Table of Contents
1. OECD Sounds Alarm: Global Growth Slows Amidst Trump’s Trade Wars
A sobering report released today by the Organisation for Economic Co-operation and Development (OECD) paints a cautious picture of the global economic trajectory. The Paris-based international body has updated its forecast, predicting that world economic growth will decelerate to a modest 2.9% in 2025 and remain at that level in 2026. This marks a noticeable slowdown from the 3.3% global growth recorded last year and 3.4% in 2023. While the world economy has demonstrated remarkable resilience in recent years, navigating through global shocks like the COVID-19 pandemic and the conflict in Ukraine, the OECD’s chief economist, Álvaro Pereira, explicitly links this deceleration to a single, dominant factor: the escalating trade wars initiated by the Trump administration.
Without directly naming the US President, Pereira’s commentary accompanying the forecast highlights a “significant increase in trade barriers as well as in economic and trade policy uncertainty.” He unequivocally states that “this sharp rise in uncertainty has negatively impacted business and consumer confidence and is set to hold back trade and investment.” This assessment underscores the profound impact of protectionist policies that reverse decades of multilateral efforts towards freer world trade. The OECD’s analysis points specifically to the unilateral 10% taxes (tariffs) levied by the US on imports from almost every country, alongside specific duties on steel, aluminum, and automobiles. The looming threat of even higher import taxes, including the recently announced doubling of steel and aluminum tariffs to 50%, further clouds the outlook.
The implications of this OECD forecast are far-reaching. Slower global growth means reduced overall demand for goods and services, potentially impacting export-oriented economies disproportionately. For manufacturers and exporters like Shiv’s Assets Group, a constricted global market translates to tougher competition, potentially lower prices, and increased pressure on profit margins. The report also highlights that China, the world’s second-biggest economy, is expected to see its growth decelerate from 5% last year to 4.7% in 2025 and 4.3% in 2026. This slowdown is attributed partly to the negative effects of Trump’s tariffs, compounding challenges already faced by China’s real estate sector. While Beijing’s government has outlined measures to offset some damage through interest rate cuts, bank lending incentives, and factory upgrades, the external trade environment remains a significant headwind. Similarly, the Eurozone is expected to see a slight pickup in growth, aided by interest rate cuts from the European Central Bank, but still operates within this challenging global trade context. The OECD’s report serves as a critical reminder that trade policy choices by major economies have cascading effects, shaping the economic destinies of nations and businesses worldwide.
2. Trump Administration Pushes for Urgent Trade Deals Amidst Looming Deadlines
In a move signaling heightened urgency and aggressive negotiation tactics, the Trump administration is pushing countries to finalize trade agreements by submitting their “best offers” this Wednesday, June 5, 2025. This ultimatum comes just five weeks ahead of a self-imposed deadline of July 8, when broader “reciprocal tariffs” are set to kick in unless agreements are reached. A draft letter from the Office of the United States Trade Representative (USTR), seen by Reuters, reveals the administration’s intent to accelerate talks with multiple partners including the European Union, Japan, Vietnam, and significantly, India.
This rapid push follows the initial suspension of Trump’s “Liberation Day” tariffs on April 9, a 90-day pause enacted after adverse reactions in global stock, bond, and currency markets to the comprehensive nature of these duties. While White House economic adviser Kevin Hassett has consistently assured that several agreements were nearing completion, so far, only a preliminary pact with Britain has been secured among major trading allies. This highlights the ambitious yet often challenging nature of the Trump administration’s “America First” trade agenda, which aims to reshape global trade relationships, reduce trade deficits, and safeguard American industries.
The USTR’s draft letter is prescriptive, requiring nations to present their most comprehensive proposals across several critical sectors. These include detailed offers on tariffs and quotas for the purchase of US industrial and agricultural goods, alongside concrete plans to address existing non-tariff barriers. Crucially, the correspondence also seeks commitments related to digital commerce, economic security, and other country-specific obligations. The US plans to evaluate these responses within days and then propose a “possible landing zone” that could potentially incorporate a mutual tariff arrangement. This accelerated timetable and demand for comprehensive concessions put significant pressure on negotiating partners to make rapid and substantial commitments.
