Global Markets Wobble as Trade Uncertainty Deepens

Key Highlights:

• Trump’s 90-day tariff pause nears expiry; steel and aluminum levies set to double
• OECD slashes global growth forecast to 2.9% for 2025-26, citing trade tensions
• China, EU, and Taiwan respond to escalating U.S. tariff moves
• U.S. consumer companies accelerate supply chain shifts from China
• Steel tariffs threaten U.S.-UK trade deal progress

The global economy is bracing for impact as U.S. President Donald Trump’s escalating tariff agenda stokes fresh uncertainty. With the 90-day pause on sweeping "reciprocal" tariffs set to expire in early July, global markets are on edge, and the OECD has warned of the weakest economic growth since the pandemic.

On Tuesday, the OECD slashed its global growth forecast for 2025-26 to 2.9%, down from its prior estimate of over 3%. The U.S. economy is expected to slow sharply, with growth projections revised down to 1.6% in 2025 and 1.5% in 2026. OECD Chief Economist Álvaro Pereira stressed the need for urgent trade deals to prevent deeper economic damage, warning that continued barriers will carry “massive repercussions for everyone.”

Trade tensions flared anew this week as Trump’s administration pressed countries to submit their “best offers” on trade by Wednesday. While the White House touts progress on deals, only an agreement with the UK has been formally announced. That deal, however, hangs in the balance as the U.S. prepares to double tariffs on steel and aluminum imports from Wednesday.

The UK is scrambling to secure a resolution ahead of the tariff hike. UK Business Secretary Jonathan Reynolds is set to meet U.S. Trade Representative Jamieson Greer in an attempt to salvage the economic prosperity agreement touted by both nations. Without a deal, the promise to eliminate tariffs on UK metal exports could falter, risking a collapse of the pact.

Meanwhile, China responded forcefully to Trump’s latest claims of a breach in their trade agreement. The Chinese Ministry of Commerce accused the U.S. of undermining the deal and vowed to “take resolute and forceful measures” to protect its interests. Taiwan, too, remains in quiet negotiations with the U.S., seeking to avoid a 32% import tax, though officials declined to disclose details.

The corporate world is already feeling the squeeze. HP, Gap, and Logitech have accelerated supply chain shifts away from China, diversifying production across Vietnam, Thailand, India, Mexico, and the U.S. HP CEO Enrique Lores expects almost no North America-bound products to be sourced from China by June, while Gap aims to limit any single country’s sourcing exposure to under 25% by 2026. Logitech is reducing its U.S. exposure to Chinese-made goods from 40% to 10% by the end of next year.

Legal uncertainty clouds Trump’s tariff path as well. A federal appeals court has temporarily upheld the tariffs, overriding an earlier ruling by the U.S. Court of International Trade that deemed them unlawful. Administration officials signaled that even if courts rule against the tariffs, the fight isn’t over, hinting at further legal and executive maneuvers.

As Trump’s tariff strategy edges toward a July showdown, global markets, businesses, and policymakers face an uneasy road ahead. The OECD’s stark downgrade underscores the stakes: unless trade tensions ease, the risk of prolonged global slowdown looms large.