Category Finance News

The US Court of Appeals temporarily lifted the US Court of International Trade’s order that froze Trump’s ability to move forward with most of his tariffs.

A federal appeals court on Thursday paused the US Court of International Trade’s (CIT) ruling that struck down President Donald Trump’s sweeping use of emergency powers to impose tariffs on dozens of countries.

The ruling by US Court of Appeals for the Federal Circuit temporarily restores Trump’s ability to move forward with tariffs using the emergency powers he declared last month. The court set a deadline of June 5 for the plaintiffs and June 9 for the government to reply.

The latest development muddies the regulatory back-and-forth over whether tariffs would be ultimately implemented and, if so, how steep they could be.

Recall how Trump began threatening tariffs back in February. Despite the rhetoric, substantive orders didn’t emerge for several weeks after that. “He kept doing this kind of seesaw effect of putting them on again, off again, on again, off again,” economist Phillip Magness, a senior fellow at the Independent Institute and David J. Theroux Chair in Political Economy, says. “And it wasn’t really until we got to the so-called ‘Liberation Day’ tariffs on April 2 that we had anything even resembling a permanent policy.”

Clarity seemingly came in the form of a rebuke from a bipartisan panel of three judges on late Wednesday. The judges explained that many of Trump’s tariffs—imposed under the obscure and rarely used International Emergency Economic Powers Act (IEEPA)—“exceed any authority granted” to the president by law. It was a sharp blow to Trump’s trade agenda, considering tariffs are one of his most aggressive policy maneuvers during his first 100 days in office.

The CIT’s ruling undercut a central pillar of the president’s global trade strategy by forcing the Trump administration to begin unwinding tariffs within just 10 days.

“It may be a very dandy plan, but it has to meet the statute,” Senior Judge Jane Restani, who was nominated to the court by former President Ronald Reagan, said during proceedings on the issue, which took place last week.

While not all the tariffs were struck down, the decision exposes the legal overreach behind Trump’s self-proclaimed dealmaking prowess and undermines his claims of unbounded executive control over international trade.

Magness, meanwhile, describes it as “a wild month”—in more ways than one.

This week’s CIT ruling “throws a wrench into all these supposed ongoing negotiations that Trump claims he’s been doing over the last several weeks,” Magness adds. Also, it highlights a “deeper legal problem” with the approach Trump has taken to negotiating.

Long-standing procedures go back to the 1930s, and US statutes detail how to negotiate trade agreements with foreign countries.

In 2002, for instance, President George W. Bush secured Trade Promotion Authority (TPA), also known as Fast Track, which allowed the executive branch to negotiate trade agreements that Congress could approve or reject but not amend. This authority helped streamline the approval process.

“Trump has essentially thrown those all out the window and says he’s just going to do it himself,” Magness says. “If you go through the normal process, it requires that certain agreements have to be approved by a congressional vote.”

In a research note from Goldman Sachs, published late Wednesday, analysts noted that they “expect the Trump administration will find other ways to impose tariffs.”

For example, the firm cites Section 122 of the Trade Expansion Act of 1962, which grants the president authority to take action to address unfair trade practices that affect US commerce.

Whether the Trump administration can skirt the court’s ruling to justify tariffs remains to be seen. Until then, Goldman Sachs says “this ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major US trading partners.”

The tariffs that were struck down by the ruling include: “Reciprocal” levies on 60-plus countries (which were paused for 90 days); the 10% baseline tariff; the 25% tariff on Canadian goods; the 30% tariff on all China-made goods; and the 25% tariff on most goods made in Mexico.

Levies issued by the Trump administration under other legal authorities, such as tariffs on steel, aluminum, cars, pharmaceuticals, and semiconductors, for example, remain in place.

UBS’s Kurt Reiman said in an analyst note published Thursday that he expects the administration to “prepare the groundwork for a more surgical increase in tariffs beginning this summer” once trade investigations into whether certain imports threaten national security are completed.

Project finance is playing an increasingly important role in meeting the growing demand for green and sustainable energy infrastructure.

