Tariff Tensions Spark Global Trade Firestorm

Good morning, The world’s shifting gears today:
The U.S. imposes heavy tariffs on Canada, Mexico, and China, risking global trade disruption. China maintains its 5% growth target despite U.S. trade barriers. Rising steel costs threaten the U.S. oil industry. Meanwhile, Google launches a smarter AI Mode, redefining search standards.

Stay sharp and have a great day ahead!

WORLD
U.S slaps heavy tariffs on Canada, Mexico and China

“Well, here we go again,” a trade analyst sighed as news broke—Trump’s 25% tariffs on imports from Mexico, Canada, and China had officially kicked in. The move, justified as a crackdown on fentanyl inflows, is set to disrupt over $2.2 trillion in trade and drive up costs for American consumers.

Canada wasted no time. “A very dumb thing to do,” Trudeau shot back, slapping retaliatory tariffs on $20.7 billion worth of U.S. goods, from orange juice to motorcycles. China, never one to back down, countered with new duties on American products and took the fight to the WTO. Mexico’s response? Details are coming Sunday, but retaliation is certain.

Meanwhile, Wall Street took a hit, and retailers braced for price increases. “Expect higher grocery prices in days,” Target’s CEO warned. Best Buy, still heavily reliant on Chinese suppliers, echoed concerns. Economists predict U.S. households could pay an extra $1,000 annually, and the Fed’s latest GDP model flipped from growth to contraction.

As Trump doubles down, businesses, consumers, and global leaders are left wondering: is this a negotiation tactic, or the start of a prolonged economic battle?

ECONOMY
China sticks to 5% growth target amid trade war clouds

China has reaffirmed its economic growth target of "around 5%" for the year, despite mounting external pressures, particularly the threat of a trade war with the U.S. Premier Li Qiang, addressing the National People's Congress, acknowledged domestic economic fragility and weak consumer demand but emphasized Beijing’s commitment to stabilizing growth without drastic intervention.

The government’s strategy hinges on boosting domestic consumption, shifting from its reliance on the debt-heavy real estate sector to high-tech industries like AI and smart manufacturing. However, economists remain sceptical, noting that planned fiscal stimulus, including an expanded rebate program for consumer goods and increased government bond issuance, may not be enough to counteract economic headwinds.

U.S. taxes on Chinese products and limits on tech exports are causing more problems. China is trying to become self-sufficient in making computer chips and other innovations. The big question is whether China can continue to grow despite these global trade problems and its economic issues.

ENERGY
Rising Costs Put U.S. Oil Boom at Risk

The energy industry, once optimistic about Trump’s pro-drilling policies, is now feeling the squeeze as tariffs on steel and imported energy drive up costs. Steel pipes, essential for drilling, have surged 30% in price, forcing companies to rethink budgets and potentially scale back operations.

While production remains steady for now, the long-term impact is uncertain. Higher well costs mean fewer wells drilled, a reality that could slow U.S. oil and gas output despite Trump’s push for energy dominance. At the same time, tariffs on Canadian and Mexican oil threaten refineries and could push fuel prices higher.

Industry leaders are grappling with the unpredictability of Trump’s trade policies. Some companies, like Liberty Energy, have yet to feel the effects, while others, like Elevation Resources, are already adjusting spending plans. The bigger question: will rising costs undercut the very energy boom Trump championed?

AI & TECHNOLOGY
Google’s ‘AI Mode’ Brings Smarter, Conversational Search

Google has introduced AI Mode, an experimental feature for Google One AI Premium subscribers via Search Labs, designed to handle complex, multi-part queries with seamless follow-ups—rivalling AI search tools like Perplexity and ChatGPT Search.

Powered by Gemini 2.0, AI Mode synthesizes information from multiple sources in real-time, offering deeper insights. For sensitive topics like health, it may prioritize web links over AI-generated responses to ensure accuracy.

Google plans to enhance AI Mode with better visuals, user-generated content, and improved hyperlinking. Alongside this, Gemini 2.0 now powers AI Overviews in the U.S., improving answers for coding, math, and multimodal queries.

Users can access AI Mode via Search Labs or google.com/aimode.