail inventories may actually look ‘lean’ in coming months,” the Bank of America report stated.



Many retailers only have one to two months of sales in inventory, it found, and any unforeseen demand or supply disruptions can quickly impact what goods retailers can offer and the prices charged, it concluded.


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<figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="815" height="571" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-2.png" alt="" class="wp-image-617849" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-2.png 815w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-2-300x210.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-2-128x90.png 128w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/Cnbc-International-Graph-2-768x538.png 768w" sizes="auto, (max-width: 815px) 100vw, 815px" /></figure></div>


It is a pivotal time of the year for the holiday shopping season, when orders are typically being placed. The supply chain’s tipping point — where holiday success is either locked in or left to chance — is June.



“Retailers that lock capacity now, especially in fast‑moving sectors like toys, consumer electronics, and fashion, give themselves the runway to fine‑tune assortments later without racing the clock,” said Tim Robertson, CEO of DHL Global Forwarding. “It isn’t about pushing extra volume; it’s about sequencing the flow — balancing ocean, air and intermodal options, building buffers for labor or weather‑related surprises, and using real‑time data to pivot if demand shifts,” he said. “The brands that treat June as a strategic deadline, rather than a last‑minute scramble, will be the ones filling shelves, not chasing them when consumers start shopping in November,” he added.



Captain Kipling Louttit,&nbsp;executive director of the Marine Exchange of Southern California, warned in a recent statement that the decrease in vessel arrivals and lighter container volumes coming to the U.S. will translate into excess capacity of labor, trucks, trains, and others in supply chain who “will be out of work because of the decline in cargo arrivals.”



Only 14 ships arrived in the most recent three-day period tracked, Louttit noted, and only 10 are scheduled to arrive over the next three days. A “normal” level of activity in a three-day period would be 17 ships.


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Hawaii-based freight liner operator and shipowner Matson lowered its 2025 outlook on Monday, citing tariffs, global trade regulatory measures, the trajectory of the U.S. economy and other geopolitical issues.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



Matson, which offers an expedited service from China to Long Beach, California, reported that since the tariffs were implemented in April, container volume for the company has declined approximately 30% year over year.



“Coupled with limited visibility to our container demand, we expect container volume and average rates in the second quarter to be lower year over year,” said Matt Cox, Matson CEO, on its earnings call. “At the moment, it’s difficult to know if these lower volume levels are transitory or will persist for a longer time in 2025 and the duration of this lower demand period will likely depend on active negotiations taking place across the supply chain, and the timing of potential amendments to the tariffs,” he said.&nbsp;



Cox said the company is working with Asia transshipment partners as its customers look at options to diversify and grow their manufacturing locations. “Many of our customers moved to a ‘China plus one’ strategy a few years ago to diversify their operations, and we expect this trend to continue,” he said. “We will continue to follow our customers as they reposition and expand their manufacturing footprint in response to changing tariffs as part of our ‘catchment basin’ strategy in Asia,” Cox added.

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Trump trade tariffs slump widens to ‘nearly all U.S. exports,’ supply chain data shows

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108097078-17386832482025-02-04t144526z_1865597391_rc20l9alc6ia_rtrmadp_0_usa-trump-tariffs-ecommerce-820x410.jpeg" alt="" class="wp-image-617752" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108097078-17386832482025-02-04t144526z_1865597391_rc20l9alc6ia_rtrmadp_0_usa-trump-tariffs-ecommerce-820x410.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108097078-17386832482025-02-04t144526z_1865597391_rc20l9alc6ia_rtrmadp_0_usa-trump-tariffs-ecommerce-300x150.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108097078-17386832482025-02-04t144526z_1865597391_rc20l9alc6ia_rtrmadp_0_usa-trump-tariffs-ecommerce-160x80.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108097078-17386832482025-02-04t144526z_1865597391_rc20l9alc6ia_rtrmadp_0_usa-trump-tariffs-ecommerce-768x384.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/05/108097078-17386832482025-02-04t144526z_1865597391_rc20l9alc6ia_rtrmadp_0_usa-trump-tariffs-ecommerce.jpeg 884w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



The closure of a trade loophole and prohibitive tariffs on China have upended Temu and Shein’s business model in the United States. And yet the e-commerce companies are likely to remain a dominant force in American online retailing, experts suggest.&nbsp;&nbsp;



On Friday, the de minimis rule — a policy that had exempted U.S. imports worth $800 from trade tariffs — officially closed for shipments from China. This has seen Temu and Shein exposed to duties as high as 120% or a flat fee of $100, set to rise to $200 in June.



The small-package tariff exemption had been key to the companies’ ability to maintain budget prices on the merchandise they ship from China. Now that it’s gone, prices on Temu and Shein have been surging, with the former ending direct shipments from outside the U.S. altogether. 



The change will be welcomed by many detractors of de minimis, among them U.S. lawmakers, labor unions and retailers, who have argued that Temu and Shein abused the exemption to undercut local businesses and flood the country with illicit and counterfeit products. 



But despite the new trade challenges that&nbsp;Temu and Shein face,&nbsp;e-commerce and supply chain experts told CNBC that the companies are still capable of competing with their rivals in the U.S.&nbsp;



“Don’t count them out &#8230; Not at all. These kinds of Chinese e-commerce apps are very adept and agile. They have contingency plans in place and have taken the necessary steps to cover the tariffs from a margin perspective,” said Deborah Weinswig, CEO and founder of Coresight Research.



“I personally believe, if anything, [America’s e-commerce] game has been accelerating in favor of Temu and Shein &#8230; I wouldn’t be surprised if the competitiveness gap actually continues to widen,” added Weinswig, whose research and advisory firm works with clients across tech, retail and supply chains.



<h2 class="wp-block-heading" id="h-contingencies-in-place-nbsp"><a></a>Contingencies in place&nbsp;</h2>



The loss of the de minimis exemption had long been anticipated, with U.S. President Donald Trump temporarily closing it in February. In preparation, Temu and Shein had been accelerating localization strategies for the U.S.



Scott Miller, CEO of e-commerce consulting firm pdPlus, told CNBC that Shein and Temu will continue to onboard goods from American sellers onto their apps to protect them from tariffs.&nbsp;



“Many of the current sellers on Temu and Shein are located in China or countries nearby, but not all. Local U.S. companies have been joining these platforms at an accelerating pace &#8230; several of our clients have onboarded or began the process of onboarding in just the past few months,” he said.&nbsp;



While margins for more localized brands and sellers will be lower on the platforms than those shipping directly from China, they can be competitive, according to Miller.



He added that in the case of Temu, vendors are attracted to lower fees, lighter competition and greater assistance with onboarding and setting up sales channels compared with what Amazon offers.&nbsp;



In recent days, Temu, which is owned by Chinese e-commerce giant PDD Holdings, has begun exclusively offering goods shipped from local warehouses to U.S. shoppers.



Many of those goods are still sourced from China but then shipped in bulk to U.S. warehouses, according to experts. While these bulk items are subject to tariffs, they also benefit from economies of scale.&nbsp;



This development is likely to see the variety of products on Temu scaled back, said Henry Jin, an associate professor of supply chain management at Miami University. However, he added, Temu is likely to resume direct shipments from China, depending on the outcome of the trade war between Washington and Beijing.&nbsp;



Shein, meanwhile, has leaned into supply chain expansion, building manufacturing operations in countries such as Turkey, Mexico and Brazil, and reportedly plans to shift to Vietnam.



