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Trump’s Economic Policies Expected to Drive Inflation, Affect Global Markets

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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.

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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.

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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.

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Musk Says SpaceX Restricted Ukraine’s Starlink Service Over Military Drone Use

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Elon Musk has said SpaceX restricted Ukraine’s use of its Starlink satellite internet service after accusing the country’s military of breaching its terms by using the civilian network for offensive drone strikes. Ukrainian officials have reported that connectivity has stabilised, with military drones once again reaching the speeds required for operations.

Musk’s comments on Saturday followed more than a week of reported connection problems that Ukraine said had disrupted its defensive operations. The issue emerged amid growing tensions between Washington and Kyiv over Ukrainian attacks on Russian oil infrastructure.

“Using Starlink, a civilian commercial service, for offensive drone strikes to kill people has never been allowed, nor should it be,” Musk wrote on X. He said Ukrainian forces had violated the service’s terms and that SpaceX had closed the loophole the previous week.

Musk also rejected suggestions that SpaceX was responsible for problems affecting Starshield, a separate, military-grade satellite communications system controlled by the US government. He said SpaceX had done more to defend Ukraine than any other private company, while stressing that decisions concerning Starshield rested with Washington.

Ukrainian presidential adviser Serhii Beskrestnov questioned Musk’s account, saying the restrictions on Starlink in Ukraine made the claims difficult to understand. He said drones using the commercial service were limited to speeds of around 70 to 90 kilometres per hour and could not operate on Russian territory.

“Therefore, we physically cannot use commercial Starlink for deep strikes and medium-range strikes,” Beskrestnov wrote on Telegram. Ukraine’s defence ministry had not immediately commented on Musk’s latest statements.

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Ukraine uses Starlink to maintain communications between military units, particularly in remote battlefield areas. Starshield provides more specialised capabilities, including support for drone operators who need real-time information about targets.

Ukraine’s Defence Minister Yevhenii Khmara said on Saturday that the military was recording a stable connection. Ukrainian President Volodymyr Zelensky also reported that drone speeds had returned to the required levels. Kyiv had previously said connectivity could fail when drones exceeded 161 kilometres per hour.

US President Donald Trump said he had asked Musk to restore the service, although he has repeatedly denied instructing SpaceX to restrict it. Musk did not explain why the company changed the service’s capabilities after years of Ukraine’s military relying on Starlink.

The disruption coincided with a diplomatic dispute over Ukrainian strikes on Russian oil refineries, which Kyiv says are important sources of revenue for Moscow’s war effort. Trump has criticised the attacks, linking them to pressure on global fuel prices. However, the conflict involving Iran has been a major driver of energy market volatility this year.

Meanwhile, fighting continued across Ukraine. Emergency services reported three people killed and 15 injured in attacks in the Dnipropetrovsk region, including an 11-year-old girl. Six others were injured when a Russian drone struck an apartment building in Vinnytsia.

Russia also reported strikes on Ukrainian logistics facilities, while Ukrainian authorities said their forces had attacked a facility operated by a sanctioned heavy machinery manufacturer in the Russian city of Oryol. Russian authorities said three people were killed there.

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Bulgaria Heads to Presidential Poll Amid Black Sea Security Concerns and Economic Pressures

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Bulgarians are preparing to vote in a presidential election shaped by concerns over Russia’s war in Ukraine, drone attacks on commercial vessels in the Black Sea, rising energy costs and persistent inflation.

The election is the first major electoral test for Prime Minister Rumen Radev’s Progressive Bulgaria party since its victory in parliamentary elections last April. A record 27 candidates are contesting the presidency, although polling suggests the race could be decided in a second round.

Incumbent President Iliana Yotova, backed by Radev’s party, is polling between 41% and 47%, while former caretaker prime minister Andrey Gyurov is attracting between 28% and 31%, according to projections cited during the campaign. Kostadin Kostadinov, leader of the far-right Vazrazhdane party, is polling between 10% and 13%.

Yotova supports dialogue with Moscow and opposes military assistance to Ukraine, positions that have placed the country’s relationship with Russia at the centre of the campaign. Gyurov, an economist backed by pro-Western opposition parties, has expressed firm support for Kyiv.