As countries race to build out cleaner, more resilient power systems, investment is surging—and with it, a shift in how projects are funded. According to the International Energy Agency’s (IEA) latest World Energy Investment report, energy investment exceeded $3 trillion for the first time last year, with project finance emerging as a significant funding model.

At a global level, project finance plays a pivotal role in enabling the development of energy infrastructure, particularly in regions where public capital is limited. This is especially true for large-scale, capital-intensive renewable energy initiatives in developing countries, where structured finance mechanisms are mobilizing private investment.

Investment banks, along with private credit and equity, remain key backers of fossil-fuel investment. But the longer-term trajectory points toward a growing preference for clean energy, driven by policy incentives and evolving investor priorities. Of the $3 trillion in global energy investment in 2024, about $2 trillion was allocated to clean energy technologies—including renewables, grids, storage, nuclear and low-emissions fuels—and just over $1 trillion to fossil fuels, including coal, oil, and gas, the IEA reports.

To put these numbers in perspective, the ratio of clean energy to fossil fuel investment has shifted from 2:1 in 2015 to 10:1 in 2024 for power generation specifically. According to the latest available data, solar photovoltaic (PV) investment alone is projected to total $500 billion for 2024, surpassing all other electricity generation technologies combined.

China leads the way in clean energy spending at $680 billion, followed by the EU ($370 billion) and the US ($300 billion). Singapore-based Oversea-Chinese Banking Corporation (OCBC) is among the major banks supporting clients in the energy infrastructure space, collaborating with Chinese sponsors and engineering, procurement, and construction (EPC) contractors to develop and construct renewable projects in Southeast Asia: across generation, transmission, distribution, and storage infrastructure.

“Having committed to achieving net-zero emissions by 2050 for six priority sectors, including the power and oil and gas sector,” OCBC’s project finance team tells Global Finance, “a key focus for the bank has been to actively engage our clients in these sectors to support their net-zero transition. These include supporting our clients’ efforts in increasing the energy efficiency of new and existing plants and in scaling renewable energy development and deployment and relevant infrastructure.”

For example, OCBC China extended a one-year green loan of ¥220 million (about $30 million) to China’s Jiangsu Financial Leasing Co. The loan is being used for renewable-energy power generation projects in regions including Hebei, Guangxi, and Jiangsu.

“Markets such as Chile and Colombia have emerged as standout opportunities.”

Hugo Assunção, CFO, Perfin Infra

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Targeted at energy conservation and emission and pollution reduction, these projects are also expected to improve regional water quality and optimize energy infrastructure.

“The green loan empowers Jiangsu Financial Leasing to incorporate environmental considerations in their business activities, putting the company on track to meet its sustainability commitments,” the OCBC team says.

Outside China, OCBC is supporting energy projects in Australia, Southeast Asia, and North Asia as well as the UK and US. Commonalities include clear pathways to energy security, not just within the renewables space but also for liquid natural gas as a transitional fuel. The bank recently committed to financing two projects in the UK, including a large-scale commercially viable carbon capture storage facility and a gas-fired power plant with carbon capture. The OCBC team says, “Our involvement in financing long-distance transmission lines in the UK also favorably positions us to contribute to the development of an ASEAN power grid, which is currently being contemplated.”

Curtailment Risk

While China has made progress through massive transmission infrastructure investment, curtailment risk—whereby renewable energy generation may be deliberately reduced or halted due to grid constraints, oversupply, or market inefficiencies—remains a concern in certain regions. This is especially the case in the wind-rich northern provinces, where transmission constraints have led to curtailment rates that sometimes exceed 20%.

Elsewhere, curtailment risk tends to be pronounced in regions of the world that are experiencing rapid renewable energy growth but lack sufficient transmission infrastructure.

Brazil is one such country. Fitch Ratings predicts that the volume of curtailed energy there could rise over the next few years due to the level of intermittent renewable generation in the country’s energy mix and the time needed to construct new transmission lines.

