Overview

• President Trump announced a plan to double tariffs on steel and aluminium to 50%, reigniting tensions with China and global trade volatility.
• IMF’s Gita Gopinath cautioned that the trade war poses a greater challenge for emerging markets than the Covid-19 shock due to uneven tariff impacts.
• The asymmetric economic shocks from tariffs are splitting central banks between cutting rates to support growth and raising them to defend currencies.
• OECD highlighted rising borrowing costs and capital flight risks in emerging economies and trimmed India’s FY26 growth forecast to 6.3%.
• India’s Reserve Bank is widely expected to cut the repo rate on June 6 to shore up weak domestic demand in the face of tightening global financial conditions.