Security concerns have intensified following drone attacks on commercial ships off Bulgaria’s Black Sea coast. The incidents have raised fears that Russia’s invasion of Ukraine could create wider risks for the European Union and NATO member, prompting Bulgarian authorities to seek assistance from international partners to strengthen maritime security.

The attacks have also focused attention on the Black Sea’s importance for regional shipping and trade, as governments across Europe assess the potential consequences of the conflict spreading beyond Ukraine.

Economic pressures have been another major issue for voters. Rising energy prices and inflation have increased household expenses, with families in rural communities facing particular difficulties in meeting everyday costs. Candidates have sought to address these concerns as voters weigh the country’s economic prospects alongside national security and foreign policy.

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Yotova became president earlier this year after Radev stepped down to contest the parliamentary elections and subsequently became prime minister. She previously served as vice-president alongside Radev after their election victories in 2016 and 2021.

A former journalist and member of the European Parliament, Yotova would become Bulgaria’s first woman elected president if she wins the presidency in her own right.

Her challenger, Gyurov, is a former deputy governor of Bulgaria’s central bank who served as caretaker prime minister during the first months of 2026. During his time in office, he signed a security cooperation agreement with Ukraine, underlining his support for closer ties with Kyiv.

Polling stations are scheduled to close at 8pm local time on Sunday, with initial exit polls expected shortly afterwards and preliminary results due on Monday.

Bulgarian election rules require turnout to exceed 50% and a candidate to secure a majority of votes for a first-round victory. Forecasts put turnout below 40%, making a runoff on November 1 likely. The second round would set up a direct contest between the leading candidates and give voters another opportunity to decide the country’s direction on foreign policy, security and economic issues.

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Thousands Protest Cost of Living and Meloni Government Across Italy

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Thousands of people took to the streets in Italy’s major cities on Saturday to protest rising living costs, Prime Minister Giorgia Meloni’s government and conflicts in the Middle East. The demonstrations were largely peaceful, although confrontations with security forces occurred in several cities and nine people were arrested nationwide.

Tensions were reported towards the evening in Turin, Florence, Bologna and Rome. Authorities deployed additional security personnel following violence during demonstrations the previous weekend, with police officers and soldiers patrolling city centres.

In Milan, around 500 soldiers were deployed in response to attacks on shops during the earlier protests.

Demonstrators in Florence, Turin, Milan and Rome gathered in smaller groups rather than organising a single main march. Protesters attempted to reach central areas but were blocked by security forces in several locations.

In Rome, a group broke away from the main demonstration on Via Cavour and headed towards the Colosseum. The protesters entered the historic Flavian Amphitheatre, chanting slogans and displaying placards before authorities escorted them out of the site.

Later, a young demonstrator stood in front of a police water cannon vehicle as it moved forward for a short distance. Videos circulating on social media appeared to show officers forcibly pulling him away from the vehicle.

In Florence, tensions rose when protesters attempted to cross the Santa Trìnita bridge. Police maintained a security cordon and used batons as demonstrators pushed towards the barrier.

In Bologna, authorities prevented a march from proceeding towards Via Marconi and Via Reno. Some demonstrators threw bottles and other objects at security forces, who responded with water cannon and tear gas.

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Milan experienced a calmer day overall, with at least three marches joining together and moving through streets around the city centre. Verbal confrontations were reported between demonstrators and some far-right activists.

According to the Department of Public Security, nine people were arrested and 87 were reported to the authorities by the end of the day. Police also took 371 people to stations for checks, including 110 minors and 69 foreign nationals.

In Milan, 30-year-old Youssef Siher was detained and placed under investigation on suspicion of aggravated incitement to commit a crime. He was alleged to have been behind the “17 October Movement”, a group through which thousands of people reportedly shared information about participating in the previous weekend’s demonstrations. The allegations had not been established in court.

Meloni praised the security operation in a social media post on Saturday evening, saying the right to demonstrate must be protected alongside public safety.

“Safety must be guaranteed for everyone,” she said, referring to peaceful protesters, people going to work and residents who want to live in their cities without fear. She added that authorities should not allow those seeking confrontation and violence to dominate public spaces.

The demonstrations reflected public discontent over living costs and government policies, while the incidents highlighted the challenge facing authorities in maintaining order without restricting peaceful protest.

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