The company appears to still be shipping directly from China and likely has more room to absorb tariffs because of its “sky-high” margins in its core fast-fashion business, Jin said.



“If there’s one thing that Chinese companies are good at, it’s operating on a razor thin margin in an intensely competitive, if not adverse environment &#8230; they find every scrap that they can to survive,” he added.



<h2 class="wp-block-heading"><a></a>Competitive prices?</h2>



Contingency plans aside, experts agree that Trump’s trade policy will continue to affect prices on Temu and Shein. The companies first announced they were raising prices in mid-April to counter tariffs.



According to data from Coresight, prices across shopping categories on Shein rose between 5% and 50% in the latter half of April, with the sharpest rises seen in toys and games and beauty and health.&nbsp;



However, many e-commerce experts remain confident that Temu and Shein will continue to prove price-competitive.&nbsp;



Coresight’s Weinswig said the two companies have previously been able to offer products at a third of the prices on Amazon for comparable goods. So, even if they more than double the prices to absorb the impacts of tariffs, many goods could remain cheaper than those on American e-commerce sites and retailers.&nbsp;



Jason Wong, who works in product logistics for Temu in Hong Kong, noted this dynamic when speaking to CNBC last month, likening Temu to a dollar store. If prices at the dollar store go from $1 to $2, it’s still a dollar store, he said.&nbsp;



Furthermore, Trump’s trade tariffs on China and other trade partners have also affected American retailers and e-commerce sites like Amazon. 



<h2 class="wp-block-heading"><a></a>Other advantages</h2>



When Forever 21 filed for bankruptcy protection earlier this year, it blamed Shein and Temu’s use of the de minimis exemption, which it said “undercut” its business.&nbsp;



But experts say that exclusively attributing the success of Shein and Temu to that trade loophole misses many of the other factors that have made them smash hits in the U.S.



According to Anand Kumar, associate director of research at Coresight Research, Temu and Shein owe a lot of their success to their very agile supply chains that adapt fast to consumer trends.&nbsp;



For example, Shein’s small-batch production — in which product styles are initially launched in limited quantities, typically around 100-200 items — allows it to test and scale products efficiently.&nbsp;



Another key is the companies’ applications, which use various strategies to maintain user interest, including frequent phone notifications, product recommendation algorithms and perhaps most notably, constantly displaying discounted prices from promotions and flash sales.&nbsp;



Temu was offering a “mega savings extravaganza” for American consumers on Monday. Some of the bestselling items on sale included stainless steel hook earrings for $1.45 and a fitted mattress pad for $11.54. It’s unclear if the discounted local goods were stockpiled before tariffs came into effect.&nbsp;



In addition, app users will often be met with mini-games that grant different coupons or ways to earn rewards, as well as opportunities to buy “mystery boxes” with assorted products.



That “gamification strategy” definitely plays into the consumer psychology of many U.S. shoppers who often buy items out of the excitement of being able to get a great deal, said Miami University’s Jin.&nbsp;



Experts also flagged that Temu and Shein have been very effective at marketing, including through the harnessing of livestreaming and social media. 



On the other hand, according to Coresights’ Weinswig, American retailers have failed to adequately recognize threats from Temu and Shein and adjust their supply chains and pricing models.

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Temu and Shein face massive tariffs. But don’t count them out of the U.S. e-tail scene, experts say

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="640" height="402" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/05/6T7ZIBA6PZNMFHKYUGN6RFCHGE.avif" alt="" class="wp-image-616332"/><figcaption class="wp-element-caption">The logo of Deutsche Bank is seen in Brussels, Belgium December 6, 2022. REUTERS/Yves Herman/File Photo</figcaption></figure>



May 2 (Reuters)&nbsp;&#8211;&nbsp;Difficult economic conditions and persistently weak demand for many products have forced companies across Europe to freeze hiring or cut jobs.



Here are some of the layoffs announced since the beginning of March:



CAR AND CAR PARTS MAKERS



* PORSCHE P911_p.DE: The German automaker will cut 2,000 jobs on top of the 1,900 already announced, and will negotiate with unions further cuts in the second half of the year, it said on March 12.



* RENAULT RENA.PA: The French carmaker said on March 11 it would cut 300 jobs at its van factory in Sandouville in response to slowing demand for commercial vehicles in Europe.



*STELLANTIS STLAM.MI: The group said on April 3 it would temporarily lay off 900 workers at five U.S. facilities in response to the Trump administration&#8217;s tariff announcement.



On April 2, the Fiom union said Stellantis had agreed with trade unions 350 job cuts at its plants in southern Italy as part of its long-term production plan.



* VOLKSWAGEN VOWG_p.DE: The German carmaker&#8217;s CFO said on April 30 it had cut headcount in Germany by around 7,000 since starting cost savings in late 2023.



Audi, which belongs to Volkswagen, said on March 18 it would cut up to 7,500 jobs in Germany by 2029 in areas, such as administration and development.



* VOLVO VOLVb.ST: The Swedish truck maker planned to lay off as many as 800 workers at three U.S. facilities over the next three months due to tariff-driven market uncertainty and demand concerns, a spokesperson said on April 18.



BANKS



* DEUTSCHE BANK DBKGn.DE: Germany&#8217;s largest bank will cut its retail bank&#8217;s workforce by almost 2,000 people in 2025, with a &#8220;significant&#8221; reduction in the number of branches, its CEO said on March 19.



* SANTANDER UK SANS_pa.L: The British arm of Spain&#8217;s Banco Santander SAN.MC said on March 19 that fresh branch closures in Britain meant around 750 staff could lose their jobs.



* UBS UBSG.S: Switzerland&#8217;s largest bank informed unions in Italy on April 1 of plans to cut 180 jobs in the country, around a third of the total, documents reviewed by Reuters showed.



INDUSTRIALS AND ENGINEERING



* SIEMENS SIEGn.DE: The German engineering group said on March 18 it would cut 5,600 jobs at its Digital Industries business as it adapts to weak market conditions in Germany and China.



* STMICRO SMPA.PA: The French-Italian chipmaker said on April 30 it would cut around 1,000 jobs in France, more than a third of the 2,800 layoffs planned in its cost-cutting program.



* THYSSENKRUPP TKAG.DE: The German conglomerate plans to cut around 1,800 jobs due to the prolonged weakness in the car sector it supplies, it said on March 6.



RETAIL AND CONSUMER GOODS



*LVMH LVMH.PA: Financial Times reported on May 1, citing an internal video, that the French luxury group&#8217;s wine and spirit unit Moet Hennessy would cut its workforce by about 1,200 employees.



* MORRISONS: The British supermarket said on March 24 that about 365 employees could lose their jobs as part of a reduction of store operations aimed at offsetting what it called &#8220;significant cost increases&#8221;.



* NESTLE NESN.S: The world&#8217;s largest packaged food company said on March 20 it would divest two factories in Germany, impacting about 225 jobs, citing overcapacity.



* PUMA PUMG.DE: The German sportswear maker will cut 500 jobs worldwide as part of a cost-reduction programme, it said on March 12.



OTHERS



* BIONTECH 22UAy.DE: The German COVID-19 vaccine maker said on March 10 it planned to cut between 950 and 1,350 full-time positions by 2027, including at its late-stage mRNA manufacturing site in Marburg, Germany and at research operations in Europe and North America.



* DHL&nbsp;DHLn.DE: The German logistics group announced on March 6 plans to cut about 8,000 jobs in Germany to save more than 1 billion euros ($1.15 billion).