Brazil is working to address this. Total infrastructure investment in the country reached R$259 billion (about $46 billion) in 2024, a 15% increase from the previous year, with around 46% allocated to energy projects, according to the Associação Brasileira da Infraestrutura e Indústrias de Base.

“Brazil’s energy market has demonstrated consistent growth, underpinned by robust regulatory oversight,” says Hugo Assunção, CFO at São Paulo-based Perfin Infra. “However, it faces structural challenges, notably curtailment … to key demand centers in the southeast. To mitigate this, investments have increasingly focused on expanding transmission infrastructure.” Perfin Infra’s infrastructure assets under management in 2024 increased from R$9 billion to R$15 billion in 2024, driven primarily by strategic investments across the transmission, generation, highways, and sanitation sectors.

Across Latin America as a whole, capital deployment led by Brazilian investors has grown steadily, Assunção says, supported in part by favorable regulatory frameworks.

“Recently, markets such as Chile and Colombia have emerged as standout opportunities,” he adds, “particularly in renewable energy and sustainable infrastructure sectors.”

Despite a challenging macroeconomic environment, Assunção credits Brazil with solid momentum in capital markets appetite for well-designed infrastructure projects. “Brazil’s stable regulatory framework and the accelerating demand for clean energy have bolstered investor confidence,” he says.

Regulatory certainty remains a key factor in pushing renewables investment forward, along with policy support and streamlined permitting processes. These concerns have only gained prominence as the Trump administration’s recent actions demonstrate that regulatory uncertainty isn’t limited to emerging markets.

Policies impeding offshore wind and other renewable projects, which would have contributed substantial megawatt capacity to the system over the next decade, will create significant challenges for new-generation deployment across the US, says Marcia Hook, Energy Regulatory and Markets partner at Clifford Chance. Countries that maintain consistent investment in renewables without implementing obstructive regulations are most likely to gain competitive advantage, she argues.

“We don’t really see any other countries taking specific action against certain types of renewable projects,” says Hook.

Private-sector Funding

Crucial for private-sector investors trying to gauge their risk appetite are regulatory frameworks that include lender protections and foreclosure rights guarantees, while private equity investors closely evaluate how regulations might impact their exit opportunities and asset valuations.

That means private capital is focusing on jurisdictions with transparent, predictable regulatory environments and technologies with the strongest regulatory support.

Private illiquid funds “are increasingly displacing traditional banks as the primary source of financing, engaging from the early stages of project development, including the construction phase,” notes Perfin’s Assunção.

Perfin expects the tilt toward private capital for financing green and sustainable energy projects to persist through the end of this year, as projects aligned with the energy transition and emerging technologies—such as green hydrogen and energy storage—continue to attract significant investor interest.

“These sectors have been drawing increasing capital inflows,” Assunção says, “driven by their strategic importance and the rising global demand for sustainable solutions.”

Ghana wants to optimize the benefits from its largely anarchical artisanal and small-scale mining (ASM) sector.

For this reason, Africa’s largest gold producer—and the sixth largest in the world—is ushering in a “new order” for gold trading.

As of April 30, no foreign company may purchase and export ASM gold. The move follows the annulment of all licenses held by foreign trading firms. The Ghana Gold Board (GoldBod), a state entity created in March, will now oversee all buying, selling, and export of ASM gold.

“Goldbod will give us better control over our gold exports and help shore up our foreign exchange reserves,” said Ghana Finance Minister Cassiel Ato Forson.

The West African nation has long wanted to restructure and streamline ASM mining, which accounts for one-third of its gold production, generating $5 billion in 2024. The subsector employs 1 million people and supports 4.5 million indirectly. Cumulatively, Ghana raked in $11.6 billion in gold exports last year.

Despite its importance, chaos reigns. Illegal mining, locally known as “galamsey,” thrives on child labor and is responsible for rapid land degradation, deforestation, and health risks.

By centralizing trading, Ghana hopes to end a mindbogglingly large culture of smuggling. In 2022 alone, 60 tons of gold worth an estimated $1.2 billion was smuggled out of the country.