Moreover, the administration’s resolve remains firm despite ongoing legal challenges to its tariff authority. Last Wednesday, the International Trade Court determined that Trump had exceeded his legal authority regarding tariffs implemented under the International Emergency Economic Powers Act (IEEPA). However, an appeals tribunal temporarily suspended this ruling the following day. The draft letter explicitly cautions allies against assuming the tariffs would cease if courts rule unfavorably, stating, “Regardless of ongoing litigation concerning the President’s reciprocal tariff action in U.S. courts, the President intends to continue this tariff program pursuant to other robust legal authorities if necessary, so it is important that we continue our discussions on these matters.” This resolute stance indicates that the threat of tariffs will remain a potent negotiating tool, forcing countries to engage meaningfully or face potential economic penalties. For businesses like Shiv’s Assets Group, these swift deadlines and the potential for new or sustained tariffs require constant vigilance and agile response strategies to minimize disruption and identify any preferential access opportunities.
3. India-US Trade Pact Optimism Persists Despite Tariff Headwinds
Amidst the overarching global trade volatility and the specific friction over US metal tariffs, a beacon of optimism shines on the bilateral trade front between India and the United States. Today, both US Commerce Secretary Howard Lutnick and India’s Commerce and Industry Minister Piyush Goyal expressed strong confidence that an interim bilateral trade deal between the two nations is likely to be finalized in the “not too distant future,” potentially by the July 8 deadline set by the Trump administration for broader trade pacts.
Speaking at the US-India Strategic Partnership Forum (USISPF), Secretary Lutnick stated, “You should expect a deal between the United States and India in the not too distant future because I think we found a place that really works for both countries.” He attributed this accelerated pace to “capable negotiators on both sides” and even suggested that “earlier countries get a better deal,” hinting at a potential advantage for India as one of the initial partners to secure such a pact. This comes as a US delegation is visiting New Delhi this week (June 5-6) for the next crucial round of discussions on the proposed Bilateral Trade Agreement (BTA).
From the Indian side, Minister Goyal, speaking from France, confirmed India’s active commitment to finalizing the proposed agreement. “Both countries are committed to work together, and both desire to give preferential access to each other’s businesses. We are working towards the bilateral trade agreement,” Goyal affirmed. The proposed pact, first announced by Prime Minister Narendra Modi and President Trump in February, envisions a multi-sector deal with the first phase expected to be finalized by September-October 2025. Its ambitious goal is to more than double the bilateral trade volume from the current $191 billion to an impressive $500 billion by 2030.
A key element of India’s negotiation stance is its push for a complete exemption from the recently doubled 50% reciprocal tariffs imposed by the US on Indian goods, particularly steel and aluminum. While the US has rejected India’s WTO notice on this matter, the ongoing bilateral talks provide a direct channel for resolving this specific tariff dispute outside the multilateral framework. US Commerce Secretary Lutnick acknowledged India’s concerns regarding tariffs, noting that “Bringing them down to a level that is reasonable and appropriate so we can be great trading partners with each other, I think is absolutely on the table.” He also highlighted that “India is starting to move towards buying military equipment from the United States, which goes a long way,” suggesting broader strategic alignment plays a role in trade negotiations.
For Shiv’s Assets Group, which deals in building materials like TMT Bars and other metal-related products, the outcome of these negotiations is directly impactful. A successful agreement could provide crucial preferential access to the US market, potentially mitigating the severe effects of the 50% tariffs. Beyond specific product categories, a stronger, more predictable trade relationship between India and the US could foster increased investment, facilitate technology transfer, and create a more stable environment for Indian exporters and importers alike. This dual-track approach, combining assertiveness on specific tariff issues with proactive engagement on broader trade agreements, represents India’s sophisticated strategy in navigating the complexities of modern global commerce.
4. China’s Economic Performance: Lingering Contraction and Trade Tensions Impact
The economic pulse of China, the world’s second-largest economy and a powerhouse in global manufacturing, continues to show signs of strain. Today’s release of the Caixin Manufacturing Purchasing Managers’ Index (PMI) for May, a private survey, registered an unexpected contraction at 48.3. This figure is significantly weaker than both the market expectation of 50.7 and the official PMI (released yesterday), which stood at 49.5 (still in contraction but slightly higher). The Caixin PMI, which focuses more on small and medium-sized enterprises (SMEs) and export-oriented businesses, provides a more granular view of the challenges faced by China’s industrial sector.
The persistent contraction, especially the sharper decline seen in the Caixin index, highlights the lingering impact of global trade tensions and subdued demand on Chinese factories. The report indicated that new export orders declined at a faster pace, directly correlating with the ongoing friction with the United States. While China’s non-manufacturing PMI (services sector) has remained in expansionary territory, the weakness in its vast manufacturing base is a significant concern for policymakers striving to achieve an ambitious 5% economic growth target this year. A prolonged slump in factory output, particularly in exports, could create a challenging environment for job creation and overall economic stability.