* UPM UPM.HE: The Finnish forestry company said on March 11 it would permanently close a paper mill in Germany and implement cost-cutting measures that will impact 462 jobs, citing a changing market and overcapacity.



Sources: Regulatory filings, Reuters reporting and company websites



($1 = 0.8696 euros)



(Compiled by Boleslaw Lasocki and Bernadette Hogg in Gdansk; Edited by Milla Nissi and Tomasz Janowski)

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FACTBOX-European companies cut jobs in response to slowing economy

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1080" height="720" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AWIZDBZH5VO2XJX7G2VI2D5PBI.avif" alt="" class="wp-image-615478"/><figcaption class="wp-element-caption">Ragui El-Etreby, Assistant Minister for Multilateral International and Regional Economic Affairs of Egypt, UAE Deputy Prime Minister and Minister of Interior and Reem bint Ebrahim Al Hashimy , Russian Foreign Minister Sergei Lavrov , Ethiopian Foreign Minister Gedion Timothewos, Brazilian Foreign Minister Mauro Vieira, Chinese Foreign Minister Wang Yi, Indonesian Foreign Minister Sugiono, South African Minister of International Relations and Cooperation Ronald Lamola, Iranian Deputy Foreign Minister on Economic Diplomacy, Seyed Rasoul Mohajer and Ambassador Dammu Ravi pose for a family picture, on the day of the BRICS Meeting of Ministers of Foreign Affairs in Rio de Janeiro, Brazil, April 28, 2025. REUTERS/Pilar Olivares</figcaption></figure>



RIO DE JANEIRO, April 29 (Reuters)&nbsp;&#8211;&nbsp;Foreign ministers from the BRICS group of developing nations failed to agree on a joint communique on Tuesday, highlighting differences within the fast-growing diplomatic bloc,&nbsp;while&nbsp;the chair Brazil issued a statement condemning trade protectionism.



In the statement, Brazil said the group&#8217;s foreign ministers expressed &#8220;serious concern at the prospect of a fragmented global economy and the weakening of multilateralism&#8221; at their gathering in Rio de Janeiro.



The statement did not name the United States, which has taken a sharp protectionist shift under President Donald Trump, whose unilateral tariffs have raised concerns about a global economic slowdown.



The failure to reach a joint declaration was unexpected, a diplomatic source said, adding that there was room to iron out differences before July, when BRICS leaders will gather in Rio.



The expanded BRICS group, which includes Brazil, Russia, India, China and South Africa as well as new joiners Egypt, Saudi Arabia, the United Arab Emirates, Ethiopia, Indonesia and Iran, faces daunting challenges from U.S. trade actions.



&#8220;The ministers voiced serious concerns about the rise of unjustified unilateral protectionist measures inconsistent with WTO rules, including indiscriminate raising of reciprocal tariffs and non-tariff measures,&#8221; the statement said.



The statement reflected a broad consensus among the 11 countries, although a person involved in the negotiations said China &#8211; affected by 145% levies in the trade war with the U.S. &#8211; had pushed for a harsher tone.



&#8220;There was a consensus among all the countries, which is expressed in the declaration,&#8221; said Brazilian Foreign Relations Minister Mauro Vieira.



Still, the final declaration was a &#8220;chair statement,&#8221; falling short of a joint statement as the countries could not reach an agreement on all issues. Egypt and Ethiopia refused to accept some of the language calling for reform of the United Nations, including its Security Council, a longstanding aspiration of Brazil, India and South Africa.



That difference underscores the group&#8217;s new composition&nbsp;after&nbsp;new&nbsp;members that have&nbsp;competing views on some issues&nbsp;joined in 2024. The&nbsp;diplomatic source told Reuters that the new African members took issue with putting forward South Africa as a preferred BRICS candidate for a reformed Security Council.



&#8220;The expansion has its costs. Of course we have to work more to reach a consensus. But, at the same time, an expanded group has more power, more resources, more space for cooperation,&#8221; said the source.



Brazilian diplomats stressed the importance of a strong shared position on the central issue of &#8220;unjustified&#8221; trade barriers condemned in the declaration, which cited tariffs and non-tariff measures, such as the abuse of green policies for protectionist purposes.



&#8220;The main&nbsp;thing for BRICS is to ensure that the multilateral trade system doesn&#8217;t fall apart completely&#8221;, a diplomat told Reuters.



(Reporting by Lisandra Paraguassu; Additional reporting and writing by Andre Romani; Editing by Brad Haynes, Gabriel Araujo and Nia Williams)

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Growing BRICS group shows internal rifts as ministers fall short of joint statement

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-820x547.jpg" alt="" class="wp-image-427449" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/09/GettyImages-1258640786-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Bill Gates, co-chairman of the Bill and Melinda Gates Foundation, during the EEI 2023 event in Austin, Texas, US, on Monday, June 12, 2023. The event aims to address the major challenges and opportunities facing electric companies today. Photographer: Jordan Vonderhaar/Bloomberg via Getty Images</figcaption></figure>



April 29 (Reuters)&nbsp;&#8211;&nbsp;A group of philanthropies including the Gates Foundation has set up a fund backed with nearly $500 million to help save the lives of newborn babies and mothers in sub-Saharan Africa, standing out against a bleak global health funding landscape.



The Beginnings Fund was launched on Tuesday in Abu Dhabi, the home of another key backer &#8211; the United Arab Emirates&#8217; recently established Mohamed Bin Zayed Foundation for Humanity.



The project has been in the works for at least a year. But its role has become more important as governments worldwide follow the U.S. in&nbsp;pulling back from international aid, its chief executive Alice Kang’ethe told Reuters in an interview.



“It is an opportune moment,” she said earlier this month, stressing that the fund aimed to work alongside African governments, experts and organizations rather than parachuting in experts or technologies, an approach she said differed from many traditional donor programmes.



The Beginnings Fund aims to save the lives of 300,000 mothers and newborn babies by 2030, and expand quality care for 34 million mothers and babies.



The partners also pledged $100 million in direct investments in maternal and child health, separate to the fund.



It plans to operate in Ethiopia, Ghana, Kenya, Malawi, Lesotho, Nigeria, Rwanda, Tanzania, Uganda, and Zimbabwe, focusing on low-cost interventions and personnel in high-burden hospitals. The work will track and target the key reasons babies and mothers die, including infection, severe bleeding for mothers, and respiratory distress for infants.



The world has made major progress in reducing newborn and maternal deaths, halving the neonatal mortality rate between 1990 and 2022. But that&nbsp;progress has stagnated or even reversed&nbsp;in nearly all regions in the last few years, according to the World Health Organization, which has warned that aid cuts could&nbsp;make this worse.



“Mothers and newborns should not be dying from causes we know how to prevent,” said Dr. Mekdes Daba, minister of health for Ethiopia, stressing that the majority of deaths are avoidable.



Kang’ethe said the Beginnings Fund, like other philanthropies, was getting calls to fill gaps in global aid funding, but remained focused on its long-term aim of changing the trajectory of mother and newborn survival.



The fund is also backed by the Children’s Investment Fund Foundation, Delta Philanthropies and the ELMA Foundation, among others. It will be led from Nairobi, Kenya.

GettyImages-1258640786-1

Gates, others launch $500 million maternal, newborn health fund, bucking aid cuts trend

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Emerging markets have found themselves between a rock and a hard place amid an escalating trade war, seemingly forced to choose between China and the U.S. But there’s another way: they’re backing themselves.



“Southeast Asian countries, including Malaysia, have to negotiate with the U.S. to come up with some sort of a soft-landing spot,” Ong Kian Ming, Malaysia’s former deputy minister of international trade and industry, told CNBC. “But at the same time, it doesn’t prevent us from working with other countries — not to screw the U.S., but to benefit ourselves.”



Southeast Asia is particularly vulnerable to an escalating global trade war. Goldman Sachs has cut its growth forecasts for Asian emerging markets, saying smaller export-oriented economies are the most exposed to the tariff turmoil.&nbsp;



The bank’s 2025 GDP forecast for Vietnam is now 5.3% — significantly lower than consensus estimates of 6.5% cited by Goldman. The bank expects Malaysia to grow by 3.8% (compared to 4.7%) next year, and Thailand to expand by 1.5% (compared to 2.7%).



Southeast Asian nations were among the hardest hit on U.S. President Donald Trump’s self-declared “Liberation Day.” They’re due to be hit with tariffs of up to 49% after a 90-day temporary reduction to 10% on all countries (bar China) is lifted.



It means the region faces a difficult balancing act as the U.S. is not its only strategic partner — China also plays a crucial role for medium-term growth and development objectives for many emerging Asian economies, according to Lavanya Venkateswaran, senior ASEAN economist at the OCBC Bank.&nbsp;



Chinese President Xi Jinping visited Vietnam, Malaysia and Cambodia earlier this month in an effort to promote Beijing as a pillar of stability and boost ties within the region. He also called on the Global South “to uphold the common interests of developing countries.”



And it appears to be happening.



UN Trade and Development (UNCTAD) Secretary-General Rebeca Grynspan told CNBC’s Squawk Box this month that intra-regional trade is growing.



“One interesting indicator that we have from the last year, in this century, is that South-South trade has already been growing faster than North-North trade,” she said. “So the acceleration of South-South trade, I think, will take a new dynamism because of the new trade policy of the U.S.”



Anwar Ibrahim, Malaysian prime minister and current rotating chair of ASEAN, echoed this sentiment, calling for more trade and greater economic integration within the region in a keynote speech at the ASEAN Investment Summit in early April.



<h2 class="wp-block-heading" id="h-no-easy-solutions-nbsp"><a></a>No easy solutions&nbsp;</h2>



While there are no “easy solutions,” emerging economies are expected to try different approaches in a bid to mitigate the impact of U.S. tariffs, according to Lavanya Venkateswaran,&nbsp;an economist at OCBC.



“In the near-term, the authorities will have to tap fiscal and monetary policy tools to provide counter-cyclical support to affected sectors of the economy.&nbsp;For the medium-term, the authorities understand the need to diversify trade and investment partners,” she said.



It helps that the so-called “China+1” strategy still holds in the medium-term, she added. Many export-oriented Southeast Asia economies were big beneficiaries of the strategy during the first Trump administration, receiving economic boosts as companies shifted production away from China to their shores.&nbsp;



In Cambodia, for&nbsp;instance, according to data from the World Bank, Cambodia’s exports of goods and services made up 55.5% of its gross domestic product in 2018, before Trump imposed his first China tariffs — by 2023, this figure had risen to 66.9%.



Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, agreed,&nbsp;saying that these emerging markets are more attractive than China as export manufacturing hubs in the long term.



“It’s also worth bearing in mind that these tariffs do nothing to eliminate the labor cost competitiveness of EM Asia ex-China economies (versus China), which will remain a big selling point over the long term to multinationals,” he told CNBC by email. “New supply chains won’t be created overnight.”

108136098-17455036212025-04-24t134926z_586299269_rc2d4ea8bz9f_rtrmadp_0_usa-stocks

Emerging markets are betting on a post-tariffs winner — and it’s not China or the U.S.

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/250424-donald-trump-hat-ew-203p-dbe2c4-820x547.jpg" alt="" class="wp-image-613531" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/250424-donald-trump-hat-ew-203p-dbe2c4-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/250424-donald-trump-hat-ew-203p-dbe2c4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/250424-donald-trump-hat-ew-203p-dbe2c4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/250424-donald-trump-hat-ew-203p-dbe2c4-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/250424-donald-trump-hat-ew-203p-dbe2c4.jpg 1500w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo; via CNBC</figcaption></figure>



The online store for the Trump Organization on Thursday began selling red hats and T-shirts bearing the message “Trump 2028,” fueling fresh questions about President Donald Trump attempting to seek a third term in the White House despite a constitutional bar on doing so.



The White House, when asked about the apparel, referred CNBC to the&nbsp;Trump&nbsp;Organization. The Trump Organization did not respond to a request for comment.



White House press secretary Karoline Leavitt told NBC News, “But it’s a cool hat and I suspect it will be highly popular!” The hat costs $50, and a red shirt bearing the “Trump 2028″ logo and “Rewrite the Rules” underneath it is selling for $36.



Trump has repeatedly teased the idea that he would run for a third term as president. This would require amending the U.S. Constitution.



The 22nd Amendment to the Constitution states in part, “No person shall be elected to the office of the President more than twice.” Trump was elected in 2016 and then again in 2024.



In late March, Trump did not rule out the possibility of seeking reelection in 2028.



“A lot of people want me to do it,” Trump told NBC News then. “But, I mean, I basically tell them we have a long way to go, you know, it’s very early in the administration.”



Asked by NBC if he wanted a third term, Trump said, “I like working.”



“I’m not joking,” Trump said. “But I’m not — it is far too early to think about it.”



“There are methods which you could do it,” the president said, referring to serving another term.



“I suspect I won’t be running again, unless you say, ‘He’s so good we’ve got to figure something else out,’” Trump reportedly told Republicans during a private meeting after his November electoral victory over Democratic former Vice President Kamala Harris.



In May 2024, while speaking to members of the National Rifle Association, Trump said, ″I don’t know, are we going to be considered three-term or two-term? Are we three-term or two-term if we win?″



Former White House advisor Steve Bannon said on “Real Time with Bill Maher” on April 11 that “President Trump is going to run for a third term, and President Trump is going to be elected again.”



“On the afternoon of January 20th of 2029, he’s going to be president of the United States,” Bannon predicted.



Bannon also said, “We have a team” of people looking to enable a third term for Trump.



Rep. Andy Ogles, R-Tenn., in early January introduced a House resolution to amend the Constitution to allow Trump and any other future president to be elected to a third term.



Ogles’ resolution is tailored specifically to permit Trump to serve a third term but not to allow the three living two-term former presidents to serve a third term.



″No person shall be elected to the office of the President more than three times, nor be elected to any additional term after being elected to two consecutive terms,” the amendment states.



Unlike Trump, former Presidents Bill Clinton, George W. Bush and Barack Obama all served two consecutive terms. Former President Joe Biden served one term.

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Trump Organization sells ‘Trump 2028’ hat and shirt, fueling questions about third term bid

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-820x547.jpeg" alt="" class="wp-image-613528" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108136511-1745552401952-gettyimages-2211163539-AFP_43ER464-1-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">US President Donald Trump steps off Marine One upon arrival at the Leesburg Executive Airport Landing Zone in Leesburg, Virginia, on April 24, 2025. Alex Wroblewski | Afp | Getty Images</figcaption></figure>



BEIJING — U.S. President Donald Trump on Thursday refuted China’s claims that there were no ongoing trade discussions between Beijing and Washington.



