Markets around the world are bracing for impact after former U.S. President Donald Trump announced plans to double steel and aluminum tariffs to 50%. The aggressive trade stance marks a potential turning point in U.S. economic policy, as Trump simultaneously positions himself for a return to the global stage and reignites trade tensions with China and other major partners.

Adding to the global unease, an Iranian diplomat signaled that Tehran is prepared to reject a new U.S. nuclear proposal. The diplomatic standoff threatens to further destabilize an already volatile Middle East, with knock-on effects for energy prices and global security dynamics.

Trade Turbulence on the Horizon

In parallel with Trump’s tariff announcement, China responded with sharp criticism, accusing the U.S. of “seriously violating” trade agreements. Despite these tensions, some analysts remain cautiously optimistic. SkyBridge Capital CIO Brett Bessent expressed confidence that the finer points of U.S.-China trade relations would be “ironed out” following private talks between Trump and Chinese President Xi Jinping.

The uncertainty hasn’t gone unnoticed in the currency markets. Morgan Stanley now predicts a 9% decline in the U.S. dollar, citing growing bets on a slowdown in American economic growth. The Federal Reserve seems to be signaling the same, with Governor Christopher Waller outlining a possible path to rate cuts later this year.

Central Banks and Economic Indicators

In Europe, the economic landscape is offering mixed signals. The Eurozone’s manufacturing PMI reached a 33-month high, suggesting industrial resilience, even as Germany announced plans for corporate tax breaks to stimulate further investment.

In the UK, Bank of England policymaker Megan Breeden acknowledged signs of a loosening labor market, but this hasn’t stopped the housing sector from heating up. British house prices rose in May, buoyed by stronger wage growth and consumer confidence.

Meanwhile, the UK government is planning a £15 billion investment in its nuclear warhead program and next-generation attack submarines, indicating a renewed focus on defense in a turbulent geopolitical environment.

Energy, M&A, and Pharma Moves

OPEC+ added to the economic drama by announcing a sharp increase in oil production starting in July, a move that could reshape global energy markets over the summer. Goldman Sachs adjusted its outlook accordingly, now forecasting a final hike in August.

In the corporate world, deal-making remains robust. Sanofi will acquire immunology biotech Blueprint for $9.1 billion, while Bristol-Myers Squibb struck a potential $11.1 billion cancer treatment deal with BioNTech. AstraZeneca also made headlines with its breast cancer pill, which has been shown to delay disease progression by more than six months.

Tech and industrial giants are also making strategic plays. Samsung is reportedly nearing a broad partnership with Perplexity to integrate AI features across its product lines. Meanwhile, potential bidders for BP’s Castrol unit are submitting offers below the expected $8 billion valuation, suggesting cautious investor sentiment amid shifting energy priorities.

Political Power Shifts

Poland’s presidential election delivered a win for a pro-Trump nationalist candidate, signaling a continued rightward shift in parts of Europe. At the same time, Japan’s Akazawa is rumored to be preparing a diplomatic visit to the U.S., possibly to reinforce security and trade ties.

And in Ukraine, Kyiv and Moscow are reportedly set to hold fresh talks following a provocative drone attack allegedly orchestrated by Ukrainian forces—adding another layer of complexity to the ongoing conflict.

Outlook

As global economies grapple with slowing growth, shifting alliances, and geopolitical uncertainty, investors and policymakers alike are entering a period of heightened vigilance. Whether this moment will lead to a recalibration of global cooperation or deeper division remains to be seen—but the signals suggest that major transformations are underway.