The market reaction to this data was mixed. Despite the weak economic indicators, Chinese stocks, particularly the Shanghai Composite and Shenzhen Component, saw some gains in post-holiday trading. This seemingly counter-intuitive movement was largely attributed to speculation that US President Donald Trump and Chinese President Xi Jinping might speak this week to address trade issues. Such a high-level dialogue, even if purely speculative, offers a glimmer of hope for de-escalation, influencing investor sentiment despite the underlying economic reality. However, the overarching message from the PMIs is clear: China’s manufacturing sector is grappling with significant headwinds, and its recovery is fragile. Imports also hit a 16-year low, and exports fell to a five-year low in related reports, further underscoring the impact of retaliatory tariffs and weakening global demand.
For businesses engaged in the global supply chain, understanding China’s manufacturing health is paramount. For Shiv’s Assets Group, relying on global markets for sourcing or selling, a contraction in Chinese factory output can signal broader slowdowns in global demand for goods, including building materials. It could also lead to shifts in supply chain dynamics, impacting raw material availability and pricing for products like AAC Fly Ash Blocks and Fly Ash. The complex interplay of domestic stimulus measures, geopolitical tensions, and global demand will continue to define China’s economic trajectory and, by extension, influence the global trade landscape.
5. BRICS Influence and Geopolitical Contours: Reshaping Global Trade
Beyond the immediate economic data and bilateral trade disputes, a more profound, geopolitical reshaping of global trade is unfolding, prominently featuring the expanding influence of the BRICS coalition. Today, US Commerce Secretary Howard Lutnick, while expressing optimism for an India-US trade deal, explicitly flagged India’s BRICS membership and its continued arms purchases from Russia as “irritants” in the broader bilateral relationship. This statement, though nuanced, underscores the complex geopolitical considerations that now heavily influence trade policy, even between strategic partners.
Lutnick’s comments reflect a persistent concern within the US administration regarding the increasing alignment of key emerging economies like India with a bloc that includes geopolitical rivals like Russia and China. India’s reaffirmation of its commitment to BRICS at a communications ministers’ meeting in Brazil, highlighting its focus on space, digital tech, and sustainability, further solidifies its position within the bloc. The expanded BRICS (now including Egypt, Ethiopia, Iran, UAE, and Indonesia as of 2025) is actively working towards greater intra-bloc trade, de-dollarization efforts (e.g., discussions around BRICS Pay, increased gold reserves), and a push for a multipolar global economic order that reduces reliance on traditional Western-led institutions. TV BRICS also reported today on regional trade discussions between Russia and China in Harbin, further demonstrating the bloc’s internal economic integration efforts.
This evolving geopolitical landscape means that trade is no longer just about economics; it’s increasingly a tool of statecraft and strategic alignment. Countries are diversifying their trade partnerships not just for economic efficiency but for geopolitical resilience. The BRICS narrative, emphasizing a shift away from singular economic dependencies, aligns with the broader global trend of supply chain diversification. Businesses are now actively seeking multiple sources and markets to mitigate risks associated with geopolitical shocks, trade wars, or disruptions in any single region. This involves exploring new vendors, diversifying logistics routes, and potentially investing in manufacturing capabilities across different geographic locations.
For Shiv’s Assets Group, understanding these geopolitical currents is essential for long-term strategy. While your primary markets may remain strong, exploring trade opportunities within the expanding BRICS bloc could open new avenues for your building materials. Simultaneously, being aware of how geopolitical tensions impact the sourcing of raw materials (like fly ash or metals for TMT bars) and the stability of shipping routes is crucial. The emphasis on resilience and adaptability, driven by both economic and political considerations, will define success in this new era of global trade. The ability to navigate complex diplomatic signals, anticipate shifts in trade policy, and strategically diversify operations will be key to maintaining a competitive edge and fostering sustainable growth for businesses operating from Bharuch, Gujarat.
Source – Hindustan Times, TV Brics, Indiatimes, Chinadailyasia, Supplyer Chain Brain, Asin Devlopment Bank, Times Of India, The Business Standard, The Econimics Times, Free Press Journal, NDTV, HDFC sky, Baby Pips,Tech In Asia, Tranding View, Story Board 18, Laredo Morning Times
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