“They had a meeting this morning &#8230; It doesn’t matter who ‘they’ is. We may reveal it later, but they had meetings this morning, and we’ve been meeting with China,” Trump told reporters.



The statement followed China’s denial of any talks with the U.S. and calls for abolishing “unilateral” tariff measures for resolving trade issues.



“At present there are absolutely no negotiations on the economy and trade between China and the U.S.,” Ministry of Commerce spokesperson He Yadong told reporters in Mandarin, translated by CNBC. He added that “all sayings” regarding progress on bilateral talks should be dismissed.



“If the U.S. really wants to resolve the problem &#8230; it should cancel all the unilateral measures on China,” He said.



Trump and Treasury Secretary Scott Bessent this week indicated that there could be an easing in tensions with China. The White House earlier this month added 145% tariffs on Chinese goods, to which Beijing responded with duties of its own and increased restrictions on critical minerals exports to the U.S.



The Commerce Ministry’s comments echoed those of Chinese Foreign Ministry spokesperson Guo Jiakun, who said on Thursday afternoon that there were no ongoing talks, according to state media.



Both spokespersons held to the official line that China would be willing to talk to the U.S. subject to Beijing being treated as an equal.



“China definitely wants to see the trade war deescalate, as it hurts both economies,”&nbsp;said Yue Su, principal economist, China, at The Economist Intelligence Unit. “However, due to the inconsistency of Trump’s policies and the lack of clarity around what he actually wants, China’s strategy has shifted from focusing on ‘what you need’ to ‘what I need.’ Their request for the U.S. to cancel ‘unilateral’ tariffs reflects that shift.”



China earlier this week threatened countermeasures against countries that might make deals with the U.S. at the expense of Beijing’s interests.



“We also need to recognize that this is a ‘whatever it takes’ moment for China in terms of U.S.-China relations,” Su said. “I&nbsp;wouldn’t be surprised if China adopts a more hawkish stance if the U.S. continues to escalate tensions.”



Several Wall Street banks have cut their China gross domestic product outlook in the last few weeks in light of the tariffs and escalating tensions with the U.S.



The Commerce Ministry on Thursday&nbsp;emphasized government and business efforts to help companies sell goods meant for exports to the Chinese market instead.



“From China’s perspective, any meaningful negotiations will likely require the US to reduce tariffs to the previous 20% or even lower level,” said Jianwei Xu, senior economist for Greater China, at Natixis.



“But for the Trump administration, however, reducing tariffs too far could raise uncomfortable questions: What was the point of the confrontation if we end up back where we started?”



The U.S. is China’s largest trading partner on a single-country basis. But in the last several years, Southeast Asia has surpassed the European Union to become China’s largest trading partner on a regional basis.



Correction. Yue Su is principal economist, China, at The Economist Intelligence Unit. An earlier version misstated the name of the organization.

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Trump asserts trade talks with China are underway after Beijing denies any ongoing negotiations

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-820x461.jpeg" alt="" class="wp-image-612440" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108134615-1745320819888-gettyimages-2209959602-UK_INFLATION.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Shoppers pass along the high street in Maidstone, UK, on Wednesday, April 16, 2025. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



The International Monetary Fund downgraded the U.K.’s 2025 growth forecast in its latest economic outlook released on Tuesday, warning that U.S. President Donald Trump’s trade tariffs, higher borrowing costs and increased energy prices will dent output this year.



In its reference forecast, the IMF predicted the British economy will grow 1.1%, down by 0.5 percentage points from its previous forecast issued in January. The fund now also expects the U.K. to grow by 1.4% in 2026, 0.1 percentage points lower than its previous estimate.



The figures were part of the IMF’s reference outlook, which does not include the tariff announcements made after April 4,&nbsp;such as the 90-day pause on the higher duties that Trump initially announced.



The downgrade for 2025 “reflects a smaller carryover from 2024, the impact of recent tariff announcements, an increase in gilt yields, and weaker private consumption amid higher inflation as a result of regulated prices and energy costs,” the IMF wrote in its World Economic Outlook report.



The downgrade pours more cold water on the U.K.’s Labour government which has made a main priority of growing the economy and is already contending with the uncertainty posed by trade tariffs from one of its largest trading partners, the U.S.



Trump announced a baseline 10% tariff on U.K. imports to the U.S. on April 2, despite Britain and the U.S. having almost balanced trade when it comes to the exchange of goods.



While the U.K. is hopeful it can strike a trade deal with the U.S., the White House leader’s mercurial stance on trade and tariffs has put financial institutions on edge.



The latest IMF downgrade for Britain echoes a similar downturn in domestic forecasts. In February, the Bank of England halved the U.K.’s growth projection for 2025 from 1.5% to 0.75%, warning of an uncertain global economic outlook and a sharp uptick in inflation later this year on the back of higher energy and water bills.



The U.K.’s Office for Budget Responsibility in March also halved its growth forecast for the U.K., slashing its outlook from 2% to 1% growth in 2025.



Despite the recent downgrades, the U.K. economy has shown some signs of life recently. The latest monthly growth data released earlier in April showed the economy grew by a larger-than-expected 0.5% month-on-month in February, from zero growth in January. National inflation, meanwhile, cooled to a lower-than-expected 2.6% in March.



The Bank of England appears sanguine on interest rate cuts as it looks to balance boosting growth with its predicted uptick in the inflation rate. Economists widely expect the BOE to cut its key interest rate from 4.5% to 4.25% at its next monetary policy meeting in May.



<h2 class="wp-block-heading" id="h-bright-spots-in-the-euro-zone"><a></a>Bright spots in the euro zone</h2>



Looking at the U.K.’s continental neighbors in the euro zone, the IMF predicted a slight decline in 2025 output, forecasting that growth in the euro area’s GDP will hit 0.8% in 2025, before picking up modestly to 1.2% in 2026.



“Rising uncertainty and tariffs are key drivers of the subdued growth in 2025,” the fund said. It noted that offsetting forces that support the modest uptick in 2026 include stronger consumption on the back of rising real wages, along with a projected fiscal easing in Germany following major changes to its fiscal rule, known as the “debt brake.”



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108086018-1736840423739-gettyimages-1090698142-amf06159.jpeg?v=1736840447&amp;w=1858&amp;h=1045&amp;vtcrop=y" alt="Spain, holiday homes, tax"/><figcaption class="wp-element-caption">Spain, holiday homes, tax Westend61 | Westend61 | Getty Images</figcaption></figure>



The IMF singled out Spain as a bright spot in the euro zone, stating its growth momentum “contrasts with the sluggish dynamics elsewhere,” with the Mediterranean nation expected to expand its economy by 2.5% this year following an upward revision of 0.2 percentage points from the forecast made in January.



“This reflects a large carryover from better-than-expected outturns in 2024 and reconstruction activity following floods,” the IMF said.



Trump’s tariffs cast a shadow over the wider EU, however. The U.S. president initially imposed a 20% “reciprocal” tariff on all goods coming from the European Union but paused the measures for 90 days until early July, lowering the duty to 10% until that time.



As it looks to sign its own trade deal with the States in the interim, the EU paused its retaliatory duty targeting 21 billion euros ($24.1 billion) worth of U.S. goods “to allow time and space for EU-U.S. negotiations,” the European Commission said.

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IMF slashes UK’s growth forecast, points to U.S. tariffs and borrowing costs

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-820x461.jpeg" alt="" class="wp-image-612340" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108133583-17449153292025-04-17t183309z_182229855_rc2uzdaji827_rtrmadp_0_usa-italy.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. President Donald Trump speaks as he meets with Italian Prime Minister Giorgia Meloni (not pictured) in the Oval Office at the White House in Washington, D.C., U.S., April 17, 2025. Evelyn Hockstein | Reuters</figcaption></figure>



Yesterday’s edition of this newsletter cautioned that U.S. President Donald Trump’s desire to intervene in the Federal Reserve, as he expressed to reporters on Friday, could result in upheaval in the markets. That didn’t happen because markets were closed for the Good Friday holiday.



On Monday, trading resumed. So have Trump’s attacks on the central bank — and, more pointedly, on Fed Chair Powell, describing him as “Mr. Too Late” and “a major loser” for not cutting interest rates. Trump appointed Powell to the Federal Reserve’s highest seat in his first presidential term during 2017.



With no market closure to shield shares from Trump’s threats, investors unloaded their stocks. All major U.S. indexes fell, weighed down by steep declines in the “Magnificent Seven” group of shares. The U.S. dollar weakened to a three-year low while gold prices hit a new high, suggesting, in combination, that global investors are losing confidence in the U.S. economy and reallocating their capital to safer assets shielded from Trump.



<h2 class="wp-block-heading" id="h-what-you-need-to-know-today"><a></a>What you need to know today</h2>



Trump escalates attacks on Powell U.S. President Donald Trump on Monday renewed and escalated his attacks on Federal Reserve Chair Jerome Powell. ″‘Preemptive Cuts’ in Interest Rates are being called for by many,” Trump said on Truth Social. “There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote, referring to Powell. On Friday, Trump also called for Powell to cut rates.



Stocks and U.S. dollar fall as gold hits high Stocks in the U.S. fell Monday. The S&amp;P 500 lost 2.36%, the Dow Jones Industrial Average tumbled 2.48% and the Nasdaq Composite was down 2.55%. The ICE U.S. Dollar Index fell as low as 97.92 on Monday, the lowest level since March 2022, according to FactSet. Gold prices jumped to $3,452.30 per ounce, a fresh record. Asia-Pacific markets traded mixed Tuesday. Hong Kong’s Hang Seng Index climbed nearly 0.5% but Japan’s Nikkei 225 declined roughly 0.2%. The Bank of Japan will likely pause rate hikes in its May meeting, said Moody’s Analytics.



Shares of Tesla drop before earnings Tesla shares fell almost 6% on Monday, a day ahead of its first-quarter earnings report. The stock is now down 44% for the year after wrapping up their worst quarter since 2022 in March. In the online forum that Tesla solicits investor inquiries before its earnings calls, one investor, referring to CEO Elon Musk, asked, “What steps has the board of directors taken to mitigate the brand damage caused by Elon’s political activities?”



Vance and Modi optimistic on deal India’s Prime Minister Narendra Modi met U.S. Vice President JD Vance, who was in India for a mostly personal trip, in the nation’s capital on Monday. A statement from Modi’s office said the two leaders “welcomed the significant progress in the negotiations for a mutually beneficial India-U.S. Bilateral Trade Agreement.” On Monday, U.S. Trade Representative Jamieson Greer said both countries have “finalized the terms of reference to lay down a roadmap for the negotiations on reciprocal trade.”



Nomura to buy parts of Macquarie Japanese investment bank and brokerage group Nomura said Tuesday it will buy the U.S. and European public asset management businesses of Macquarie, an Australian investment banking company, for $1.8 billion. The all-cash deal is expected to close by the end of this year, subject to regulatory approvals.



[PRO] Markets could have ‘severe’ reaction to Trump Stocks and bonds would likely have a “severe reaction” and sell off sharply if Trump makes a move to get rid of Federal Reserve Chair Jerome Powell, Evercore ISI’s vice chairman, Krishna Guha, told CNBC’s “Squawk Box” Monday. While Powell has said he doesn’t believe the president can legally remove the Fed Chair, Guha highlighted one way that Trump can pressure Powell without firing him.



<h2 class="wp-block-heading" id="h-and-finally"><a></a>And finally&#8230;</h2>



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108131827-1744683718571-gettyimages-2203962201-baglietto-notitle250310_np76O.jpeg?v=1745301518&amp;w=1858&amp;h=1045&amp;vtcrop=y" alt="U.S. one hundred dollar bills."/><figcaption class="wp-element-caption">Nurphoto | Nurphoto | Getty Images</figcaption></figure>



As the dollar falters, the world’s central banks tread a tightrope — devalue their currency or not



Uncertainty about U.S. policymaking has led to a flight from the greenback and Treasurys in recent weeks, with the dollar index weakening more than 9% so far this year. The drop in the U.S. dollar has led other currencies to appreciate against it, especially safe havens such as the Japanese yen, the Swiss franc and the euro.



While a stronger local currency might help tame inflation through cheaper imports, it complicates export competitiveness particularly under renewed U.S. tariffs, said Thomas Rupf, VP Bank’s co-head for Singapore and Asia chief investment officer.



Currency devaluation is likely to be more of an active consideration across emerging markets, particularly in Asia, said Nick Rees, head of macro research at Monex Europe. However, those countries and Asian central banks will need to tread a fine line to avoid capital flight and other risks.

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Investors grow wary of U.S. assets as Trump intensifies attacks on Powell

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="768" height="402" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee.jpg" alt="" class="wp-image-612268" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1Dm0ee-160x84.jpg 160w" sizes="auto, (max-width: 768px) 100vw, 768px" /><figcaption class="wp-element-caption">Nurphoto | Nurphoto | Getty Images</figcaption></figure>



The dollar has been sliding and the ripple effect on other currencies has brought a mix of relief and headache to central banks around the world.



Uncertainty about U.S. policymaking has led to a flight out of the U.S. dollar and Treasurys in recent weeks, with the dollar index weakening more than 9% so far this year. Market watchers see further declines.&nbsp;



According to Bank of America’s most recent Global Fund Manager Survey, a net 61% of participants anticipate a decline in the dollar’s value over the next 12 months — the most pessimistic outlook of major investors in almost 20 years.



The exodus from U.S. assets may reflect a broader crisis of confidence, with potential spillovers such as higher imported inflation as the dollar weakens.



The drop in the greenback has led other currencies to appreciate against it, especially safe havens such as the Japanese yen, the Swiss franc as well as the euro.



Since the start of the year, the Japanese yen has strengthened over 10% against the greenback, while the Swiss franc and the euro has appreciated about 11%, according to LSEG data.



Aside from the safe havens, other currencies that have strengthened against the dollar this year include the Mexican peso, up 5.5% against the dollar, and the Canadian dollar which has appreciated over 4%. The Polish zloty has strengthened more than 9% while and Russian rouble has appreciated over 22% against the greenback.



Some emerging market currencies, however, have depreciated despite the weakness in the greenback.



The Vietnamese dong and Indonesian rupiah weakened to a record low per U.S. dollar earlier this month. The Turkish lira also hit an all-time low last week. China’s yuan hit a record low against the dollar nearly two weeks back but has since strengthened.&nbsp;



<h2 class="wp-block-heading" id="h-breathing-room-to-cut-rates"><a></a>Breathing room to cut rates?</h2>



Barring a few exceptions like the Swiss National Bank, a weakening U.S. dollar is a relief to governments and central banks around the world, analysts told CNBC.



“Most central banks would be happy to see 10%-20% declines in the U.S. dollar,” said Adam Button, chief currency analyst at ForexLive. He added that the dollar strength has been a persistent problem for years and poses a difficulty for countries with hard and soft dollar pegs.



With many emerging market countries having large dollar-denominated debt, a weaker dollar lowers real debt burden. Additionally, a softer greenback and stronger local currency tend to make imports relatively cheaper, lowering inflation and hence allowing central banks the room to cut rates to boost growth.



The recent U.S. dollar sell-off offers more “breathing room” for central banks to cut rates, said Button.&nbsp;



While a stronger local currency might help tame inflation via cheaper imports, it complicates export competitiveness particularly under renewed U.S. tariffs where Asia is exposed as the world’s largest goods producer, said Thomas Rupf, VP Bank’s co-head for Singapore and Asia chief investment officer.



Currency devaluation is likely to be more of an active consideration across emerging markets, particularly in Asia, said Nick Rees, head of macro research at Monex Europe.



However, these emerging markets and Asian central banks will need to tread a fine line, to avoid capital flight and other risks.



“Emerging markets face high inflation, debt, and capital flight risks, making devaluation dangerous,” said Wael Makarem, financial markets strategists lead at Exness.



Additionally, devaluation could be seen by the U.S. administration as a trade measure which could attract retaliation, he added.



Emerging market economies may be reluctant to cut rates as it can affect the debt burden of domestic households and firms that have borrowed in U.S. dollars, said Fitch Ratings’ director of economics, Alex Muscatelli. A weaker domestic currency can also lead to capital outflows in response to lower interest differentials with the U.S., he added.



For example, Muscatelli does not see Indonesia’s central bank cutting rates too much given the recent currency volatility, but cited that Korea and India may have space for cutting rates.



The European Central Bank took the opportunity offered by declining inflation to cut rates by another 25 basis point at its April meeting. The ECB on Thursday said that “Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.”



Another example is the Swiss National Bank, which has grappled with a strong franc for much of the past 15 years, observed Button. Exports of goods and services make up over 75% of Switzerland’s GDP and a strong franc makes Swiss goods more expensive abroad.



“If capital continues to flow in, they may have to take drastic measures to devalue,” he said. Investors flood into the franc during times of uncertainties, such as in recent weeks, strengthening the franc.



<h2 class="wp-block-heading"><a></a>Central banks are avoiding devaluation — for now</h2>



Devaluing the currency poses the risk of stoking price growth and monetary authorities will be wary of inflation staying above their targets.



The risk of higher inflation arising from currency depreciation as well as tariffs — as countries respond to U.S. levies — are likely to make central banks reluctant to pursue a path of voluntary devaluation, said Wells Fargo’s international economist and FX strategist, Brendan McKenna.



On top of that, while most foreign central banks do theoretically have the bandwidth to weaken their own currency, the likelihood is still low in the current environment, the strategist added.



Whether a country can devalue its currency is influenced by several factors: the size of its FX reserves, exposure to foreign debt, its trade balance, and sensitivity to imported inflation.&nbsp;



“Export-oriented countries with sufficient reserves and lower reliance on foreign debt would have more room to devalue – but even those are likely to tread carefully,” said McKenna.&nbsp;



The broader direction of trade negotiations will be key to how countries choose to act. Aside from China, several countries have displayed a willingness to engage in trade negotiations, and if these talks lead to lower tariffs, then central banks will not be as likely to pursue weaker currencies, he added.



In the current geopolitical climate, devaluation could also invite retaliation and risks of accusations of currency manipulation, said VP Bank’s Rupf.



Though there is still the possibility that trade tensions could lead to more protectionist outcomes, which will drive central banks toward devaluing their currencies.



“But for now, it seems the preferred action is avoiding a currency war that would only add more instability to the local and global economy,” McKenna said.

AA1Dm0ee

As the dollar falters, the world’s central banks tread a tightrope — devalue their currency or not

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828-820x410.jpeg" alt="" class="wp-image-610430" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828-820x410.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828-300x150.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828-160x80.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828-768x384.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828.jpeg 884w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dilara Irem Sancar | Anadolu | Getty Images</figcaption></figure>



China last week announced it was done retaliating against U.S. President Donald Trump’s tariffs, saying any further increases by the U.S. would be a “joke,” and Beijing would “ignore” them.



Instead of continuing to focus on tariffing goods, however, China has chosen to resort to other measures, including steps targeting the American services sector.



Trump has jacked up U.S. levies on select goods from China by up to 245% after several rounds of tit-for-tat measures with Beijing in recent weeks. Before calling it a “meaningless numbers game,” China last week imposed additional duties on imports from the U.S. of up to 125%.



While the Trump administration has largely focused on pressing ahead with tariff plans, Beijing has rolled out a series of non-tariff restrictive measures including widening export controls of rare-earth minerals and opening antitrust probes into American companies, such as pharmaceutical giant DuPont and IT major Google.



Before the latest escalation, in February Beijing had put dozens of U.S. businesses on a so-called “unreliable entity” list, which would restrict or ban firms from trading with or investing in China. American firms such as PVH, the parent company of Tommy Hilfiger, and Illumina, a gene-sequencing equipment provider, were among those added to the list.



Its tightening of exports of critical mineral elements will require Chinese companies to secure special licenses for exporting these resources, effectively restricting U.S. access to the key minerals needed for semiconductors, missile-defense systems and solar cells.



In its latest move on Tuesday, Beijing went after Boeing — America’s largest exporter — by ordering Chinese airlines not to take any further deliveries for its jets and requested carriers to halt any purchases of aircraft-related equipment and parts from U.S. companies, according to Bloomberg.



Having deliveries to China cut off will add to the cash-strapped plane maker’s troubles, as it struggles with a lingering quality-control crisis.



In another sign of growing hostilities, Chinese police issued notices for apprehending three people they claimed to have engaged in cyberattacks against China on behalf of the U.S. National Security Agency.



Chinese state media, which published the notice, urged domestic users and companies to avoid using American technology and replace them with domestic alternatives.



“Beijing is clearly signaling to Washington that two can play in this retaliation game and that it has many levers to pull, all creating different levels of pain for U.S. companies,” said Wendy Cutler, vice president at Asia Society Policy Institute.



“With high tariffs and other restrictions in place, the decoupling of the two economies is at full steam,” Cutler said.



<h2 class="wp-block-heading" id="h-targeting-trade-in-services"><a></a>Targeting trade in services</h2>



China is seen by some as seeking to broaden the trade war to encompass services trade — which covers travel, legal, consulting and financial services — where the U.S. has been running a significant surplus with China for years.



Earlier this month, a social media account affiliated with Chinese state media Xinhua News Agency, suggested Beijing could impose curbs on U.S. legal consultancy firms and consider a probe into U.S. companies’ China operations for the huge “monopoly benefits” they have gained from intellectual-property rights.



China’s imports of U.S. services surged more than 10-fold to $55 billion in 2024 over the past two decades, according to Nomura estimates, driving U.S. services trade surplus with China to $32 billion last year.



Last week, China said it would reduce imports of U.S. films and warned its citizens against traveling or studying in the U.S., in a sign of Beijing’s intent to put pressure on the U.S. entertainment, tourism and education sectors.



“These measures target high-visibility sectors — aviation, media, and education — that resonate politically in the U.S.,” said Jing Qian, managing director at Center for China Analysis.



