Trade tensions and AI reshape global markets with new investment shifts

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1. https://kalkinemedia.com/au/news/market-updates/discover-how-tariffs-conflict-and-ai-are-reshaping-markets - Please view link - unable to able to access data
2. https://apnews.com/article/0dfd480d5cee52ff39b369b7c781695d - The World Trade Organization (WTO) has warned that global trade in goods could decrease by 0.2% in 2025 due to U.S. President Donald Trump's evolving tariff policies and ongoing trade tensions with China. The drop could be much steeper—up to 1.5%—if the U.S. implements its most severe proposed tariffs. North America is expected to be hardest hit, with forecasts indicating a 12.6% fall in exports and a 9.6% decline in imports. Although Trump has paused the harshest tariffs for 90 days to allow negotiations with over 70 countries, he has already raised tariffs on Chinese imports to 145% and is in ongoing trade disputes with Canada and Mexico. WTO Director-General Ngozi Okonjo-Iweala and chief economist Ralph Ossa emphasized the damaging effects of trade policy uncertainty on global economic activity, especially for vulnerable economies. The WTO had initially anticipated trade growth in 2025 and 2026, but has revised expectations downward due to shifting U.S. trade policy.
3. https://apnews.com/article/d15febaaaab65c7df8538cce170231eb - The International Monetary Fund (IMF) has projected that the recent surge in U.S. tariffs will weaken global economic growth and push inflation higher in 2025, though it does not expect a global recession. Kristalina Georgieva, IMF Managing Director, highlighted that increased tariffs from the Trump administration have spiked uncertainty in global financial markets, particularly affecting Wall Street. She warned that trade barriers and supply chain disruptions contribute to rising costs and economic sluggishness, though domestic production gains could occur over time. Georgieva emphasized the need to reduce tariffs and revive global trade collaboration, arguing that trade imbalances fuel perceptions of unfairness. Previously, in January, the IMF forecasted global growth of 3.3% for 2025, up slightly from 3.2% in 2024, with inflation projected to decline. However, these forecasts are expected to be revised downward due to escalating trade tensions, especially between the U.S. and China. The IMF noted that Trump's tariff policies are likely to raise inflation and induce further volatility. The full updated outlook is set to be released the following Tuesday. The IMF, a 191-nation organization, continues to advocate for policies that enhance global economic stability and reduce poverty.
4. https://www.mckinsey.com/capabilities/geopolitics/our-insights/a-new-trade-paradigm-how-shifts-in-trade-corridors-could-affect-business - Trade routes face high variability in growth under different scenarios, with one-third of global trade potentially exposed to volatility by 2035. The global trade system is in flux. Since 2017, economies have traded less with geopolitically distant partners. Recent announcements on tariffs, trade, and industrial policy have deepened uncertainty. Trade will grow by $12 trillion by 2035 in a baseline scenario. The trade increase would boost today’s global trade value by about 35 percent, to $45 trillion. In a diversification scenario (in which companies seek new sources of supply), about $1 trillion of that growth might not be realized. In a fragmentation scenario (in which geopolitically distant economies trade less), about $3 trillion of it could be lost. Depending on the scenario, over 30 percent of global trade in 2035 could swing from one trade corridor to another. Yet we note that the metric is retrospective and does not anticipate potential shifts in geopolitical alignment, which may be dynamic and evolving. Secular changes in trade patterns can be detected through shifts in trade corridors—the connections between countries to exchange goods, services, and resources. Our research finds that in a baseline scenario with tariffs at recent historical levels, global trade of goods, services, and resources would grow by about $12 trillion in real terms to $45 trillion by 2035, up from $33 trillion in 2024. We also examine two out of many possible scenarios, both intended to bound uncertainty rather than to describe a precise future. In a fragmentation scenario, trade relationships deteriorate, and tariffs on most goods rise to 10 percent, with tariffs on critical goods traded between many advanced economies and China and Russia rising by up to 60 percent. Should that scenario unfold, about $3 trillion of the nearly $12 trillion in growth would be lost. On the other hand, in a diversification scenario, in which businesses prize resilience and diversify their suppliers, about $1 trillion in potential trade growth would be foregone.
5. https://www.mckinsey.com/featured-insights/week-in-charts/global-trade-shifts - Trade between Mexico and the United States rose from approximately $400 billion to $490 billion, with a compound annual growth rate (CAGR) of 10.8%. Similarly, trade between Canada and the United States increased from about $380 billion to $440 billion, with a CAGR of 7.7%. Conversely, trade between China and Hong Kong (Special Administrative Region) declined from around $350 billion to $280 billion, with a CAGR of -11.0%. These shifts highlight the dynamic nature of global trade relationships and the impact of various factors, including tariffs and geopolitical tensions, on trade volumes and growth rates.
6. https://www.csis.org/analysis/ai-needs-its-complements-investing-next-wave-innovation - While today’s technologies have advanced far beyond steam engines, the principles of cross-technological integration and diffusion remain just as critical. Massive Investment in Improving AI and Addressing Its Effects Is Critical. U.S. investment in AI technologies has increased to an unprecedented amount. In 2024, U.S. corporate investments reached $252.3 billion, 13 times what they were just a decade earlier. Just four U.S. companies plan to spend over $350 billion on AI-related data centers in 2025 alone. This surge underscores how central AI has become to U.S. technological competitiveness. The Trump administration has reinforced this commitment through the AI Action Plan, continued implementation of the CHIPS Act, and the U.S. Department of Energy’s vast increase in funding for AI for scientific research. In July, the Trump administration also signed an executive order to facilitate the development of AI data centers.
7. https://www.odgers.com/en-us/insights/international-trade-and-its-impact-on-global-manufacturing/ - As of May 2025, global trade remains turbulent amid ongoing tariff conflicts and retaliatory measures, underscoring a continued shift toward protectionism. While the United States maintains a 10% baseline tariff on most imports, it has temporarily reduced tariffs on Chinese goods from 145% to 30% for a 90-day period to facilitate trade negotiations. Tariffs on Canada and Mexico remain at 25%, though exemptions apply under the USMCA, particularly for energy imports. Other key partners such as India, Japan, and South Korea face tariffs ranging from 17% to 50%. In turn, countries like China, Canada, and the European Union have enacted their own retaliatory tariffs—targeting U.S. goods from agricultural products to industrial components. China has also introduced export controls on critical minerals. These actions are intensifying supply chain disruptions, driving up costs, and pressuring inventory availability.