Growth in China, the world's second largest economy, and in Europe is expected to be hit by the announcement of new tariffs by the Donald Trump administration, while the impact on growth in the US will be limited, according to Goldman Sachs.
This month, the US announced a 10 per cent duty on all goods imported from China into the US.
It also ordered a 25 per cent import tax on all steel and aluminium entering the US, set to take effect on March 12, while delaying tariffs on Mexico and Canada by a month.
"We would expect that growth in the US would probably slow by a quarter point or so," Joseph Briggs, who co-leads the global economics team at Goldman Sachs Research, said on Friday. "And furthermore, some of the more pro-growth parts of President Trump's agenda should provide offsets that leave the net impact on GDP (gross domestic product) somewhat neutral."
Wall Street indices were mixed at the end of the session on Friday, with the S&P 500 near flat and Nasdaq Composite up by 0.4 per cent as traders tracked tariff announcements and the US economic data, which showed inflation ticking up in the world’s largest economy.
The Dow Jones Industrial Average closed down by 0.4 per cent.
On Thursday, Mr Trump also directed commerce and economic officials to study reciprocal tariffs on nations that impose duties on American goods, with their recommendations due by April 1.
He also threatened a 100 per cent tariff on Brics countries if they decide to replace the US dollar as their reserve currency.
“We do expect bigger headwinds in China. They have been the target of most of the hawkish trade news recently. We have seen 10 percentage point tariffs already implemented … we are expecting another 10 percentage points, and under that scenario, we expect that growth this year will probably be about 70 basis points lower than it would have been otherwise,” Mr Briggs said.
China's economy is forecast to grow by 4.6 per cent in 2025, according to a recent analysis by the International Monetary Fund. The country’s economy recovered slowly following the coronavirus pandemic, with the government unveiling a series of stimulus packages in support.
Europe is also expected to be hit by US trade policies and is projected to record slower growth this year.
“If you are a German exporter and you're seeing growth slow in China and you're worried about tariffs on the EU, then you're probably not going to be scaling up hiring or undertaking large capital investments until you have clarity around the business environment that you're going to be operating in,” Mr Briggs said.
“So, during the last trade war, we saw that this type of dynamic slowed growth in the euro area probably by about a point. We expect that a similar dynamic is going to play out this time. It's the reason why, the day after Trump's election, we took down our European growth forecast by half a point, and are still forecasting a well-below-consensus pace of growth of 0.7 per cent in the euro area this year.”
In Europe, London's FTSE 100 closed 0.4 per cent lower, while Paris' CAC 40 gained 0.2 per cent. Frankfurt's DAX was down 0.4 per cent when markets closed on Friday on concerns related to economic slowdown in Europe.
The IMF forecasts the euro area to grow by 1 per cent this year in its world economic outlook in January.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Isle of Dogs
Director: Wes Anderson
Starring: Bryan Cranston, Liev Schreiber, Ed Norton, Greta Gerwig, Bill Murray, Jeff Goldblum, Scarlett Johansson
Three stars
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
UAE central contracts
Full time contracts
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Part time contracts
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What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
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Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Company: Rent Your Wardrobe
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Based: Dubai
Sector: Clothes rental subscription
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Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