While they might be low on actual dollar impact given the smaller scale of these sectors, “reputational effects — such as fewer Chinese students or more cautious Chinese employees — could ripple through academia and the tech talent ecosystem,” he added.



Nomura estimates $24 billion could be at stake if Beijing significantly step up restrictions on travel to the U.S.

108130007-1744293710285-gettyimages-2208850679-AA_10042025_2168828

China targets U.S. services and other areas as it decries ‘meaningless’ tariff hikes on goods

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X-820x461.png" alt="" class="wp-image-610146" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X-820x461.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X.png 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Cargo ships and containers at Qingdao port in eastern China’s Shandong province on Dec. 4, 2024. Stringer | Afp | Getty Images</figcaption></figure>



The World Trade Organization (WTO) warned on Wednesday that the outlook for global trade has “deteriorated sharply” in the wake of U.S. President Donald Trump’s tariffs regime.



“The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty,” the WTO said in its latest “Global Trade Outlook and Statistics” report out Wednesday.



Based on the tariffs currently in place, and including a 90-day suspension of “reciprocal tariffs,” the volume of world merchandise trade is now expected to decline by 0.2% in 2025, before posting a “modest” recovery of 2.5% in 2026.



The decline is anticipated to be particularly steep in North America, where exports are forecasted to drop by 12.6% this year.



The WTO also warned that “severe downside risks exist,” including the application of “reciprocal” tariffs and a broader spillover of policy uncertainty, “which could lead to an even sharper decline of 1.5% in global goods trade,” particularly hurting export-oriented, least-developed countries.



The recent tariff disturbances follow a strong year for world trade in 2024, during which merchandise trade grew 2.9% and commercial services trade expanded by 6.8%, the WTO said.



The new estimate of a 0.2% decline in world trade for 2025 is nearly three percentage points lower than it would have been under a “low tariff” baseline scenario, the WTO added, and marks a significant reversal from the start of the year when the trade body’s economists expected to see continued trade expansion supported by improving macroeconomic conditions.



“Risks to the forecast include the implementation of the currently suspended reciprocal tariffs by the United States, as well as a broader spillover of trade policy uncertainty beyond U.S.-linked trade relationships,” the WTO said.



“If enacted, reciprocal tariffs would reduce world merchandise trade growth by an additional 0.6 percentage points, posing particular risks for least-developed countries (LDCs), while a spreading of trade policy uncertainty (TPU) would shave off a further 0.8 percentage points. Taken together, the reciprocal tariffs and spreading TPU would lead to a 1.5% decline in world merchandise trade volume in 2025.”



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108127151-17438709982025-04-04t234656z_1270263179_rc2xpdazxgbd_rtrmadp_0_usa-trump-tariffs.jpeg?v=1744047527&amp;w=1858&amp;h=1045&amp;vtcrop=y" alt="U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria"/><figcaption class="wp-element-caption">U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., on April 2, 2025. Carlos Barria | Reuters</figcaption></figure>



Trump stunned trading partners and global markets in early April, when he announced a raft of “reciprocal” tariffs on imports from more than 180 countries. Beijing was hit the hardest of all, with the U.S. duty on Chinese imports now effectively totaling 145%. China in turn hit back at Washington with retaliatory tariffs of up to 125% on U.S. imports.



Widespread market turbulence following the tariffs announcement prompted a temporary climbdown by Trump, with the president last week announcing that the new duties on imports from most trading partners would be reduced to 10% for 90 days in order to allow for trade negotiations with Washington’s counterparts.



The WTO said in its Wednesday report that the impact of recent trade policy changes is likely to vary sharply from region to region.



In the adjusted forecast, North America now subtracts 1.7 percentage points from global merchandise trade growth in 2025, turning the overall figure negative.



Meanwhile, Asia and Europe continue to contribute positively, but less than in the baseline scenario, with Asia’s input halved to 0.6 percentage points.



The disruption in U.S.-China trade is expected “to trigger significant trade diversion,” the WTO added, raising concerns among third markets about increased competition from China.



“Chinese merchandise exports are projected to rise by 4% to 9% across all regions outside North America as trade is redirected. At the same time, U.S. imports from China are expected to fall sharply in sectors such as textiles, apparel and electrical equipment, creating new export opportunities for other suppliers able to fill the gap,” the trade organization remarked, noting that this could open the door for some least-developed countries to increase their exports to the U.S. market.

108071122-1733319291213-gettyimages-2187589196-AFP_36PC93X

Global trade outlook has ‘deteriorated sharply’ amid Trump tariff uncertainty, WTO warns

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="768" height="402" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1yXNHy.jpg" alt="" class="wp-image-610037" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1yXNHy.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1yXNHy-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/AA1yXNHy-160x84.jpg 160w" sizes="auto, (max-width: 768px) 100vw, 768px" /><figcaption class="wp-element-caption">A general view of people visiting the Trafalgar Tavern pub decorated with bunting and string lights on the bank of the River Thames in Greenwich on December 16, 2023 in London, United Kingdom.  John Keeble | Getty Images News | Getty Images</figcaption></figure>



The U.K.’s annual inflation rate fell to 2.6% in March, coming in below analyst expectations, according to data released by the Office for National Statistics (ONS) on Wednesday.



Economists polled by Reuters had anticipated the consumer price index would hit 2.7% in the twelve months to March.



The rate of price rises in Britain hit 2.8% in February, after rising sharply to 3% in January.



Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, rose by 3.4% in the year to March, down slightly from 3.5% in February.



The largest downward contributions to the monthly change in the inflation rate came from recreation and culture, and motor fuels, the ONS said, while the largest upward driver was clothing.



Sterling was up 0.25% against the U.S. dollar at $1.3265, following the data release.



The latest data will be analyzed closely by policymakers at the Bank of England,&nbsp;who are expected to cut interest rates when they next convene on May 8. The BOE held rates at 4.5% at its previous meeting in March amid a forecasted inflation hike and uncertainty over economic growth and global trade under U.S. President Donald Trump’s tariffs.



There was good news for the U.K. last week, when the latest monthly growth data showed that the British economy grew by 0.5% month-on-month in February. The U.K. is also hoping to sign a trade deal with Washington, having escaped relatively unscathed from Trump’s tariffs regime with just a baseline 10% duty on imports to the States.



Traders will be looking closely at the BOE’s next policy statement on Thursday for its assessment of the economic outlook for the country.



In a statement out in March, the central bank said “global trade policy uncertainty has intensified, and the United States has made a range of tariff announcements, to which some governments have responded.”



“Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally,” it added.



The BOE warned in February that it expected inflation to temporarily rise to 3.7% in the third quarter of this year, as energy costs are set to accelerate. At the time, it also halved its 2025 growth forecast for the U.K. to 0.75%.



Ruth Gregory, deputy chief U.K. economist at Capital Economics, was among the analysts noting that the slowdown in inflation was not expected to last.



“The dip &#8230; won’t be sustained for long, with inflation set to rise to around 3.5% in the coming months. But we think a weak economy will quash inflation eventually and that the tariff shock has tilted the balance of risks towards lower inflation and faster falls in interest rates,” she said in emailed comments Wednesday.



“For now, we are sticking to our view that inflation will gradually fall to 2.0% in 2026. But the risks to that forecast appear to be increasingly skewed to the downside,” she added.

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Global trade outlook has ‘deteriorated sharply’ amid Trump tariff uncertainty, WTO warns

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