Business and Economy

United States President Donald Trump has nominated former Federal Reserve Governor Kevin Warsh to head the US central bank when current Federal Reserve Chair Jerome Powell’s term ends in May.

The announcement on Friday caps a months-long, highly publicised search for a new chair of the Federal Reserve, widely regarded as one of the most influential economic officials in the world.

It comes amid Trump’s public pressure campaign on Powell, whom he appointed during his first term but has repeatedly condemned for not cutting interest rates at the pace the president would like.

“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best,” Trump posted on his Truth Social site. “On top of everything else, he is ‘central casting,’ and he will never let you down.”

The statement referenced the apparent compromise Warsh represents. The 55-year-old is known to be in Trump’s orbit and has recently called for lower interest rates, although he is expected to stop short of the more aggressive easing associated with some other potential candidates for the job.

Still, he is expected to face a punishing Senate confirmation hearing, with US lawmakers likely to be particularly critical given Trump’s public comments and the Department of Justice’s decision earlier this month to open a criminal probe into Powell.

Critics, including Powell, have said Trump’s actions seek to undermine the Federal Reserve’s independence and pressure the agency to set monetary policy aligned with the president’s wishes.

What does the Federal Reserve do?

The Federal Reserve has long been seen as a stabilising force in global financial markets, due in part to its perceived independence from politics.

The Federal Reserve is tasked with combating inflation in the United States while also supporting maximum employment. It is also the nation’s top banking regulator.

The agency’s rate decisions over time influence borrowing costs throughout the economy, including for mortgages, car loans and credit cards.

In a statement, Senator Elizabeth Warren, the top Democrat on the US Senate Banking Committee, said, “This nomination is the latest step in Trump’s attempt to seize control of the Fed.”

She pointed to the investigation into Powell, as well as Trump’s effort to push out Fed Governor Lisa Cook, which is currently being challenged before the US Supreme Court.

“No Republican purporting to care about Fed independence should agree to move forward with this nomination until Trump drops his witch-hunt,” Warren said.

Republican Senator Thom Tillis, meanwhile, said he would not vote to confirm any nominee until the Department of Justice probe into Powell is ended.

“Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable,” he said in a statement.

Still, some Republicans welcomed the nomination.

“No one is better suited to steer the Fed and refocus our central bank on its core statutory mandate,” Republican Senator Bill Hagerty said in a statement.

If Warsh is confirmed, it remains unclear if Powell would immediately step down or finish out his term. Traditionally, Federal Reserve Chairs step aside as soon as their replacement is appointed, but the political situation has led to speculation Powell could stay on as long as possible.

Who is Warsh?

Warsh is currently a fellow at the right-leaning Hoover Institution and a lecturer at the Stanford Graduate School of Business.

He was a member of the Federal Reserve’s board from 2006 to 2011 and became the youngest Federal Reserve Governor in history when he was appointed at age 35.

He was an economic aide in George W Bush’s Republican administration and was an investment banker at Morgan Stanley. His father-in-law is Ronald Lauder, heir to the Estee Lauder cosmetics fortune and a longtime donor and confidant of Trump’s.

Warsh has historically supported higher interest rates to control inflation, but has more recently argued for lower rates.

He has been a vocal critic of current Federal Reserve leadership, calling for “regime change” and criticising Powell for engaging on issues like climate change, which Warsh has said are outside the role’s mandate.

Reporting from Washington, DC, Al Jazeera’s Kimberly Halkett said Warsh’s experience means his appointment will likely be well received by the markets.

“The consensus is that in the short term, yes, this is a nominee who will do what the president has asked,” she said.

“But what he could do long term as chair of the board is very similar, ironically, to what Jerome Powell, the current board chair, is doing right now,” she said.

“That is having independence – making decisions based on economic data and not necessarily on political whims of a president.”

Venezuela’s interim President Delcy Rodriguez has signed into law a reform bill that will pave the way for increased privatisation in the South American country’s nationalised oil sector, fulfilling a key demand from her United States counterpart, Donald Trump.

On Thursday, Rodriguez held a signing ceremony with a group of state oil workers. She hailed the reform as a positive step for Venezuela’s economy.

“We’re talking about the future. We are talking about the country that we are going to give to our children,” Rodriguez said.

The ceremony came within hours of the National Assembly – dominated by members of Rodriguez’s United Socialist Party – passing the reform.

“Only good things will come after the suffering,” said Jorge Rodriguez, the assembly’s head and brother of the interim president.

Since the US military’s abduction of Venezuela’s former leader Nicolas Maduro and his wife Cilia Flores on January 3, the Trump administration has sought to pressure President Rodriguez to open the country’s oil sector to outside investment.

Trump has even warned that Rodriguez could “pay a very big price, probably bigger than Maduro”, should she fail to comply with his demands.

Thursday’s legislation will give private firms control over the sale and production of Venezuelan oil.

It would also require legal disputes to be resolved outside of Venezuelan courts, a change long sought by foreign companies, who argue that the judicial system in the country is dominated by the ruling socialist party.

The bill would also cap royalties collected by the government at 30 percent.

While Rodriguez signed the reform law, the Trump administration simultaneously announced it would loosen some sanctions restricting the sale of Venezuelan oil.

The Department of the Treasury said it would allow limited transactions by the country’s government and the state oil company PDVSA that were “necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil, by an established US entity”.

Previously, all of Venezuela’s oil sector was subject to sweeping US sanctions imposed in 2019, under Trump’s first term as president.

Thursday’s suite of changes is designed to make Venezuela’s oil market more appealing to outside petroleum firms, many of whom remain wary of investing in the country.

Under Maduro, Venezuela experienced waves of political repression and economic instability, and much of his government remains intact, though Maduro himself is currently awaiting trial in a New York prison.

His abduction resulted in dozens of deaths, and critics have accused the US of violating Venezuelan sovereignty.

Venezuela nationalised its oil sector in the 1970s, and in 2007, Maduro’s predecessor, Hugo Chavez, pushed the government to increase its control and expropriate foreign-held assets.

Following Maduro’s abduction, Trump administration officials have said that the US will decide to whom and under what conditions Venezuelan oil is sold, with proceeds deposited into a US-controlled bank account.

Concerns about the legality of such measures or the sovereignty of Venezuela have been waved aside by Trump and his allies, who previously asserted that Venezuelan oil should “belong” to the US.

It was built on democracy, open markets and cooperation – with America at the helm.

But the rules-based global order created after World War II is now under strain. Conflicts are rising. International rules are being tested. Trade tensions are escalating. And alliances are shifting.

At the centre of it all is US President Donald Trump.

In just a few short weeks, he’s captured Venezuela’s president, vowed to take control of Greenland, and threatened to slap tariffs on those who oppose him.

Meanwhile, China is presenting itself as a stable partner.

Many warn that the global order is starting to break apart.

Musk’s electric car company says it will invest $2bn in artificial intelligence start-up as part of pivot away from auto market.

Tesla has reported its first-ever decline in annual revenue on a busy day for corporate earnings that also saw the release of results from Microsoft, Meta and Samsung Electronics.

Elon Musk’s electric car company said on Wednesday that revenue fell 3 percent year-on-year to $24.9bn in the final quarter of 2025. Revenue for all of 2025 was $94.8bn, down from $97.7bn the previous year.

Net profit fell 61 percent to $840m in the quarter, taking profit for the year to $3.8bn, down sharply from $7.1bn in 2024.

The Austin, Texas-based company also revealed that it had agreed to invest $2bn in Musk’s artificial intelligence start-up xAI – the developer of Musk’s controversial Grok chatbot – as part of a push to lessen its reliance on the auto market.

“Together, the investment and the related framework agreement are intended to enhance Tesla’s ability to develop and deploy AI products and services into the physical world at scale,” the company said in its earnings report.

Tesla shares rose about 2.2 percent in after-hours trading.

Also on Wednesday, tech giants Microsoft, Meta and Samsung reported strong earnings in their latest reports to shareholders.

Meta, the parent company of Facebook and Instagram, reported a profit of $22.8bn on revenue of $59.9bn in the October-December period, a 6 percent rise year-on-year.

Meta shares surged nearly 7 percent in extended-hours trading.

Microsoft said profit rose 60 percent to $38.5bn in the final quarter, based on revenue of $81.3bn.

“We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises,” Microsoft CEO Satya Nadella said in a statement.

“We are pushing the frontier across our entire AI stack to drive new value for our customers and partners.”

Despite its strong earnings, Microsoft’s announcement that capital spending hit a record $37.5bn in the second quarter stoked fears of an AI investment bubble, sending stock prices sharply lower.

Microsoft’s shares fell more than 6 percent in after-hours trading on Wednesday.

Samsung Electronics, the biggest producer of memory chips globally, reported a profit of 20.1 trillion won ($13.98bn) on revenue of 93.8 trillion won ($65.6bn), a more than three-fold rise from the previous year.

One of the biggest trade deals in history has been struck by India and the European Union, months after United States President Donald Trump hit both with tariffs.

What’s in the agreement – and how much is driven by Washington’s unpredictable measures?

Presenter: Tom McRae

Guests:

Brahma Chellaney – Professor emeritus of strategic studies at the Centre for Policy Research in New Delhi

Remi Bourgeot – Associate fellow at the French Institute for International and Strategic Affairs in Paris

Dhananjay Tripathi – Senior associate professor in the Department of International Relations at South Asian University in New Delhi

The United States Federal Reserve is holding interest rates steady in its first rate decision of 2026.

Rates will remain at 3.5 to 3.75 percent, the Fed said on Wednesday, defying US President Donald Trump’s calls for more aggressive interest rate cuts.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated,” the central bank said in its release announcing the decision.

Wednesday’s decision was widely expected. CME FedWatch, a tool that tracks expectations for monetary policy, forecast a more than 97 percent chance that the central bank would hold rates steady.

The tracker also expects two rate cuts in 2026, with the highest probability for the first cut occurring in June at the earliest.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the central bank said.

The decision comes amid signs of stabilisation in the US labour market. The US economy added 584,000 jobs in 2025, marking the lowest annual job growth since 2003. Payrolls rose by 64,000 jobs in October and 50,000 in December. While job growth remains weak, December’s figure represents a modest rebound from October, when the economy lost 105,000 jobs, according to the Bureau of Labor Statistics.

There are indications that the labour market may cool further in the months ahead. This week, both Amazon and UPS announced tens of thousands of job cuts, some of which were driven by a push towards increasing the use of artificial intelligence in the workplace.

Another threat to the US economy and the job market comes in the form of a looming government shutdown. That can happen as early as Saturday, and depending on its duration, it could slow spending as federal workers are temporarily left without paycheques.

Political tensions

The decision to hold interest rates steady comes despite Trump’s increased pressure on the central bank to cut rates. Fed Chairman Jerome Powell has long stressed the Federal Reserve’s independence, and Wednesday’s decision is the first since Powell’s rebuke of a criminal Department of Justice investigation into him. The central bank chair, whose term expires in May, called the inquiry a “pretext” to pressure him.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said in remarks in early January in response to a subpoena.

Last week, the Supreme Court heard arguments in a case examining whether Trump has the legal authority to remove Fed Governor Lisa Cook amid allegations of mortgage fraud.

Meanwhile, Fed Governor Stephan Miran’s term is set to expire this week. Trump picked Miran to temporarily fill the seat vacated by Adriana Kugler in August while seeking a more permanent replacement.

Miran was one of two central bank governors who voted to lower interest rates alongside Christopher Waller.

The developments come as Trump searches for a new Fed chair. He has explicitly called for further interest rate cuts and for a chairman who shares his views.

“Anybody that disagrees with me will never be the Fed Chairman!” Trump said in a post on Truth Social in December.

The political pressure has caught the attention of global central banks as well.

“The Federal Reserve is the biggest, most important central bank in the world, and we all need it to work well. A loss of independence of the Fed would affect us all,” Bank of Canada Governor Tiff Macklem said on Wednesday. Canada’s central bank held rates steady ahead of the US central bank’s decision.

Macklem was one of the central bank heads who earlier this month issued a joint statement backing Powell. Last September, Macklem said Trump’s attempts to pressure the Fed were starting to hit markets.

The Dow Jones Industrial Average is flat, as is the Nasdaq, and the S&P 500 is down 0.1 in midday trading.

Tehran, Iran – The Iranian government is putting into place contingency plans for basic governance as the threat of another war with the United States and Israel looms large.

President Masoud Pezeshkian gathered governors of Iran’s border provinces as well as his economy minister in Tehran on Tuesday to delegate some responsibilities to the governors if a war breaks out, state media reported. A working group was also formed, tasked with ensuring the increased flow of essential goods, particularly food.

The governors have been given authority to import goods without using foreign currency, engage in bartering and allow sailors to bring in products under simplified customs rules, according to the government-run IRNA news agency.

“In addition to importing essential goods, governors now have the authority to bring in all goods that are directly linked with the livelihoods of the people and the needs of the market in order to balance the market and prevent hoarding,” Pezeshkian was quoted as saying at the meeting.

“Through enforcing this policy, a considerable part of the pressures resulting from the cruel sanctions are neutralised,” he said in reference to harsh restrictions imposed by the US as well as United Nations sanctions reimposed in September, which the Iranian government blames for the economic crisis the country is going through.

But while the government resorts to focusing on the basics, nearly all of Iran’s 90 million people and all sectors of the country’s beleaguered economy continue to suffer from an unprecedented internet shutdown.

The digital blackout was imposed by the theocratic state on January 8 as nationwide protests reached a boiling point, followed by the killings of thousands of Iranians.

The intranet set up to offer some basic services during the state-imposed shutdown is slow and has failed to shore up online businesses. Traditional shops are also struggling to bring in customers.

Economic trouble persists

Amid a large deployment of armed security personnel, most shops are now open in Tehran’s Grand Bazaar – where the protests against the poor economic conditions started on December 28 – and other downtown business districts.

But a shopkeeper at the Grand Bazaar told Al Jazeera that business activity is a fraction of what it was several weeks ago.

“There’s not much life and energy in the markets these days,” he said on the condition of anonymity. “The worst thing is that everything is still so unpredictable. You can see that in the currency rate too.”

Iran’s rial has been in freefall after markets partially reopened this week, degrading trust in the national currency.

The rial hit a new all-time low of about 1.6 million per US dollar on Wednesday. Each greenback had changed hands for about 700,000 rials a year ago and about 900,000 in mid-2025.

However, Central Bank of Iran chief Abdolnasser Hemmati said at the meeting with the governors in Tehran that the currency market was “following its natural course”.

He said $2.25bn worth of foreign currency deals have in recent weeks been registered in a state-run market set up to manage imports and exports, which he described as an “acceptable and considerable figure”.

The comments from Hemmati – who was also the Central Bank chief from 2018 to 2021 and was impeached as economy minister in March – immediately drew fire from the ultraconservative Keyhan newspaper, whose editor-in-chief is directly appointed by Supreme Leader Ali Khamenei.

The newspaper said his comments run counter to the reality in the tumultuous currency market as well as Hemmati’s promises of price stability for essential goods when he re-emerged as the Central Bank governor last month.

While dealing with foreign pressure, Pezeshkian’s government has also been hounded by hardliners at home who have demanded immediate changes to his relatively moderate cabinet.

The infighting became so serious that the supreme leader publicly intervened, telling lawmakers in parliament and other officials during a speech last week that they are “forbidden” from “insulting” the president at a time when the country must focus on providing essential goods to the people.

Subsidy scheme

For his part, Pezeshkian has kept his rhetoric focused solely on “combating corruption” through an initiative that has eliminated a subsidised currency rate used for imports of certain goods, including food.

Pezeshkian’s government argued the subsidised allocated currency was being misused by state-linked organisations. The scheme was supposed to deliver cheaper imported food, but that has not been the case.

The money freed up by the initiative has been distributed as electronic coupons among Iranians to buy food from select stores at prices set by the government.

But each citizen will get only 10 million rials per month for four months. That figure amounted to just over $7 when it was announced during the protests early this month, but it is now worth closer to $6 as the fall of the national currency further erodes purchasing power.

To add insult to injury, the announcement of the subsidy scheme contributed to an abrupt tripling or quadrupling of prices for some essential goods, including cooking oil and eggs. Iran’s annual inflation rate remains untamed at nearly 50 percent and has been on a rising trajectory in recent months.

The top two state-run carmakers, which hold a large monopoly in Iran’s auto industry, have also been positioning themselves for yet another price hike as the end of the Iranian calendar year approaches in March.

One of the firms, Iran Khodro, said on Tuesday that it would increase prices by up to 60 percent while local media reported that the other, Saipa, was expected to follow suit. The government has reportedly intervened to delay or slow the price hikes.

TEDPIX, the main index of the Tehran Stock Exchange, continued its recent decline on Wednesday, losing 30,000 points to stand at 3,980,000. The index was at an all-time high of 4,500,000 last week, having made gains in early January.

Wednesday’s cuts are the second mass layoffs in three months at the e-commerce giant.

Amazon is slashing 16,000 jobs in a second wave of layoffs at the e-commerce giant in three months, as the company restructures and leans on artificial intelligence.

Wednesday’s cuts follow the 14,000 redundancies that the Seattle, Washington–based company made in October. The layoffs are expected to affect employees working in Prime Video, Amazon Web Services, and the company’s human resources department, according to the Reuters news agency, which first reported the cuts.

Amazon confirmed to Al Jazeera that all the cuts to the company will affect corporate-level employees.

In a memo to the employees, shared with Al Jazeera, Amazon said workers in the United States impacted by the cuts will have a 90-day window to find a new role in the company.

“Teammates who are unable to find a new role at Amazon or who choose not to look for one, we’ll provide transition support including severance pay, outplacement services, health insurance benefits [as applicable], and more,” Beth Galetti, senior vice president of People Experience and Technology at Amazon, said in the note provided to Al Jazeera.

The announced reductions come amid a broader restructuring effort at the company. Earlier this week, Amazon announced it would close its brick-and-mortar Amazon Go and Amazon Fresh grocery stores, accounting for more than 70 locations across the US.

Some of those physical stores will be converted into Whole Foods Market locations. Amazon acquired the Austin, Texas–based grocery chain in 2017, and it has since grown by 40 percent.

The cuts come alongside increased investment in AI. In June, CEO Andy Jassy touted investment in generative AI and floated the possibility of redundancies.

“We expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company,” Jassy said in a blog post at the time.

According to the AFL-CIO CEO PayWatch tracker, Jassy made 43 times more than the median employee at the company.

Amazon’s stock tumbled in midday trading and was down 0.7 percent. Overall, however, the stock is up 7 percent year to date.

Wave of cuts

Amazon is the latest company in a wave of redundancies hitting the tech sector at the start of the year. Earlier this week, Pinterest announced it would cut 780 jobs as the social media company reallocated resources amid increased investment in AI. Last week, Autodesk said it would cut about 1,000 jobs, also tied to AI.

Layoffs.fyi, a website that tracks redundancies in the tech sector, shows that more than 123,000 tech workers lost their jobs in 2025 as companies, including Salesforce and Duolingo, doubled down on AI investments.

But it is not just the tech sector facing redundancies. On Tuesday, UPS also announced job cuts. The shipping giant said it would eliminate 30,000 jobs and close 24 facilities as it reduces deliveries with Amazon.

UPS stock was down more than 1.2 percent in midday trading.

China is showcasing itself as a solid business and trading partner to traditional allies of the United States and others who have been alienated by President Donald Trump’s politics, and some of them appear ready for a reset.

Since the start of 2026, Chinese President Xi Jinping has received South Korean President Lee Jae Myung, Canadian Prime Minister Mark Carney, Finnish Prime Minister Petteri Orpo and Irish leader Micheal Martin.

This week, United Kingdom Prime Minister Keir Starmer is on a three-day visit to Beijing, while German Chancellor Friedrich Merz is expected to visit China for the first time in late February.

Among these visitors, five are treaty allies of the US, but all have been hit over the past year by the Trump administration’s “reciprocal” trade tariffs, as well as additional duties on key exports like steel, aluminium, autos and auto parts.

Canada, Finland, Germany and the UK found themselves in a NATO standoff with Trump this month over his desire to annex Greenland and threats that he would impose additional tariffs on eight European countries he said were standing in his way, including the UK and Finland. Trump has since backed down from this threat.

China’s renewed sales pitch

While China has long sought to present itself as a viable alternative to the post-war US-led international order, its sales pitch took on renewed energy at the World Economic Forum‘s (WEF) annual summit in Davos, Switzerland, earlier this month.

As Trump told world leaders that the US had become “the hottest country, anywhere in the world” thanks to surging investment and tariff revenues, and Europe would “do much better” to follow the US lead, Chinese Vice Premier Li Hefeng’s speech emphasised China’s ongoing support for multilateralism and free trade.

“While economic globalisation is not perfect and may cause some problems, we cannot completely reject it and retreat to self-imposed isolation,” Li said.

“The right approach should be, and can only be, to find solutions together through dialogue.”

Li also criticised the “unilateral acts and trade deals of certain countries” – a reference to Trump’s trade war – that “clearly violate the fundamental principles and principles of the [World Trade Organization] and severely impact the global economic and trade order”.

Li also told the WEF that “every country is entitled to defend its legitimate rights and interests”, a point that could be understood to apply as much to China’s claims over places like Taiwan as to Denmark’s dominion over Greenland.

“In many ways, China has chosen to cast itself in the role of a stable and responsible global actor in the midst of the disruption that we are seeing from the US. Reiterating its support for the United Nations system and global rules has often been quite enough to bolster China’s standing, especially among countries of the Global South,” Bjorn Cappelin, an analyst at the Swedish National China Centre, told Al Jazeera.

The West is listening

John Gong, a professor of economics at the University of International Business and Economics in Beijing, told Al Jazeera that the recent series of trips by European leaders to China shows that the Global North is listening, too. Other notable signs include the UK’s approval of a Chinese “mega embassy” in London, Gong said, and progress in a years-long trade dispute over Chinese exports of electric vehicles (EVs) to Europe.

Starmer is also expected to pursue more trade and investment deals with Beijing this week, according to UK media.

“A series of events happening in Europe seems to suggest an adjustment of Europe’s China policy – for the better, of course – against the backdrop of what is emanating from Washington against Europe,” Gong told Al Jazeera.

The shifting diplomatic calculations are also clear in Canada, which has shown a renewed willingness to deepen economic ties with China after several spats with Trump over the past year.

Carney’s is the first visit to Beijing by a Canadian prime minister since Justin Trudeau went in 2017, and he came away with a deal that saw Beijing agree to ease tariffs on Canadian agricultural exports and Ottawa to ease tariffs on Chinese EVs.

Trump lashed out at news of the deal, threatening 100 percent trade tariffs on Canada if the deal goes ahead.

In a statement last weekend on his Truth Social platform, Trump wrote that Carney was “sorely mistaken” if he thought Canada could become a “‘Drop Off Port’ for China to send goods and products into the United States”.

The meeting between Carney and Xi this month also thawed years of frosty relations after Canada arrested Huawei executive Meng Wanzhou in late 2018 at the behest of the US. Beijing subsequently arrested two Canadians in a move that was widely seen as retaliation. They were released in 2021 after Meng reached a deferred agreement with prosecutors in New York.

In Davos, Carney told world leaders that there had been a “rupture in the world order” in a clear reference to Trump, followed by remarks this week to the Canadian House of Commons that “almost nothing was normal now” in the US, according to the CBC.

Carney also said this week in a call with Trump that Ottawa should continue to diversify its trade deals with countries beyond the US, although it had no plans in place yet for a free-trade agreement with China.

Filling the void

Hanscom Smith, a former US diplomat and senior fellow at Yale’s Jackson School of International Affairs, told Al Jazeera that Beijing’s appeal could be tempered by other factors, however.

“When the United States becomes more transactional, that creates a vacuum, and it’s not clear the extent to which China or Russia, or any other power, is going to be able to fill the void. It’s not necessarily a zero-sum game,” he told Al Jazeera. “Many countries want to have a good relationship with both the United States and China, and don’t want to choose.”

One glaring concern with China, despite its offer of more reliable business dealings, is its massive global trade surplus, which surged to $1.2 trillion last year.

Much of this was gained in the fallout from Trump’s trade war as China’s manufacturers – facing a slew of tariffs from the US and declining demand at home – expanded their supply chains into places like Southeast Asia and found new markets beyond the US.

China’s record trade surplus has alarmed some European leaders, such as French President Emmanuel Macron, who, in Davos, called for more foreign direct investment from China but not its “massive excess capacities and distortive practices” in the form of export dumping.

Li tried to address such concerns head-on in his Davos speech. “We never seek trade surplus; on top of being the world’s factory, we hope to be the world’s market too. However, in many cases, when China wants to buy, others don’t want to sell. Trade issues often become security hurdles,” he said.

Package-delivery giant targets savings of $3bn in 2026 amid push to slash deliveries for Amazon.