Suppressing illegal trade is expected to result in increased revenues, with the ripple effect boosting reserves and stabilizing the local currency, the cedi.

Global insurers are partnering with stakeholders, including governments and environmental groups, as they adapt to the impact of climate change.

Collaboration – with partners both inside and outside the traditional insurance industry – is becoming a necessity for a global business that has absorbed $154 billion in insured losses generated by natural catastrophes last year alone.

That figure is 27% above the 10-year average, according to a recent report by Gallagher Re, which estimates that natural perils – from wildfires in Los Angeles to flooding in Valencia to deadly landslides in Southeast Asia – created direct economic costs of $417 billion in 2024. Private and public insurance entities covered 37% of that total, with the US alone accounting for $117 billion in insurance losses.

Rather than hiking premiums or pulling out of high-risk markets completely, the industry aims to minimize future losses by working with reinsurers, brokers, and other industry experts while reaching out to local governments and environmental groups, climate and technology experts, and even international agencies.

“Pulling out of a market is not a decision that anyone is going to make lightly.”

Dale Porfilio, Insurance Information Institute

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“No one country is going to solve this problem on its own,” says Maryam Golnaraghi, director of climate change and environment at The Geneva Association, a Zurich-based think-tank for the global insurance industry. “The solution is going to take all of society working at different levels and different stages to develop incentives and solutions.”

This month, the association is releasing a report based on nine months of collaborative effort between the industry, academic institutions, climate-risk modelling firms, mortgage and lending regulators, and international organizations. The document, which will lay out methods to safeguard access to home insurance amid the global surge in extreme weather risks, is focused on developed economies with mature insurance markets: Australia, Canada, the EU, Japan, the UK, and the US.

Financials at global insurers/reinsurers remain strong. Global reinsurer capital increased by $45 billion to $715 billion last year while reported equity rose by $38 billion to $600 billion, continuing a recovery that began in 2022, according to Aon, a global professional services firm.

“Higher retentions and tighter coverage again insulated reinsurers from the worst effects of the elevated natural catastrophe activity in 2024,” said Mike Van Slooten, head of market analysis for Aon’s reinsurance solutions in London, in a recent Aon report.

Looking For Climate Risk Solutions

As part of the collaborative effort to keep the industry financially resilient, some industry stakeholders are zeroing in on climate risk solutions, says Peter Miller, president and CEO of The Institutes, a not-for-profit in Malvern, Pennsylvania, with expertise in risk management and insurance.

Global reinsurers, for example, are investing heavily in climate research and modelling capabilities to assist insurance brokers in developing specialized climate advisory services that help clients understand and mitigate their exposures. Industry associations are creating frameworks for climate risk disclosure and management while insurance technology firms are introducing data analytics and parametric products for climate perils. And ratings agencies continue to weave climate considerations into their assessment methodologies.

“The industry recognizes climate change as a systemic risk that requires significant adaptation,” says Miller. “Continuing business as usual would lead to market disruptions and coverage gaps. Industry leaders view climate change as a transformational force rather than just another risk factor. They’re investing in capabilities to understand, price, and manage climate risks while engaging with policyholders on adaptation measures.”

In the wake of a natural disaster, insurers are the “financial first responders,” says Dale Porfilio, chief insurance officer at the Insurance Information Institute (Triple-I), an insurance trade association. “We are here for that risk transfer and to make people whole.” Yet, the greater frequency and severity of natural disasters—from floods to hurricanes to wildfires—along with increased repair and rebuilding costs is spurring insurers in the US to collectively reassess their risk appetite for residential property.

“Can we continue to insure every single house in the way that we once did, based on the cost and the relative risk?” says Porfilio. As a risk-based product, policyholder premiums must reflect what losses are expected to be in the upcoming year. “Pulling out of a market is not a decision that anyone is going to make lightly.”

