US allies warns of economic consequences of the trade war

US allies warns of economic consequences of the trade war

Another day, another piece of proof that President Donald Trump's increasing trade war affects the global economy with friends and enemies. Today: The Japanese central bank has halved its business forecast for the country.

The forecast of the Bank of Japan

The Japan bank lowered its expectations for gross domestic product (GDP) in 2025 to a meager 0.5 % after the earlier forecast of +1.1 % was made in January. The growth forecast for the next year was also reduced to 0.7 %, previously it was +1.0 %.

prospects for Japan's economy

"Japan's economic growth is expected to be more moderate, since commercial and other guidelines lead to a slowdown in the overseas economy and a decline in domestic corporate profits and other factors," explained the Japanese central bank in a communication .

uncertainty by the trade war

However, the bank found that the constant ups and downs in the trade war clouded its forecasts. "It is extremely uncertain how trade and other guidelines will develop in every area and how the economic activities and prices abroad will react to it," said the explanation.

negotiations on trade agreements

Japan is at the top of the list of countries with which the Trump administration negotiates a trade agreement. During a Town Hall event by Newsnation on Wednesday, Trump said that he had achieved "potential" trade agreements with Japan, South Korea and India that would replace the draconian "mutual" tariffs, although he did not reveal any details about these new agreements.

Trump’s attitude to trade agreements

Trump, however, excluded the urgency of trade agreements and noticed: "You want us. We don't need it." He also emphasized that he was not in a hurry to conclude any agreement.

complexity of the negotiations

It is highly unlikely that the United States and Japan, although allies can quickly achieve a complex new trade agreement. Nevertheless, the Trump administration has repeatedly stated that it is actively in discussions with more than a dozen countries and expects some declarations of intent to disclose the negotiation conditions for revised trade agreements in the coming days and weeks.

report on the impact of the trade war

The forecast of Japan came one day after the US Ministry of Trade reported that the trade war reported that the affected, which led to a slight shrinkage of the American economy in the first quarter. Consuming expenses decreased during the quarter and the companies imported in front of the tariffs. As a result, imports exceeded exports, which slowed down GDP growth.

Also reported on Wednesday China in April at the fastest pace since 16 months, Due to the massive tariffs of the United States on its goods and the considerable retaliation duties of China on American imports.

warning of the International Monetary Fund

the International Monetary Fund warned last month that the global trade war will inhibit the growth, especially in the United States.