Week 11 (March 10-16, 2025)
U.S. Economic Developments
Here are the key US economic developments from the past week:
Inflation easing: The Consumer Price Index (CPI) for February showed inflation easing to 2.8%, lower than expected. This represents a decrease from January's 3% rate.
Core inflation: Core CPI, which excludes volatile food and energy prices, decreased to 3.1% in February from 3.3% in January.
Consumer sentiment plunge: The University of Michigan's consumer sentiment index fell sharply to 57.9 in March, the lowest level since November 2022, reflecting increased economic uncertainty.
Inflation expectations: Long-term inflation expectations jumped in March, with consumers anticipating an annual inflation rate of 4.9% for the next year.
Economic outlook: Despite recent challenges, the US economy entered 2025 with significant momentum. Consumer spending grew at a 4.2% annual rate in the fourth quarter of 2024.
GDP forecast: The Conference Board forecasts real GDP growth of 2.3% for 2025, with stronger growth expected in the first half of the year.
Federal Reserve: The Fed is scheduled to meet in the coming week, with no changes to interest rates expected according to consensus.
Tariff concerns: There are growing worries about the economic impact of President Trump's trade policies, with proposed tariff increases potentially equivalent to a tax increase of 0.5% to 1.0% of US GDP.
These developments suggest a mixed economic picture, with inflation showing signs of moderation but consumer sentiment deteriorating amid policy uncertainties.
U.S. Tariffs
President Donald Trump's macroeconomic policies for his 2025 administration are characterized by a strong "America First" approach, focusing on protectionist trade measures, tax cuts, deregulation, and efforts to balance the federal deficit. Here are the key aspects of Trump's macroeconomic policy.
As of March 16, 2025, the United States has implemented several significant tariff changes affecting imports from various countries. Here's an overview of the current tariff situation:
China
A 20% tariff on all imports from China is now in effect.
This includes a 10% tariff imposed on February 4, 2025, and an additional 10% tariff implemented on March 4, 2025.
Canada and Mexico
25% tariffs on imports from Canada and Mexico took effect on March 4, 2025.
Temporary exemptions include:
Auto imports (until April 2, 2025)
USMCA-compliant imports (until April 2, 2025)
For Canada specifically:
10% tariff on energy resources and critical minerals
50% tariff on steel and aluminum imports
Global Steel and Aluminum
25% tariffs on all steel and aluminum imports from all countries went into effect on March 12, 2025.
Upcoming and Potential Tariffs
Reciprocal Tariff Plan scheduled to start on April 2, 2025.
Potential 25% tariffs on European Union imports, announced but not yet implemented.
Planned tariffs on auto imports, semiconductors, and pharmaceuticals, with rates "25 percent and higher," set to begin on April 2, 2025.
Investigations and Future Considerations
Section 232 national security investigations are ongoing for:
Timber and lumber imports (due November 26, 2025)
Copper imports (due November 22, 2025)
The tariff situation remains fluid, with ongoing negotiations and potential changes. The Trump administration's trade policies continue to evolve, and further adjustments may occur in the coming weeks and months
EUROPE
REARM Europe
The Rearm Europe Plan, also known as "REARM Europe," is a major initiative proposed by the European Commission to strengthen Europe's defense capabilities and support Ukraine. has emerged as a response to growing concerns about U.S. disengagement from European security, particularly in light of President Trump's recent actions: