Global financial markets are navigating a storm of economic slowdowns, rising geopolitical tensions, and shifting corporate expectations. From Australia’s sluggish GDP to Trump’s aggressive tariff measures, a range of developments are shaping the economic landscape this week.

Australia Misses Growth Estimates Amid Broader Slowdown

Australia’s economy stumbled in the first quarter of 2025, with GDP growth slowing to just 1.3% year-over-year—well below expectations. The soft data raises concerns about global demand and commodity-driven economies amid tightening financial conditions and uncertainty around trade.

Germany Targets Growth With €46B in Corporate Tax Cuts

Meanwhile, Germany is taking proactive fiscal steps to breathe life into its economy. Berlin unveiled a €46 billion corporate tax cut plan aimed at reviving domestic investment and competitiveness. However, looming concerns over supply chain security surfaced again, as the German auto industry warned that China’s rare earth export restrictions could grind production to a halt.

Trade War Heats Up: Trump’s Tariffs Go Into Effect

In a major escalation, former U.S. President Donald Trump ordered a dramatic 50% tariff on steel and aluminum imports to take effect June 4. The move has already stirred diplomatic panic, with the UK scrambling to secure a last-minute deal to prevent its exporters from being hit by the new levies.

The OECD has warned these tariffs could suppress global growth, while Fed Governor Austan Goolsbee noted the tariffs might stoke inflation more rapidly than they dampen economic activity. The Bank of Canada is expected to hold interest rates steady amid these growing uncertainties.

Mixed Signals From Corporate America

Despite the trade turbulence, some U.S. companies are riding the wave. Nvidia has surged past Microsoft to become the most valuable publicly traded company, a landmark moment that highlights the ongoing strength of the AI and semiconductor sectors.

Palantir shares jumped on what analysts are calling “Trump momentum,” as investors bet on increased defense and surveillance spending under his influence. In contrast, cybersecurity firm CrowdStrike saw its shares tumble after issuing a disappointing sales forecast.

Retailers and hardware providers are recalibrating expectations as well:

• Dollar General raised its outlook after reassessing tariff impacts more favorably than initially feared.
• HPE boosted its fiscal-year profit forecast, citing exemptions from key tariff categories.

Political & Policy Turmoil Continues

The UK Chancellor is defending a sweeping investment plan amid criticism that the government is avoiding difficult spending cuts. Across the Atlantic, Israel’s foreign aid package has hit political gridlock after escalating violence on the ground raised international concerns.

What’s Next?

As the Bureau of Labor Statistics moves to correct minor discrepancies in April’s jobs data, market participants are bracing for more volatility. The global economy is showing signs of fragmentation: bold fiscal moves in Europe, rising protectionism in the U.S., and uncertainty in Asia paint a complex picture.

With inflation risks still looming and trade tensions showing no signs of abating, policymakers and investors alike face a difficult balancing act in the weeks ahead.