State insurance commissioners in the US, who can be elected officials, direct greater scrutiny to the pricing of residential property, he adds. Homes located along coastlines and waterways and in hills and canyons frequently carry greater exposure to natural disaster risks than commercial properties, which tend to be located inland and closer to central transportation areas.

Organizational Deep Dive

Risk managers and insurance brokers are reaching out directly to these corporate clients with new products and expertise to help them understand climate adaptation and manage their risks.

“We help organizations become resilient to extreme weather, now and for the future, by leveraging our suite of climate adaptation capabilities,” says Nick Faull, London-based head of climate and sustainability risk at Marsh, a global insurance broker and risk management advisor. Marsh counsels executives to consider extreme weather events on two levels: assets and systems.

“How will assets, including buildings, people, and operations as well as emergency response processes, be impacted?” Faull says. Secondly, managers must determine how extreme weather events will impact the broader organization: “particularly through the impacts on suppliers but also on critical infrastructure, resources and ecosystem services, customers, and on the communities in which it operates. In addition, what impact will be changing regulations and capital provider expectations have?”

By comprehensively monitoring their supply chains—Marsh’s parent, Marsh McLennan, offers an AI-powered tool called Sentrisk—companies can better prepare for extreme weather events. As an example, Faull cites a UK company that learned a supplier, deep in its supply chain in Southeast Asia, was at high risk of flooding, leaving the company exposed to significant disruption.

“With better information, the company is able to build resilience into its supply chain to avoid future disruption,” he says.

In collaboration with Floodbase, a parametric flood expert, and Swiss Re Corporation Solutions, Aon launched a parametric insurance solution in February that promises to address and mitigate losses from hurricane-related storm surges along the US coast using a range of meteorological data sources. Rather than aligning pay-outs to traditionally adjusted physical damage, like an indemnity insurance product, Aon bases them on water height. Policyholders can select the level of pay-out they require for a certain level of storm surge, with a rate calculated accordingly. The proceeds can be used for any financial loss associated with the event, addressing a substantially broader set of exposures than traditional insurance.

Hurricane Helene was the single most devastating natural catastrophe of 2024, according to Aon’s 2025 Climate and Catastrophe Insight report, responsible for approximately $75 billion in economic losses, mainly due to US inland and coastal flooding. A parametric solution helps bolster existing levels of cover and provides liquidity, says Cole Mayer, head of parametric solutions at Aon. Used as a standalone product or with traditional and non-traditional insurance policies, it offers corporates more comprehensive protection, he says, noting that for some hurricane events, storm surge damage can account for more than one-third of the total loss cost. The industry is also turning to conservation groups and governments as key collaborative partners.

In Canada, Nature Force, which includes 15 insurers and Ducks Unlimited Canada, has invested in wetland restoration to reduce flood risk in urban communities, says Golnaraghi. Local and state governments can focus on risk-based land zoning, enforce updated building codes, and promote fortified building certification. Federal and national governments, in turn, can lay down standards of resilience that local and state officials must meet in their post-disaster aid programs and place a priority on constructing large-scale resilient infrastructure.

“Governments at all levels are crucial in scaling local resilience and collaborating with the insurance industry,” Golnaraghi says. “Together, they can develop a shared vision for hazard-prone areas where insurance challenges are rising due to an increase in unmitigated risks linked to growing exposure and vulnerability.”

Lebanon’s Parliament last month partly lifted banking secrecy laws in a rare move to encourage transparency and revive the nation’s scattered economy.

Since the 2019 financial collapse that brought the war-torn country to its knees, banking sector reform has been a prerequisite for obtaining help from multilateral lending institutions. The new law allows entities, including independent auditors, to directly access banking records from the past decade.

“The banking secrecy bill is a tool,” comments Sibylle Rizk, director of public policies at Kulluna Irada, a Beirut-based think tank. “Now it needs to be used: whether by banking authorities for restructuring the sector, by the judiciary, or by the tax administration.”

Since the 2019 crash, the local currency has dropped 98% in value and most Lebanese cannot access their deposits. Bank losses are estimated at $76 billion, raising the critical question: Who will pay?