United Parcel Service, one of the world’s largest package-delivery companies, has announced plans to slash up to 30,000 jobs amid a push to cut costs and boost profits.

UPS, based in the US state of Georgia, will make the cuts as part of efforts to achieve savings of $3bn in 2026, UPS chief financial officer Brian ⁠Dykes said on an earnings call on Tuesday.

Dykes said the job cuts, part of plans to reduce UPS’s reliance on deliveries for its largest customer, Amazon, would be achieved through attrition and voluntary buyouts.

“We expect to offer a second voluntary separation programme for full-time drivers,” Dykes said.

UPS will also shut 24 buildings in the first half of the year and evaluate other buildings for closure in the second half, Dykes said.

He said the savings would be on top of $3.5bn in savings achieved in 2025 through cost-cutting measures, including the elimination of 26.9 million labour hours and the closure of 93 buildings.

Sean O’Brien, president of the Teamsters union, slammed the job cuts in a statement posted on social media.

“Corporate vultures giggled about giving their disrespectful driver buyout program another shot,” O’Brien said.

“Reminder: Teamsters overwhelmingly rejected UPS’s insulting payoff last year. We still know our worth. Drivers still endure violent winters and brutal heat to make UPS its billions. UPS must honor our contract and reward our members.”

UPS announced last year that it would reduce shipments for Amazon by half as part of plans to focus on a smaller volume of more lucrative deliveries.

The firm’s reported revenues of $24.5bn for the final three months of 2025, taking earnings for the year to $88.7bn, and projected revenues in 2026 are expected to hit $89.7bn.

UPS shares were largely unmoved on Tuesday, closing 0.22 percent higher.

United States President Donald Trump’s $5bn lawsuit against JPMorgan Chase resurfaces his accusations of debanking – the act of removing a person or organisation’s access to financial services.

The complaint, filed in a Florida court on Thursday, alleges that the bank singled him out for political reasons and closed several of his accounts following the attack on the US Capitol on January 6, 2021, which was perpetrated by his supporters.

“JPMC does not close accounts for political or religious reasons. We do close accounts because they create legal or regulatory risk for the company. We regret having to do so, but often rules and regulatory expectations lead us to do so,” the bank said in a statement.

While the lawsuit was filed in his personal capacity, the concept of debanking has long been in the crosshairs of the Trump White House.

Late last year, the White House launched a high-profile effort targeting the nation’s largest financial institutions, accusing them of closing accounts based on political bias. Within days, Trump signed an executive order restricting banks from denying accounts on those grounds.

Trump has long framed “debanking” as a systemic effort targeting conservatives. But evidence for this claim is limited.

A Reuters news agency review of more than 8,000 complaints to the Consumer Financial Protection Bureau (CFPB) found only 35 related to political or religious reasons, let alone targeting Christians or conservatives specifically.

The push by banks centres on the use of “reputational risk” as a standard that allows them to weigh the social or political fallout of doing business with a client.

Critics say this practice makes banks arbiters of morality – freezing, withholding, or closing accounts based not on financial considerations but on social and geopolitical concerns. This approach has pulled financial institutions into the middle of cultural and geopolitical debates.

While often cast as a partisan issue, data show that Trump’s core base, evangelical Christians, are not the ones typically targeted by debanking efforts.

A report from the Institute for Social Policy and Understanding (ISPU), a research organisation that looks at the experience of the US Muslim community, found that 27 percent of Muslim Americans and 14 percent of Jewish Americans have faced trouble banking, compared with negligible rates among Christian denominations, especially with Trump’s core base, evangelicals, at 8 percent.

Overall, 93 percent of Muslim Americans reported experiencing trouble with banking access. In one situation involving Citibank, the New York Chapter of the Council on American Islamic Relations (CAIR) accused the financial institution of not opening the account of a Muslim woman because of her husband, whom she wanted to nominate as a beneficiary and who is a Palestinian Muslim. CAIR did not release the name of the woman at the centre of the complaint.

“It [debanking] is a huge barrier for actually Muslims fulfilling philanthropic goals,” Erum Ikramullah, a senior research project manager at the ISPU, told Al Jazeera.

“It’s a huge barrier for the actual Muslim-based, Muslim-led organisations who are managing relief both domestically and overseas.”

Between October 2023 and May 2024, at least 30 US nonprofits providing humanitarian aid to Gaza have had accounts closed.

“Muslim Americans and Armenian Americans have faced de-banking on account of their last names,” Senator Elizabeth Warren, the Democrat from Massachusetts who founded the CFPB in 2013, said in a Senate Banking Committee hearing last year.

But Trump continues to allege that groups like Christians and conservatives are the ones discriminated against.

Among them include the National Committee for Religious Freedom, led by former Republican Senator and Kansas Governor Sam Brownback. Brownback alleges that Chase closed his account on religious grounds, a claim the bank denies.

Regardless, the push to take on the problem of debanking is a rare spot of bipartisanship in Washington, with Trump and Warren both agreeing that banks should change their ways.

Industry turmoil

A US banking regulator said last month that the nine largest US banks put restrictions on industries that it deems risky, but this has been a long-term issue for several industries.

Operation Choke Point, under the administration of former Democratic President Barack Obama, targeted exploitative industries like payday lenders and arms dealers. The initiative pushed banks to consider entire categories of businesses – and the individuals who worked in them – as reputationally risky, even when that view lagged cultural sentiment.

In response, Frank Keating, the then-CEO of the American Banking Association, slammed the move in an op-ed in The Wall Street Journal, saying that the “Justice Department [is] telling bankers to behave like policemen and judges”.

Ultimately, that scrutiny affected people working in several industries over the last decade, most particularly in adult entertainment, cannabis, and cryptocurrency.

Within months of the new guidance from the Obama administration, hundreds of adult performers lost access to banking services from Chase Bank. The ability to keep a bank account persisted for adult performers. In 2022, adult performer Alana Evans penned an op-ed for The Daily Beast describing how Wells Fargo closed her account.

The Free Speech Coalition, an adult industry trade group, found that 63 percent of adult workers have lost access to a bank account because of their work in the legal industry, and nearly 50 percent have been rejected for a loan because of the nature of the profession.

“I think that when I talk to a lot of people about this issue, or when I’ve talked to even legislators about this, they really can’t believe it, because it’s never been anything that they’ve encountered personally. The idea that a bank could shut off your account because they disagreed with the type of work you do is sort of inconceivable to most people,” Mike Stabile, the director of public policy for the Free Speech Coalition, told Al Jazeera.

The cannabis business has faced similar problems. Over the last decade, both laws and public sentiment around marijuana use have drastically changed. Now, more people use marijuana daily than drink alcohol, and recreational use is legal in 24 states as well as Washington, DC.

Yet, legitimate businesses that cater to this growing market share and those who work for them have been subject to debanking.

Kyle Sherman, the CEO and founder of Flowhub, a cannabis payment processing company, testified in front of the Senate Banking Committee last year that his employees are routinely discriminated against in consumer banking. He alleged that one of his employees was denied a mortgage because of what he does for a living, as well as others who have had their personal accounts closed.

While state laws have shifted on marijuana’s stance, federal laws have not kept up, making it harder for banks to navigate the reputational risk.

Trump recently eased pressure on the marijuana industry by reclassifying the substance as Schedule III, which means it is less harmful, but it does not change the legality of sale and interstate commerce on the federal level.

“In some of the states that have recently gone legal with recreational and medical cannabis, the individual entrepreneurs [there] were previously considered outlaws. It is hard for a banker to get over the perception that yesterday, you were an illegal activity, and today, you’re a legal activity,” said Terry Mendez, the CEO of Safe Harbor Financial, a financial services company for the cannabis industry.

There has been a bigger about-face with regard to the cryptocurrency industry. At first, crypto was seen as a safe haven for illicit transactions because the underlying technology allowed for anonymous transfers, making it difficult for banks to determine which transactions were legitimate and legal and which ones were not.

As the industry began to move into the mainstream, the challenges were amplified. Exchanges and startups faced debanking or sudden account closures, and even major platforms like Coinbase struggled to maintain reliable banking partners.

“Historically, banks were kind of more naturally averse to crypto companies, going back to like 2018, to 2020, 2021. Crypto companies would often, when registering for accounts with banks, say that they were software development companies to try and avoid the mention of crypto because of fear of not being able to open a bank account, which, of course, then means it’s harder to make a payroll. It’s hard to take in funds from investors; you can’t pay vendors,” Sid Powell, the CEO of the asset management firm Maple Finance, told Al Jazeera.

That was not helped by the collapse of FTX, the notorious cryptocurrency exchange, pushing banks to pull back from working with the crypto industry.

Sentiment is shifting now. Under Trump, who has embraced crypto, financial regulators last year withdrew guidance that suggested that banks should be careful when working with the crypto industry. Powell says the executive order could help crypto avoid debanking in the future.

“It [the executive order] kind of signals to the FDIC and the OCC that they should act in a more balanced way when it comes to crypto companies and crypto startups, instead of taking a more hostile approach, or the approach of kind of lumping everyone in with the worst of the industry, which tended to happen post-FTX,” Powell added.

Powell was referring to the The Federal Deposit Insurance Corporation, an independent agency created by Congress to maintain stability in the nation’s financial system, and The Office of the Comptroller of the Currency, an independent bureau of the US Department of the Treasury, which charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.

Trump’s personal gripes

Trump has also accused banks of not doing business with him, the primary driver of his interest in the debanking issue.

Banks can generally refuse to create accounts for potential customers who could be deemed as high risk.

“The president’s companies have filed [for] bankruptcy repeatedly. There have been years of reporting about financial institutions’ concerns with suspicious financial activity, and the president was found civilly liable for inflating the value of his assets that served as collateral for loans from financial institutions,” Graham Steele, an academic fellow at the Rock Center for Corporate Governance at Stanford University, told Al Jazeera.

Reuters reported last year that banks gauged Trump as a financial risk due to his plethora of legal challenges after his first term, including the suit brought by E Jean Caroll, which found Trump liable for sexual abuse. He has declared bankruptcy six times.

He also defaulted on loans totalling hundreds of millions of dollars several times, including a loan to Deutsche Bank. In 2024, a New York court ruled that the president fraudulently inflated his financial worth by more than $2bn.

“Notwithstanding the fact that the president is an inherently political figure, a financial institution could reasonably rely on any of these concerns, grounded in financial and legal risks, not ‘political’ beliefs, as a basis for declining to do business with a customer,” Steele said.

That did not stop the president from pointing fingers at banking giants, including Bank of America CEO Brian Moynihan.

“I hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank, and that includes a place called Bank of America,” Trump told the executive during a Q&A session at the World Economic Forum in Davos, Switzerland, last year.

The Trump family also sued Capital One last March. The lawsuit alleged that it debanked The Trump Organisation after Trump incited an insurrection at the US Capitol on January 6, 2021, after spreading misinformation alleging that he won the 2020 presidential election even though he had lost by a significant margin.

Trump debanks ‘liberal’ causes

Trump’s rhetoric on debanking is among his latest attempts to punish entities for political bias, while actively pushing actions that punish those who have viewpoints that oppose his own.

Trump has argued that debanking disproportionately targets conservatives and conservative-leaning businesses like firearms manufacturers. His pressure has moved the needle at Citibank. In June, it lifted its ban on banking services to gun sellers and manufacturers, a policy it put in place in 2018 after the shooting in Marjory Stoneman Douglas High School in Parkland, Florida, that left 17 people dead.

In March, his administration announced it would shut down a set of climate grants under the Greenhouse Gas Reduction Fund – known as the “green bank” – a $20bn programme created through the bipartisan Inflation Reduction Act signed by his predecessor, President Joe Biden, in 2022 to channel financing for climate projects into underinvested regions.

Environment and Protection Agency (EPA) administrator Lee Zeldin justified the decision by citing “misconduct, conflicts of interest, and potential fraud”, allegations he offered without evidence, and forced Citibank, which was holding the fund’s money for nonprofit distribution, to return the funds to the EPA.

The decision faced legal hurdles. But earlier this month, a US court of appeals allowed the Trump administration to continue axing the programme. The 2-1 ruling was decided by two judges appointed by Trump.

Last year, the White House also pressured companies seeking federal contracts to abandon diversity, equity and inclusion (DEI) programmes, which it has long portrayed, without evidence, as undermining merit-based hiring.

Citigroup, historically one of the most vocal supporters of DEI in the financial services sector, scrapped its programme. Citibank holds multiple federal contracts with agencies including the Department of Defense and the Consumer Financial Protection Bureau.

Bank of America and Wells Fargo followed suit in February, scaling back their initiatives as well, as did many other companies.

As part of the Trump administration’s immigration crackdowns, the White House has also pressured banks to cut financial services to immigrants. The administration is doing so by trying to cancel the social security numbers of migrants who have legal status in the US, which would essentially cut them off from access to basic financial services, including bank accounts and credit cards, The New York Times reported.

At the time, Leland Dudek, then the Social Security Administration’s acting commissioner and a Trump administration appointee, said the move to cut access would end their “financial lives”.

“There’s a real telling disconnect. They are saying, on the one hand, we wanna put a thumb on the scale and ensure that conservative groups are included in the financial system, while actively working to push out liberal coded groups by either freezing them out of the bank accounts when they get government grants, or trying to investigate and potentially bring criminal charges against the payment platform that serves liberal groups,” Steele said.

Steele questioned if taking on political bias would actually help communities that do not align with the Trump administration’s stated values and conservative viewpoints.

“I think one of the other concerns here is that a lot of this depends on how the executive order is going to be enforced,” Steele said.

Japanese Prime Minister Sanae Takaichi’s tax and spending pledges in advance of snap elections next month have sent jitters through global markets.

Japanese government bonds and the yen have been on a rollercoaster since Takaichi unveiled plans to pause the country’s consumption tax if her Liberal Democratic Party wins the February 8 vote.

The market turmoil reflects concerns about the long-term sustainability of Japan’s debt levels, which are the highest among advanced economies.

The volatility has extended beyond Japan, highlighting broader fiscal sustainability worries in an era in which the United States and other major economies are running huge deficits.

What has Takaichi promised on the economy?

Takaichi said last week that she would suspend the country’s 8 percent consumption tax on food and non-alcoholic beverages for two years if her government is returned to power, following her dissolution of the House of Representatives.

Based on Japanese government data, Takaichi’s plan would result in an estimated revenue shortfall of 5 trillion yen ($31.71bn) each year.

Takaichi, a proponent of predecessor Shinzo Abe’s agenda of high public spending and ultra-loose monetary policy, said the shortfall could be made up by reviewing existing expenditures and tax breaks, but did not provide specific details.

Takaichi’s tax pledge comes after her Cabinet in November approved Japan’s largest stimulus since the COVID-19 pandemic.

The package, worth 21.3 trillion yen ($137bn), included one-time cash handouts of 20,000 yen per child for families, subsidies for utility bills amounting to about 7,000 yen per household over a three-month period, and food coupons worth 3,000 yen per person.

Why have Takaichi’s pledges unnerved markets?

Japan’s long-term government bond yields soared following Takaichi’s announcement.

Yields on 40-year bonds rose above 4 percent on Tuesday, the highest on record, as investors exited from Japanese government debt en masse.

Bond markets, through which governments borrow money from investors in exchange for paying out a fixed rate of interest, are closely watched as a gauge of the health of countries’ balance sheets.

While typically offering lower returns than stocks, government bonds are seen as low-risk investments as they have the backing of the state, making them attractive to investors seeking safe places to park their money.

As confidence in a government’s ability to repay its debts declines, bond yields rise as investors seek higher interest payments for holding riskier debt.

“When Prime Minister Takaichi announced a planned reduction in consumption taxes, this made existing bond-holders of Japan’s debt uneasy, requiring a higher compensation for the risk they bear,” Anastassia Fedyk, an assistant professor of finance at the Haas School of Business of the University of California, Berkeley, told Al Jazeera.

“As a result, bond prices dropped and yields rose. And yes, this is a general pattern that applies to other countries, too, though Japan has an especially high level of debt, making its position more vulnerable.”

Japan’s debt-to-GDP ratio already exceeds 230 percent, following decades of deficit spending by governments aiming to reverse the country’s long-term economic stagnation.

The East Asian country’s debt burden stands far above that of peers such as the US, UK and France, whose debt-to-GDP ratios are about 125 percent, 115 percent and 101 percent, respectively.

At the same time, the Bank of Japan (BOJ) has been scaling back bond purchases as part of its move away from decades of ultra-low interest rates, limiting its options for interventions to bring yields down.

“Bond investors reacted because her headline package looks like large, near-term fiscal loosening at exactly the moment the BOJ is trying to normalise policy,” Sayuri Shirai, a professor of economics at Keio University in Tokyo, told Al Jazeera.

How does all this affect the rest of the world?

The sell-off in Japanese bonds reverberated through markets overseas, with yields on 30-year US Treasuries rising to their highest level since September.

As Japanese bond yields rise, local investors are able to earn higher interest payments at home.

That can incentivise investors to offload other bonds, such as US Treasuries.

As of November, Japanese investors held $1.2 trillion in US Treasuries, more than any other foreign group of buyers.

In an interview with Fox News last week, US Treasury Secretary Scott Bessent expressed concern about the impact of Japan’s bond market on US Treasury prices and said he anticipated that his Japanese counterparts would “begin saying the things that will calm the market down.”

Japan’s long-term bond yields fell on Monday amid the expectations that Japanese and US authorities would step in to prop up the yen.

On Friday, The New York Times and The Wall Street Journal reported that the Federal Reserve Bank of New York had inquired about the cost of exchanging the Japanese currency for US dollars.

“Japan matters globally through flows. If Japanese government bond yields rise, Japanese investors can earn more at home, potentially reducing demand for foreign bonds; that can nudge global yields and risk pricing,” Shirai said.

“This is why global-market pieces have framed Japan’s bond move as a wider rates story.”

Higher bond yields in Japan, the US and elsewhere raise the cost of borrowing and servicing the national debt.

In a worst-case scenario, a sharp escalation in interest rates can lead to a country defaulting on its debts.

Masahiko Loo, a fixed income strategist at State Street Investment Management in Tokyo, said that the reaction of international investors to Takaichi’s plans reflects growing sensitivity to fiscal credibility in highly indebted economies.

“Yes, Japan may be the spark, but the warning applies equally to the US and others with large structural deficits,” Loo told Al Jazeera.

Is Japan on the verge of a financial crisis?

Probably not.

While Japan is more indebted than its peers, its fiscal position is more sustainable than it might appear due to factors specific to the country – at least in the short to medium term – according to economists.

The vast majority of Japan’s debt is held by local institutions and denominated in yen, reducing the likelihood of a panic induced by foreign investors, while interest rates are far lower than in other economies.

