The global economy is responding to Trump's tariffs with faster rate cuts and subsidies.

As the tariff policies of the Trump administration continue to impact the global economy, several countries have begun taking emergency measures to stabilize their economies, with expectations these measures will accelerate in the coming months. One of the biggest challenges facing the global economy is how to cope with the risk of economic slowdown caused by Trump's tariffs, particularly amidst heightened trade and financial market volatility.

Recently, central banks in India, New Zealand, and the Philippines have implemented interest rate cuts, and more central banks are expected to follow suit in the coming days. In addition, the South Korean government announced a $2 billion emergency support plan aimed at supporting the domestic automotive industry through loans, tax reductions, and subsidies. Other countries like Spain, Australia, and Canada have also taken measures to encourage consumers to buy domestic products and reduce imports to support struggling domestic businesses.

In response to U.S. tariffs, Canada announced retaliatory tariffs of 25% on approximately 67,000 U.S.-made vehicles, with funds raised expected to compensate affected auto workers and parts companies. Additionally, the Canadian government has introduced measures to support affected sectors, including simplifying unemployment insurance procedures, extending corporate tax payment deadlines, and providing more loans to businesses.

In Europe, Spanish Prime Minister Sánchez announced an approximately $16 billion industry aid plan to help domestic companies deal with the impact of U.S. tariffs. British Prime Minister Starmer also stated that the changes in global trade demand the UK to accelerate economic restructuring, promising more support for car manufacturers to alleviate tariff burdens.

Currently, central banks worldwide are stepping up monetary policy measures to tackle tariff impacts. The European Central Bank is expected to cut interest rates soon to relieve the pressure on the eurozone economy from tariffs. The Bank of Canada needs to weigh the timing of a rate cut, as Trump's tariffs have already negatively impacted business investment and consumer spending, yet inflation expectations remain high.

Meanwhile, challenges facing the U.S. economy are intensifying. Surging Treasury yields, plunging stock markets, and a weakening dollar have heightened market concerns over the Federal Reserve's policy direction. Federal Reserve Chairman Powell is expected to speak soon, providing the latest assessment of the U.S. economy and potential clues about rate cuts.

Overall, Trump's tariff policies have not only affected global economic growth but also forced governments worldwide to expedite policy adjustments, employing rate cuts, subsidies, and other support measures to mitigate economic downturn risks. However, as market uncertainty increases, whether the global economy can successfully avoid recession still depends on the effectiveness of these policies and the possibility of reaching international trade agreements to ease tensions.

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.