Producing an answer that satisfies a multitude of parties now falls partly on Karim Souaid, governor of Banque du Liban since March. Souaid’s nomination was controversial, having allegedly been urged by the banks’ lobby.

On his first day in office, he emphasized the need to “gradually return all bank deposits, starting with small savers.”

But the new governor’s immediate priority must be “to launch banking audits to get an accurate picture of assets and liabilities,” says Rizk. “He also needs to work on a gap resolution framework based on a fair distribution of losses that considers public debt sustainability.” Legal frameworks on bank resolution and loss allocation must be approved by Parliament.

None of these reforms will be easy, she adds, but they are key to unlocking negotiations with the International Monetary Fund, reestablishing the banking sector’s ability to fund economic activity, and taming the cash economy, which has dominated since 2020. Last October, the watchdog Financial Action Task Force (FATF) placed Lebanon on its gray list for money laundering and terrorism financing.

“The Lebanese banking sector must reconnect with the international financial system, rebuild relationships with correspondent banks, regain access to global capital markets, and re-establish credibility,” says Wissam Fattouh, secretary of the Beirut-based Union of Arab Banks.

But to restore their reputation and ensure solvency, Lebanese banks will need new partners. Existing shareholders may increase stakes, but regional and international banks must step in as well.

A brief easing of tariffs between the US and China has set off a burst of transpacific trade activity, but deeper tensions and long-term supply chain disruptions continue to cloud the outlook.

A 90-day truce in the ongoing US-China trade war has sparked a rush to move goods across the Pacific, with businesses scrambling to take advantage of temporarily lowered tariffs.

President Donald Trump essentially backed down on a trade war that he started with China, reducing US duties on Chinese imports from a punishing 145% to 30%. China, meanwhile, slashed its tariffs on American goods from 125% to 10%.

The short-term relief is already creating ripple effects as container carriers like Marseille, France-based CMA CGM and Hamburg, Germany-based Hapag-Lloyd reportedly praised the pause and expect to see a spike in bookings as businesses try to ship before the temporary pause ends.

“You weren’t going to be shipping anything from China to the US at 145%,” David Roche, president of financial analysis firm Quantum Strategy in Singapore, told Global Finance. “At 30%, something gets shipped—but far less than when we were at 8% before Trump took office.” Roche noted that a modest uptick in container traffic might soon appear in Port of Los Angeles bookings, which reflect demand about three weeks out.

But he cautioned: “My feeling is that we will see a small recovery, but not a big recovery, and you will still have empty shelves, and you will still have increased inflation in the US as a result of these tariffs.”

April inflation data offered a mixed picture. While year-over-year inflation cooled slightly to 2.3%—just under the 2.4% forecast—prices still rose 0.2% month-over-month, missing estimates of 0.3%. Core inflation, excluding volatile food and energy prices, held steady at 2.8%.

The scenario looks less bleak compared to last month when Fitch Ratings downgraded its 2025 global GDP forecast to 1.9% amid concerns about Trump’s escalating tariff policy. The firm’s chief economist, Brian Coulton, said in an analyst note on Tuesday that while the latest 90-day pause brings the US effective tariff rate down from 23% to 13%, it’s still far above the 2.3% level seen in 2024.

This does not mean that the trade war, “which is already having a tangible economic impact, is over,” Coulton said, citing remaining 10% baseline tariffs and industry-specific levies still in force.

US Treasury Secretary Scott Bessent insists the US-China talks are part of a broader strategy of “economic decoupling for strategic necessities.” He emphasized that “generalized decoupling” is not US policy, but the administration remains focused on import substitution to reduce reliance on Chinese goods and bolster American manufacturing.

Even with the recent rollback, China remains the US’s most heavily tariffed trading partner. According to Fitch, the current ETR for Chinese imports stands at 31.8%, factoring in legacy duties on steel, autos, and a 10% baseline tariff applied broadly. Certain electronics like smartphones and computers were excluded from the most recent round of tariffs.