“The debt situation is more manageable than a lot of people think,” Thomas Mathews, head of markets for Asia Pacific at Capital Economics, told Al Jazeera.

“Net debt-to-GDP is on a downward trajectory, and Japan’s budget deficit isn’t all that big by global standards.”

Loo of State Street Investment Management said that the turmoil surrounding Japan had more to do with a “communication gap around fiscal sustainability and policy coordination” than the country’s solvency.

“That said, markets are likely to continue testing the feasibility of the agenda, as even fiscally sanguine countries have, at times, been disciplined by market forces,” Loo said.

India and the European Union have agreed on a huge trade deal creating a free trade zone of two ‌billion people, European ​Commission President Ursula ‍von der Leyen and Indian Prime Minister Narendra Modi have said.

In a post on X during her visit to New Delhi on Tuesday, von der Leyen said the two parties were “making history today”.

“We have concluded the mother of all ​deals. ‌We have created a free trade zone of two ‌billion people, with ‌both sides ⁠set to benefit,” she added.

Modi said the landmark agreement, following nearly two decades of on-and-off ​negotiations, had been reached, hailing its benefits before a meeting with von der Leyen and European Council President Antonio Costa.

“This deal will bring many opportunities for India’s 1.4 billion and many millions of people of the EU,” he said.

The deal will cover about 25 percent of the global gross domestic product (GDP), Modi said, adding that India will get a boost in sectors including textiles, gems and jewellery, and leather goods.

The trade pact comes amid a push by Brussels and New Delhi to open up new markets in the face of tariffs imposed by the United States and Chinese export controls.

It will pave the way for ‍India, the world’s most populous nation, to open up its huge, protected market to free trade with the 27-nation EU, its biggest trading partner.

The EU views India as an important market for the future, while New Delhi sees Europe as an important potential source of technology and investment.

The formal signing of the deal will take ‌place after legal vetting, expected to last five to six months, the Reuters news agency reported, quoting an Indian government official aware of the matter. The official said the deal was expected to be implemented within a year.

EU exports ‘expected to double’

The EU said it expected its exports to India to double by 2032 as a result of the deal.

Bilateral trade between India and the EU in goods has already grown by nearly 90 percent over the past decade, reaching 120 billion euros ($139bn) in 2024, according to EU figures. Trade in services accounts for a further 60 billion euros ($69bn), EU data shows.

Under the agreement, tariffs on 96.6 percent of EU goods exports to India would be eliminated or reduced, EU officials said. The deal would save up to 4 billion euros ($4.74bn) a year in duties on European products, officials said.

Among the products that would have tariffs all or mostly eliminated were machinery, chemicals and pharmaceuticals.

Tariffs on cars would gradually reduce to 10 percent with a quota of 250,000 vehicles a year, officials said, while EU service providers would gain privileged access to India in key areas such as financial and maritime services. Tariffs on EU aircraft and spacecraft would be eliminated for almost all products.

Tariffs would be cut to 20-30 percent on EU wine, 40 percent on spirits, and 50 percent on beer, while tariffs on fruit juices and processed food would be eliminated.

“The EU stands to gain the highest level of access ever granted to a trade partner in the traditionally protected Indian market,” von der Leyen said on Sunday. “We will gain a significant competitive advantage in key industrial and agri-good sectors.”

Last-minute talks on Monday had focused on several sticking points, including the impact of the EU’s carbon border tax on steel, sources familiar with the discussions told the AFP news agency.

Talks on the India-EU trade deal were launched in 2007, but for many years made little progress. However, Russia’s full-scale invasion of Ukraine led to the relaunch of talks in 2022, while United States President Donald Trump’s aggressive tariff policy spurred rapid progress in negotiations.

India and the EU also announced the launch of a security and defence partnership, similar to partnerships the EU has with Japan and South Korea, as von der Leyen said Brussels and New Delhi would grow their strategic partnership further.

The moves come as India, which has relied on Russia for key military hardware for decades, has tried to reduce its dependence on Moscow by diversifying imports and pushing its domestic manufacturing base, while Europe is doing the same with regard to Washington.

The EU-India deal comes days after Brussels signed a key pact with the South American bloc Mercosur, following deals last year with Indonesia, Mexico and Switzerland. During the same period, New Delhi ​finalised pacts with the United Kingdom, New Zealand and ‌Oman.

Carney has been under pressure from the opposition to lower prices of food and other essentials for lower-income people.

Canadian Prime Minister Mark Carney has announced a multibillion-dollar package as part of a series of measures aimed at lowering the costs of food and other essentials for low-income families.

On Monday, Carney announced a five-year 25 percent boost to the Goods and Services Tax (GST) credit that starts this year.

The GST credit, which is being renamed the Canada Groceries and Essentials Benefit, will provide additional, significant support for more than 12 million Canadians, Carney said in a statement.

The government will also provide a one-time top-up equivalent to a 50 percent increase this year to eligible residents.

“We’re bringing in new measures to lower costs and make sure Canadians have the support they need now,” Carney said.

The measures would cost the government 3.1 billion Canadian dollars ($2.26bn) in the first year and between 1.3 billion Canadian dollars ($950m) and 1.8 billion Canadian dollars ($1.3bn) in each of the following four years, he told reporters at a news conference, according to the Reuters news agency.

While overall consumer price inflation in Canada has eased and came in at 2.4 percent for December, “food price inflation remains high due to global and domestic factors, including supply chain disruptions, higher US tariffs from the trade war and climate change/extreme weather”, Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera.

The government is also setting aside 500 million Canadian dollars ($365m) from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians, and will create a 150 million Canadian dollar ($110m) Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.

Changing landscape

“The global landscape is rapidly changing, leaving economies, businesses, and workers under a cloud of uncertainty. In response, Canada’s new government is focused on what we can control: building a stronger economy to make life more affordable for Canadians,” Carney said.

The new measures were unveiled on the day Parliament resumes after its winter break.

Opposition parties have urged Carney to reduce prices of daily goods, especially as sections of the economy have come under pressure from United States President Donald Trump, who has slapped 35 percent tariffs on the country as well as separate tariffs on steel, aluminium and lumber, leading to job losses in those sectors.

Over the weekend, Trump escalated his threats and said he would impose a 100 percent tariff on Canada if it makes a trade deal with China. Carney has been working on diversifying Canada’s exports away from the US, its biggest trading partner and to which nearly 80 percent of its exports went last year, including by increasing business with other markets like China.