Business

Trump Administration Sparks Trade Concerns as Germany Faces Recession Risks

Published

19 hours ago

January 21, 2025

RTX

U.S. President Donald Trump’s first executive orders, unveiled on Monday, stopped short of imposing new tariffs but introduced the External Revenue Service, a new agency tasked with collecting tariffs and duties. While financial markets reacted cautiously, the move has renewed fears of a more protectionist U.S. trade policy under Trump’s administration.

Germany’s Economic Sentiment Declines

In Europe, Germany’s economic outlook remains bleak, with concerns mounting over the possibility of a second consecutive year of recession. The ZEW Economic Sentiment Index for Germany fell to 10.3 points in January, down from 15.7 in December and missing forecasts of 15.3. The drop highlights lingering challenges such as weak private consumption, sluggish construction, and rising inflationary pressures.

However, there was a modest improvement in the assessment of Germany’s current economic situation, with the sub-index rising by 2.7 points to -90.4. While still deeply negative, the figure suggests economic conditions have not worsened as severely as anticipated.

Eurozone Shows Resilience

In contrast to Germany, the broader eurozone displayed relative stability. The ZEW Economic Sentiment Index for the eurozone edged up by 1.0 point to 18.0 in January, while the current economic situation indicator improved slightly to -53.8.

Trade Policy and Political Uncertainty Loom Large

ZEW President Achim Wambach attributed Germany’s declining sentiment to economic stagnation, geopolitical risks, and uncertainty surrounding U.S. trade policy. Trump’s campaign promises to impose tariffs of up to 20% on imports, including those from Europe, have left global markets wary.

“The second consecutive year of recession caused economic expectations in Germany to fall. Negative GDP growth figures and increasing inflationary pressure contributed to this decline,” Wambach said.

At home, Germany faces its own political uncertainty. A snap federal election scheduled for February 23 follows the collapse of Chancellor Olaf Scholz’s three-party coalition in November. Recent polls show the CDU/CSU leading with 31% support, followed by the far-right AfD at 21%. The SPD, Scholz’s party, trails at 16%, complicating coalition-building efforts.

Markets React Cautiously

European markets remained stable on Tuesday as investors evaluated Trump’s initial policy actions. Germany’s DAX index held steady at 20,990 points, near record highs. Key gainers included Sartorius and Siemens Healthineers, up 2.1% and 2%, respectively.

In currency markets, the euro fell 0.6% to $1.0357, reversing some of Monday’s 1.4% gain, which had been driven by relief over the absence of immediate tariffs in Trump’s executive orders.

Outlook

Looking ahead, the European Central Bank is expected to cut interest rates by 25 basis points to 2.75% at its meeting next week. Meanwhile, the focus remains on U.S. trade policies and their potential impact on global markets, as Germany grapples with its economic and political challenges.

Business

European Car Market Shows Mixed Results in 2024, Spain Outperforms Amid Challenges

Published

20 hours ago

January 21, 2025

RTX

New car registrations across the European Union recorded a modest rise of 0.8% in 2024, reaching approximately 10.6 million units, with Spain emerging as a key driver of growth. However, other major markets, including Germany, France, and Italy, faced declines, reflecting ongoing industry challenges.

Spain’s new car registrations surged 7.1% year-on-year, bolstering the EU’s overall performance. Conversely, Germany saw a 1% drop, while France and Italy experienced declines of 3.2% and 0.5%, respectively. Supply chain disruptions, particularly in France, and semiconductor shortages in Germany were cited as significant factors contributing to these downturns.

December Sees Varied Performance

December brought a notable 5.1% increase in EU car registrations, a marked recovery from November’s 1.9% decline. Spain led the charge with a 28.8% jump in registrations, and France posted a modest 1.5% rise. However, Germany and Italy continued to struggle, with registrations falling by 7.1% and 4.9%, respectively.

Rise of Electric and Hybrid Vehicles

Battery-electric vehicles (BEVs) gained traction in 2024, accounting for 13.6% of total new car registrations, while hybrid electric vehicles (HEVs) made up 30.9%. Petrol vehicles, though still the most popular choice, saw their share decline to 33.3% for the year.

In December, petrol car registrations fell 1.8% across the EU, with Germany, France, and Italy all posting significant declines. Spain was the exception, reporting a 16% increase. Meanwhile, plug-in hybrid vehicle registrations rose 4.9%, buoyed by sharp increases in France (44.9%) and Germany (6.8%).

Challenges for Battery-Electric Vehicles

BEV registrations faced a 10.2% decline in December, totaling 144,367 units with a market share of 15.9%. Germany and France reported steep drops of 38.6% and 20.7%, respectively. The decline was partly attributed to the EU’s imposition of higher tariffs on Chinese electric vehicle imports from companies like Geely, SAIC, and BYD.

The tariffs were introduced amid concerns about Chinese government subsidies enabling these manufacturers to undercut European competitors. While battery-electric vehicle imports were affected, hybrid vehicles remained exempt, prompting Chinese automakers to shift focus to hybrid offerings in an effort to maintain market share.

Cost of Living Impacts and Future Outlook

European consumers also exhibited caution in purchasing new cars, influenced by ongoing cost-of-living concerns. Diesel vehicles continued to lose favor, with December registrations falling 15% compared to the same month in 2023, reducing their market share to 9.8%.

As the EU car market grapples with economic pressures and evolving consumer preferences, Spain’s robust performance offers a silver lining amid broader industry challenges.

Business

World Economic Forum 2025: Global Leaders Gather in Davos to Shape the Future

Published

2 days ago

January 20, 2025

RTX

The 2025 Annual Meeting of the World Economic Forum (WEF) has commenced in Davos, Switzerland, bringing together around 3,000 leaders from over 130 countries under the theme “Collaboration for the Intelligent Age.” The event, running from January 20-24, aims to address pressing global challenges and harness technological advancements to drive growth and sustainability.

Key Themes and Discussions

This year’s agenda reflects the complexities of a rapidly changing world. Topics include geo-economic uncertainty, artificial intelligence, reimagining economic growth, and safeguarding the planet. A WEF statement noted, “Geo-economic uncertainty, trade tensions, cultural polarization, and climate anxiety are rumbling, but there’s also the promise of rapid innovation – AI, quantum computing, and biotech – to boost productivity and living standards.”

Diverse Participation

The forum boasts participation from over 350 government leaders, including 60 heads of state and government. Among the high-profile attendees are President-elect Donald Trump of the United States, joining via live video for a dialogue, and Ursula von der Leyen, President of the European Commission. Other notable leaders include Olaf Scholz, Chancellor of Germany; Cyril Ramaphosa, President of South Africa; and Volodymyr Zelenskyy, President of Ukraine.

Key figures from international organizations, such as António Guterres, UN Secretary-General; Kristalina Georgieva, Managing Director of the IMF; and Tedros Adhanom Ghebreyesus, WHO Director-General, are also participating.

Business leaders make up a significant portion of attendees, with over 1,600 executives, including 900 top CEOs, representing industries ranging from finance to technology. Innovators, including 120 Global Innovators and Tech Pioneers, are present to showcase groundbreaking solutions.

Civil Society and Community Representation

Diversity extends beyond political and business leaders. Over 170 representatives from civil society, labor unions, NGOs, religious groups, and indigenous communities are participating, alongside academics and experts from leading institutions. Members of WEF’s unique communities, such as the Global Shapers and Young Global Leaders, are also in attendance, spotlighting grassroots innovations to tackle global challenges.

A Platform for Collaboration

Davos 2025 is set against a backdrop of global uncertainties, including climate change, geopolitical tensions, and technological disruptions. The forum seeks to serve as a platform for collaboration across sectors and regions, fostering dialogue to address immediate challenges while planning for a sustainable and inclusive future.

With discussions poised to shape policies and innovations, this year’s meeting underscores the critical role of collective action in navigating the complexities of the 21st century.

Business

Ireland’s Venture Capital Investment Rises in Q4 Amid Global Challenges

Published

2 days ago

January 20, 2025

RTX

Venture capital (VC) investment in Ireland experienced a notable rise in the final quarter of 2024, supported by renewed interest in emerging technologies and government schemes aimed at bolstering the VC industry. According to the latest KPMG Venture Pulse report, Ireland recorded 29 deals worth $255.16 million (€247.22 million) during the quarter, a 46% increase compared to 26 deals valued at $174.76 million (€169.38 million) in the same period of 2023.

However, despite the strong finish to the year, total venture capital investment in Ireland for 2024 fell by 18%, amounting to $627.75 million (€608.44 million) across 98 deals. This was a decline from the previous year, which saw 101 deals worth $764.06 million (€740.49 million). The drop reflects global funding pressures that have challenged startup ecosystems worldwide.

Major Deals and Sector Focus

The fourth quarter of 2024 saw several high-value deals in Ireland. Among the standout investments:

Dublin-based Nuritas, an AI-powered peptide discovery company, raised $42 million (€40.71 million) in a Series C funding round.
Travel tech infrastructure firm Nuitée, also based in Dublin, secured $48 million (€46.52 million) in its Series A funding round.

Irish venture capital activity in Q4 was driven by interest in sectors such as biotech, health, and fintech, alongside a growing focus on artificial intelligence (AI). The government’s introduction of the new Seed and Venture Capital Scheme further supported this momentum.

Optimism Amid Challenges

Anna Scally, international tax partner at KPMG Ireland, highlighted the resilience of Ireland’s innovation ecosystem. “A strong end to 2024 and a positive start to 2025 underscore the resilience of Ireland’s innovation ecosystem amidst global funding pressures and show confidence is returning to the market,” Scally said on the company’s website.

She also pointed to AI’s growing prominence in Ireland’s VC landscape, though deal sizes in the sector remain relatively small. The implementation of the EU AI Act on February 2, 2025, is expected to influence the development of AI products and services in the European market, further shaping the sector.

Global VC Trends

Globally, venture capital markets demonstrated resilience in 2024, with 35,684 deals totaling $368.3 billion (€356.74 billion). While the number of deals decreased from 43,320 in 2023, the combined value rose compared to $349.4 billion (€338.54 billion) the previous year.

The Americas led VC activity, with investments reaching $221.7 billion (€214.85 billion), while Europe’s total stood at $62.4 billion (€60.47 billion). The Asia-Pacific region saw its VC investment drop to a nine-year low of $78.8 billion (€76.36 billion), reflecting broader global challenges such as geopolitical tensions and economic uncertainties.