While the temporary deal may cool tensions and boost transpacific shipping in the short run, experts warn that the structural damage to global supply chains—and the strategic rift between the world’s two largest economies—is unlikely to heal in just 90 days.

Analysts for Singapore-based UOB Group struck a more optimistic tone following the pause in US-China trade tensions, forecasting a near-term economic boost for China as exporters rush to front-load production and shipments to the US during the window.

“Suffice to say, we now see some upside potential to our 2025 growth forecast for China of 4.3%,” UOB analysts said in a note, though they said that any formal revision will wait for further data. Despite the temporary reprieve, UOB expects China to continue focusing on domestic resilience and export diversification, supported by ongoing policy efforts.

A brief easing of tariffs between the US and China has set off a burst of transpacific trade activity, but deeper tensions and long-term supply chain disruptions continue to cloud the outlook.

A 90-day truce in the ongoing US-China trade war has sparked a rush to move goods across the Pacific, with businesses scrambling to take advantage of temporarily lowered tariffs.

President Donald Trump essentially backed down on a trade war that he started with China, reducing US duties on Chinese imports from a punishing 145% to 30%. China, meanwhile, slashed its tariffs on American goods from 125% to 10%.

The short-term relief is already creating ripple effects as container carriers like Marseille, France-based CMA CGM and Hamburg, Germany-based Hapag-Lloyd reportedly praised the pause and expect to see a spike in bookings as businesses try to ship before the temporary pause ends.

“You weren’t going to be shipping anything from China to the US at 145%,” David Roche, president of financial analysis firm Quantum Strategy in Singapore, told Global Finance. “At 30%, something gets shipped—but far less than when we were at 8% before Trump took office.” Roche noted that a modest uptick in container traffic might soon appear in Port of Los Angeles bookings, which reflect demand about three weeks out.

But he cautioned: “My feeling is that we will see a small recovery, but not a big recovery, and you will still have empty shelves, and you will still have increased inflation in the US as a result of these tariffs.”

April inflation data offered a mixed picture. While year-over-year inflation cooled slightly to 2.3%—just under the 2.4% forecast—prices still rose 0.2% month-over-month, missing estimates of 0.3%. Core inflation, excluding volatile food and energy prices, held steady at 2.8%.

The scenario looks less bleak compared to last month when Fitch Ratings downgraded its 2025 global GDP forecast to 1.9% amid concerns about Trump’s escalating tariff policy. The firm’s chief economist, Brian Coulton, said in an analyst note on Tuesday that while the latest 90-day pause brings the US effective tariff rate down from 23% to 13%, it’s still far above the 2.3% level seen in 2024.

This does not mean that the trade war, “which is already having a tangible economic impact, is over,” Coulton said, citing remaining 10% baseline tariffs and industry-specific levies still in force.

US Treasury Secretary Scott Bessent insists the US-China talks are part of a broader strategy of “economic decoupling for strategic necessities.” He emphasized that “generalized decoupling” is not US policy, but the administration remains focused on import substitution to reduce reliance on Chinese goods and bolster American manufacturing.

Even with the recent rollback, China remains the US’s most heavily tariffed trading partner. According to Fitch, the current ETR for Chinese imports stands at 31.8%, factoring in legacy duties on steel, autos, and a 10% baseline tariff applied broadly. Certain electronics like smartphones and computers were excluded from the most recent round of tariffs.

While the temporary deal may cool tensions and boost transpacific shipping in the short run, experts warn that the structural damage to global supply chains—and the strategic rift between the world’s two largest economies—is unlikely to heal in just 90 days.

Analysts for Singapore-based UOB Group struck a more optimistic tone following the pause in US-China trade tensions, forecasting a near-term economic boost for China as exporters rush to front-load production and shipments to the US during the window.

“Suffice to say, we now see some upside potential to our 2025 growth forecast for China of 4.3%,” UOB analysts said in a note, though they said that any formal revision will wait for further data. Despite the temporary reprieve, UOB expects China to continue focusing on domestic resilience and export diversification, supported by ongoing policy efforts.