International News 25 April 2025
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Stocks and Dollar Gain, Gold Weakens after US Signals Softening China Tariffs
On April 23, 2025, global financial markets experienced significant movements, as top US officials indicated a potential easing of tariff policies towards China. This led to a rally in major Wall Street stock indexes, an increase in the value of the US dollar against major currencies, and a sharp decline in gold prices. US Treasury Secretary Scott Bessent has stated that the current high tariffs between the US and China are not sustainable in the long term. President Donald Trump has expressed a willingness to reduce trade tensions with China. According to reliable sources, the Trump administration is willing to consider a substantial reduction in tariffs on Chinese imports with a view to encouraging negotiations. However, it is understood that this would not be a unilateral action. Market optimism was further boosted by President Trump's decision to retract his threat to dismiss Federal Reserve Chairman Jerome Powell. The market reacted favourably to these indications of a more accommodating stance on tariffs and a readiness to pursue an agreement with China.
World Bank Slashes Economic Growth Projections for Latin America and the Caribbean
The World Bank has revised its forecast for Latin America and the Caribbean's economic growth in 2025, lowering it from 2.5% to 2.1%. The bank has identified a number of factors that have contributed to this adjustment, including delayed interest rate cuts in advanced economies, concerns about global trade restrictions, slower growth in China, and reductions in overseas development assistance. The growth outlook for the region's largest economies, Brazil and Mexico, was also downgraded. Mexico is now projected to experience no growth this year, compared to an initial forecast of 1.5%, while Brazil's growth outlook was reduced to 1.8% from 2.2%. Argentina, which recently secured a $20 billion deal with the International Monetary Fund, saw its growth projection increase to 5.5% from 5.0%. The IMF has also warned that US tariffs and rising trade tensions will further slow global economic growth.
Thailand's Rice Exports at Risk! Trump's policies trigger anxiety
Thai farmers are facing challenges due to a decline in rice prices following India's re-entry into the rice export market. Thailand is heavily reliant on the stability of global rice prices, given its status as the world's second-largest exporter of the commodity. The situation is further compounded by the looming threat of tariffs from the US. Should ongoing trade negotiations fail before the tariff moratorium expires in July, tariffs of 36% will be imposed on Thai goods. This could result in Thai jasmine rice becoming too expensive to compete in the market. Thailand is a major exporter of rice, with annual exports of nearly 10 million tons valued at over 225 billion baht. The US is the third-largest market by volume and the most lucrative by value. However, should tariffs be imposed, it is possible that buyers may turn to Vietnam, which offers rice at a significantly lower price. Vietnam has a competitive advantage due to its lower production costs.