Former President Donald Trump is no stranger to attempts to lower oil prices. He knows high petrol prices drive high inflation overall and plans to bring these petrol prices and inflation down as the centerpieces of his larger strategy. His achievements are set against a broader backdrop of global geopolitical and economic discord, especially related to the war in Ukraine. Analysts describe a picture showing that the U.S. intends to further undermine Russian President Vladimir Putin’s power. They hope to do so by focusing on Russia’s free-flowing commodity exports, including critical core to the global energy market.
Against this backdrop, negotiations are still in progress between President Keller-Sutter and Senator Marco Rubio. This intense negotiation to achieve a major breakthrough before a looming deadline is a manifestation of the urgency that exists within U.S. trade policy. The issue is complicated even further by India’s place, as it has been forced to the front-lines of the war’s collateral damage. Trump is using the war now as a bargaining chip to put more pressure on India in current trade talks.
While their counterparts in other European markets have rallied lately, the Swiss stock market is falling further behind amid a rising wave of tariff fears. A 39% tariff awaits Swiss exporters in the U.S. market. This disparity occurs only if trade negotiations are unsuccessful in achieving a more desirable outcome. Germany’s retail sector just posted a 1% decline in sales. This is in stark contrast to the eurozone which saw retail sales jump by 3.1%, a nine-month high.
The crisis has been compounded by the ongoing war in Ukraine, which of course continues to loom large over global markets. Analysts are watching the situation closely with Russia showing no intention of calling off hostilities by the short deadline Friday. They are especially focused on the question of whether China and India will cease buying Russian energy. A major cut back of these imports would cause a serious increase in global energy prices, hurling economic shockwaves across the planet.
Yet, in spite of these challenges, the recently negotiated U.S.-EU trade deal (the “Tariff Deal”) addressed many of the worst fears over tariff implications. Market participants are breathing a sigh of relief due to this agreement. Yet, the clouds of uncertainty continue to hang over the future of trade relations—including U.S.-China trade relations—and overall economic stability.
We know that the global economic landscape is shifting and changing at a dizzying pace. Stakeholders are anxiously watching how these adjustments will affect inflation rates, employment trends and commodity prices. The next few weeks could be very critical as markets respond, up or down, to progress in trade negotiations and key geopolitical happenings.