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Trump’s Economic Policies Expected to Drive Inflation, Affect Global Markets
With former President Donald Trump’s historic reelection victory, financial experts warn that inflation is likely to rise in the United States and globally if Trump implements his campaign pledges, which include aggressive tax cuts, strict immigration policies, and high tariffs on imported goods. CNN projected Trump’s victory on Wednesday, securing him a second term in office alongside a Republican majority in the Senate, positioning him to enact a potentially transformative economic agenda.
U.S. stock markets surged following Trump’s win, and the dollar strengthened against major currencies as traders braced for increased inflation and fewer interest rate cuts from the Federal Reserve. Matthew Ryan, head of market strategy at Ebury, noted that a stronger dollar reflects investor expectations that Trump’s policies—particularly on tariffs and immigration—will boost inflation and potentially lead to elevated interest rates.
“Investors are bracing for tariffs… which will push up the price of imported goods for American shoppers,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Trump’s promise of mass deportations could also raise wage costs for U.S. companies by limiting the labor pool, she added.
Higher Tariffs on Imports
During his campaign, Trump proposed raising tariffs to 10-20% on all imported goods, a drastic increase from the current 2% average, with a 60% tariff specifically on Chinese imports. He has also suggested tariffs as high as 200% on cars manufactured in Mexico or by U.S. companies that relocate production there. According to analysts, these tariffs would act as a tax on imports, increasing costs for consumers and businesses reliant on imported materials.
Economists warn that higher tariffs could disrupt the Federal Reserve’s interest rate strategy. Nomura analysts indicated that due to anticipated inflation from tariffs, they now expect only one rate cut in 2025, with policy likely remaining on hold until inflation subsides.
Impact on Global Markets and Trade
The effects of Trump’s tariffs could reverberate beyond U.S. borders. If trading partners impose retaliatory tariffs on American exports, global inflation could rise, potentially stunting world trade and economic growth. “A material increase in global inflation would follow, while the ensuing hit to world trade would negatively impact growth,” noted Investec chief economist Philip Shaw and economist Ellie Henderson.
A stronger dollar could also impact global inflation, particularly for countries that rely on commodities priced in U.S. dollars. As the dollar gains strength, these countries may face higher costs for essential goods, which companies would either have to absorb or pass on to consumers. This effect could force adjustments in international markets, with some countries like China potentially offloading excess goods to other nations with lower tariffs, possibly dampening inflation in those areas.
Risks for Key Trading Partners
Economies heavily reliant on U.S. exports, such as Canada and Mexico, may feel the direct impact of Trump’s tariffs. BMI, a market research firm under Fitch Solutions, warned that Mexico, Canada, and other nations with trade surpluses, including China, Japan, Germany, and South Korea, could face pressure to increase imports of U.S. goods. A 60% tariff on Chinese goods alone could cut China’s economic growth by up to 0.8 percentage points over the next two years, according to BMI.
German exporters could also experience significant setbacks if Trump enacts a 20% tariff on all trading partners. The Ifo Institute for Economic Research in Munich warned that German exports to the U.S.—its largest market outside the EU—could drop by around 15%, potentially posing a severe economic challenge for both Germany and the EU.
As Trump prepares to implement his economic agenda, economists expect a turbulent period for global markets, marked by inflationary pressures, potential trade conflicts, and shifting alliances.
News
Spain and Portugal Hit by New Storms, Death Toll Rises
Spain and Portugal endured fresh storms and torrential rain on Saturday, claiming another life just days after Storm Leonardo caused deadly flooding and widespread damage.
One person was killed in Portugal as heavy rainfall from Storm Marta swept across the Iberian Peninsula. Authorities reported that a 46-year-old member of the emergency services drowned in a river at Campo Maior, in the central Portalegre district, while attempting to cross a flooded area.
The extreme weather forced three municipalities in Portugal to postpone a presidential vote scheduled for Sunday by a week. Storms in recent weeks have already taken a heavy toll: Storm Kristin killed at least five people in Portugal last week, while Storm Leonardo claimed another victim on Wednesday.
Officials warned that the risk of flooding from the Tagus River in the central Santarém region remained at its highest level. Further south, in Alcácer do Sal, floodwaters from the Sado River had receded to the banks, though the city had previously been submerged, forcing residents to evacuate. Alcácer do Sal lies about 90 kilometres south of Lisbon.
In Spain, Storm Marta prompted the closure of dozens of roads as it moved northeast. In Ávila, a snow plough driver died on Saturday after the vehicle plunged down a 20-metre slope at the El Pico pass. According to the Directorate General of Traffic (DGT), more than 100 roads were closed in the early morning, mostly due to flooding, snow, or ice.
The province of Cadiz was the hardest hit, with several roads rendered impassable, followed by Cordoba and Seville. Snowstorms in mountainous regions led to road closures in Granada, Asturias, Salamanca, and Navarre.
Spain’s State Meteorological Agency (Aemet) said rainfall would ease on Sunday in many areas but persist in some regions, including the Strait of Gibraltar, the Alboran Sea, Andalusian mountain ranges, the Balearic Islands, northeastern Catalonia, and the Cantabrian Sea. Locally heavy showers are expected, with thunderstorms and hail reported in some areas.
Authorities in both countries continue to urge residents to exercise caution, avoid flooded zones, and stay updated on weather alerts. Emergency services have been deployed to assist those affected by rising waters and to prevent further casualties.
The repeated storms across the Iberian Peninsula highlight the ongoing vulnerability of the region to severe weather events in recent weeks, with communities struggling to recover from back-to-back floods and heavy rains.
Spain and Portugal’s governments have stressed the importance of preparedness, especially in flood-prone regions, as meteorologists warn that unsettled weather may continue to affect the peninsula over the coming days.
News
German Troops in Lithuania Face Hybrid Threats Amid Rising Tensions With Russia
The German army brigade stationed in Lithuania is not under direct fire, but troops report facing hybrid attacks, including surveillance, psychological operations, and drone activity, as tensions with Russia persist in the Baltic region.
Soldiers have described unusual incidents, including mysterious phone calls where conversations from hours earlier were played back by unknown callers. “A comrade phones home, speaks for half an hour, and then gets a call from an unknown number. He answers – and hears his own conversation from earlier, recorded and played back,” Joshua Krebs wrote in his book, Inside Bundeswehr, calling the tactic “uncanny.”
Drones have also reportedly been used to monitor sensitive defence systems and exercises involving Germany’s Battletank Brigade 45 in Lithuania. Last year, a Russian reconnaissance aircraft entered Belarusian airspace during the Bundeswehr’s exercise Iron Wolf, raising concerns about Russian surveillance in the region.
Germany’s Inspector General, Carsten Breuer, described such incidents as “proof of the very real threat to Lithuania.” Federal Defence Minister Boris Pistorius echoed the warning during a meeting with his Lithuanian counterpart in Berlin, stressing that hybrid warfare poses a particular concern for Lithuania and the wider Baltic region.
The risks are compounded by Russian incursions into European airspace. In October 2025, two Russian fighter jets briefly entered Lithuanian airspace for approximately 18 seconds before turning back under NATO escort. German Chancellor Friedrich Merz described the incident as a “provocation,” with the aircraft thought to have flown from Russia’s Kaliningrad exclave.
Given the Baltic states’ proximity to Russian territory, the region is under constant NATO monitoring. Germany, Spain, and the UK currently lead the mission to police Baltic airspace, while Germany also supports ground operations, including deploying a mobile air force command post for air surveillance from January to March this year.
Experts note that hybrid attacks often exist in a legal grey area. Unlike conventional military operations, many hybrid actions, such as surveillance or unmarked troop movements, cannot be directly attributed to a single actor, and international law does not automatically classify them as armed attacks under Article 51 of the UN Charter. The aim is often psychological: to provoke, unsettle, and signal presence without triggering a military response.
Incidents reminiscent of the “little green men” in Crimea have occurred in the Baltics. In December, Russian border guards briefly crossed into Estonia without authorization, prompting diplomatic protests rather than military retaliation. Armed men in unmarked uniforms were also spotted near the Estonian border earlier in the year, reinforcing concerns about Russia’s hybrid strategies.
According to Pistorius, these tactics are part of a broader pattern of Russian pressure. “The threat posed by Russia is felt more acutely in Lithuania and across the Baltic region than elsewhere in Europe,” he said, citing provocative airspace incursions and intelligence-gathering operations as ongoing challenges for NATO forces in the region.
News
Greenland Mayor Condemns Comedian’s Flag Stunt Amid Tensions with US
The mayor of Greenland’s capital has urged media professionals and content creators to act responsibly after a German comedian attempted to hoist the US flag in Nuuk, drawing outrage from local residents.
Bavarian comedian Maxi Schafroth, 41, tried to raise the Stars and Stripes near the city’s cultural centre on Thursday. Passers-by confronted him after he claimed to be a US official. Witnesses reported that locals reacted angrily, and Schafroth left the scene amid disapproving looks. Local authorities subsequently fined him, according to reports.
Avaaraq Olsen, mayor of Kommuneqarfik Sermersooq, the district that includes Nuuk, described the stunt as “immensely harmful.” She said the incident was particularly upsetting for children and families, who have already been anxious over US President Donald Trump’s repeated threats to seize Greenland, an autonomous Danish territory.
“Raising a flag at our capital cultural centre, the flag of a military superpower that for weeks has been implying military force against our country, is not a joke,” Olsen said in a statement. “When you amplify those fears for content, clicks, or laughs, you are not being bold or creative. You are adding to the distress of an already vulnerable population. So, pause before you film. Think before you stage something ‘funny.’ Consider whether your next question or stunt will inform the world or simply make a child cry or a family feel less safe in their own country.”
Schafroth is known in Germany for his work on the satirical programme “Extra Drei,” broadcast by the regional NDR channel, which attracts over one million viewers. NDR expressed regret over the incident in statements to Germany’s Der Spiegel and the Ritzau news agency.
The stunt comes amid heightened international attention on Greenland following Trump’s long-standing territorial interest in the Arctic territory. Trump described owning Greenland as essential to US national security, claiming without evidence that Russia or China would otherwise seize control. His statements sparked a serious diplomatic crisis, considered the most severe in NATO’s history since the alliance was established in 1949.
Although the US president later backtracked on threats to use force, discussions between Washington, Copenhagen, and Nuuk are ongoing. Greenland’s government has been working to manage the stress and anxiety caused by the situation and to reassure its population that their safety remains a priority.
Local authorities stressed that Greenlanders, particularly children, remain worried over the uncertainty surrounding the territory’s international status. Olsen said the flag stunt, though intended as a humorous act, highlighted the need for content creators to consider the real-world impact of their actions on communities already facing heightened tension.
The incident underscores the lingering sensitivity in Greenland following months of international attention, and the city’s leadership has called for respect and caution in public displays that could inflame fear or insecurity among residents.
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