February'25

• U.S. Imposes Tariffs, Igniting Global Trade Tensions

The U.S. government in February 2025 imposed a string of tariffs, which included a major 25% import duty on Canada and Mexico, along with a 10% tariff on selected Chinese products. The action was meant to counteract trade imbalances and safeguard local industries but lit the spark that ignited global tensions. The move invited retaliatory action from the involved countries, leading to uncertainty in global trade. Investors, especially in developing economies, responded with anxiety, driving market volatility higher and prompting fears of a long-term negative effect on world trade networks.

• Gold Prices Reach Record Highs with Fears over Trade War and Geopolitics

Gold prices reached record highs in February as they rose above $2,800 an ounce for the first time in more than a year. The increase was fueled mostly by the demand for safe-haven assets from investors as the world economic outlook remained ambiguous. Rising trade tensions, especially with the imposition of U.S. tariffs, as well as geopolitical uncertainty, drove gold's attractiveness as a safe store of value. Experts forecast that this trend may continue if the global trade war escalates or other geopolitical threats, including Middle Eastern or Asian tensions, further increase.

• Ukraine and U.S. Sign Minerals Deal to Bolster Bilateral Relations

In late February 2025, the United States and Ukraine signed a historic minerals agreement to secure long-term investment in Ukraine's mining industry. The agreement was viewed as a strategic step aimed at deepening cooperation between the two nations, particularly within the backdrop of increasing fears over the influence of Russia in the region. Ukrainian President Volodymyr Zelenskyy, who was visiting Washington for negotiations, emphasized the significance of the agreement with regards to promoting economic development and energy self-sufficiency in Ukraine. The deal is likely to generate billions of dollars in investment in the next ten years and enhance the place of Ukraine in the international energy market.

• UK's FTSE 100 Index Remains Strong in Spite of Global Trade Worries

In spite of escalating global trade tensions, the UK's FTSE 100 index showed strong resilience in February, rising by 0.6%. Market analysts were originally worried that the U.S. tariff increases might lead to a recession or severe fall in the world markets, but the FTSE was able to resist such pressures. Most of this resilience was due to hopes of an impending trade agreement between the United Kingdom and the United States. Prime Minister Keir Starmer's trip to Washington, during which he addressed major trade issues, was a welcome development. British investors believed that the nation might not experience a severe economic recession if a deal is signed.

• U.S. Goods Trade Deficit Expands as New Tariff Announcements are Made.

The U.S. goods trade deficit expanded sharply in February 2025, after new tariffs were announced. Importers moved to bring goods in prior to the imposition of the tariffs, and this added to a high level of imports. The high level of imports, in turn, translated to a similar widening of the trade deficit, causing economists to fear the long-term effects on the U.S. economy. Those opposed to the tariffs contend that such trade balances could reverse any gains to help make domestic industries stronger, particularly if other nations continue to retaliate. The widening of the trade deficit is also interpreted as a warning that the U.S. could experience heightened inflationary pressures in the coming months as higher import prices trickle down to consumers.