Malaysia faces potential transformation into a terrorist transit center as IS-linked Bangladeshis recruit migrant workers through social media platforms.

Malaysia faces potential transformation into a terrorist transit center as IS-linked Bangladeshis recruit migrant workers through social media platforms.

In the midst of 2025, President Donald Trump's tariff strategy has been significantly impacting global trade and the economy. The Federal Reserve is now expected to cut interest rates twice before the end of the year, a move that could be linked to the economic uncertainties caused by the tariffs.

Analysts have warned of potential sporadic layoffs in some industries in the coming months, with the flow of potential workers out of the labour force rising sharply in June. However, the unemployment rate in the US dipped to 4.1% in June, suggesting a resilient labour market despite warnings about Trump's tariffs.

The tariffs, aimed at protecting U.S. industries and addressing trade imbalances, have provoked retaliatory measures, market instability, and inflationary pressures worldwide. For instance, the imposition and threat of tariffs have triggered stock market declines, particularly affecting sectors like retail and automotive manufacturing. Economists warn that these tariffs could lead to heightened inflation in the U.S. by raising import costs, harming smaller companies unable to absorb the tariffs, and potentially disrupting supply chains.

The trade tensions and reciprocal tariffs have strained relations with key U.S. trading partners like Canada, Mexico, and the EU, threatening decades of free trade expansion and leading to uncertainty in global trade frameworks. Legal challenges have also emerged, with a U.S. court ruling many Trump-era tariffs illegal in May 2025, though appeals are pending.

Trump's tariff strategy involves broad import duties targeting steel, appliances, and various goods from Canada, Mexico, the EU, Zimbabwe, China, and other countries. The imposition of 18% tariffs on Zimbabwean goods, for example, led Zimbabwe to scrap all tariffs on U.S. goods to improve bilateral relations. China, on the other hand, has agreed to a framework for tariff reductions and product shipments with the United States, but the deadline for avertion of steep tariffs set by Trump for July 9 remains a source of uncertainty.

As governments around the world actively try to hammer out deals with Washington to avoid the tariffs, only Britain and Vietnam have signed tariff-related pacts so far. The passage of Trump's "Big, Beautiful Bill" left investors in a quandary, as it includes a US$5 trillion increase in the debt limit, reducing the risk of the country defaulting on its bond payments.

The US economy added 147,000 jobs in June, a positive sign despite the economic uncertainties. However, the uncertainty surrounding the tariff deadline has tempered the positive lead from a record on Wall Street. Stock markets in Tokyo, Shanghai, Sydney, Wellington, and Jakarta edged up, while Hong Kong, Seoul, Singapore, Taipei, and Manila fell.

Amidst these economic challenges, Trump plans to send letters to trading partners informing them of their tariff rates, starting as early as tomorrow, at a rate of approximately 10 per day. The first interest rate cut is likely to occur in September, a move that could help stabilise the economy amidst the ongoing tariff tensions.

1. The economic uncertainties caused by President Donald Trump's tariff strategy may lead to potential sporadic layoffs in certain industries, as analysts have warned.
2. The Federal Reserve, in response to these economic uncertainties, is expected to cut interest rates twice before the end of the year to help stabilize the economy.
3. Economists warn that Trump's tariffs could lead to heightened inflation in the U.S., raising import costs and potentially harming smaller companies unable to absorb the tariffs.
4. The trade tensions and reciprocal tariffs have strained relations with key U.S. trading partners, threatening decades of free trade expansion and leading to uncertainty in global trade frameworks.
5. As governments around the world try to hammer out deals with Washington to avoid the tariffs, only Britain and Vietnam have signed tariff-related pacts so far, leaving many other countries in a state of uncertainty regarding their tariff rates.

Read also: