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WTO warns Trump tariffs could shrink trade, further strain in Indo-Bangla ties, US-Iran nuclear talks move ahead – The world this week

From WTO warning of trade slump to India’s push for an interim trade deal with the US, and another round of nuclear talks between US and Iran, several developments took place in the world this week.

Trump, Powell, WTO, the US, Gaza, YemenThe US Federal Reserve chair Jerome Powell said on Wednesday that the tariffs would dent the country’s economy and stoke inflation. (Reuters)

WTO warns of global trade cut, India pushes through interim trade deal with the US, pressure mounts on Russia, Ukraine to end the war, Iran and the US hold another round of nuclear talks, and Sudan’s civil war grinds on – here’s a roundup of key global news from this week.

India pushes through interim trade deal with US

The trade war continued to send jitters through global markets this week with the World Trade Organization (WTO) warning that global trade could shrink by 1.5 per cent this year. In the meantime, India continued its efforts to clinch an interim trade deal with the US before the 26 per cent reciprocal tariffs kick in. 

“The volume of world merchandise trade is expected to decline by 0.2% in 2025 under current conditions, nearly three percentage points lower than what would have been expected under a “low tariff” baseline scenario,” the WTO said, adding, “Trade could shrink even further, to -1.5% in 2025, if the situation deteriorates.” 

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The situation appeared increasingly bleak with the US Federal Reserve chair Jerome Powell saying on Wednesday that the tariffs would dent the country’s economy and stoke inflation

Powell said the steps taken by the Trump administration “will create challenges” for the central bank to meet its job and inflation mandates this year. “These are very fundamental policy changes. There isn’t a modern experience of how to think about this,” he said. 

However, US President Donald Trump on Thursday signalled that tit-for-tat China tariffs may be near end, and negotiations with other countries could lead to lower tariffs. “I don’t want them to go higher because at a certain point you make it where people don’t buy,” Trump told reporters about tariffs at the White House. 

On Wednesday, the US increased tariffs on imports from China to the US to 245 per cent as a result of Beijing’s retaliatory actions. China offered a cautious response to the new tariff rate. Earlier on Wednesday, China’s Foreign Ministry spokesperson Lin Jian said, “If the US truly wants to resolve issues through dialogue, it must stop exerting maximum pressure.” 

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Meanwhile, India continued to push through an interim trade deal within the 90-day window. New Delhi is also pinning hopes on the upcoming four-day visit of US Vice-President J D Vance starting next week, saying it will give “further boost” to the India-US bilateral ties.

“All the bilateral issues will be discussed and we are very positive that the visit will give further boost to our bilateral ties,” Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal said during the weekly media briefing and indicated that issues relating to trade and tariff will figure during the talks.

India-Bangladesh ties remain tense 

In the meantime, India-Bangladesh relations showed signs of further erosion with New Delhi hitting out at Dhaka for its remarks on the Waqf Act-related protests in West Bengal and asking it to focus on protecting the rights of its minorities instead of indulging in “virtue signalling”.

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“We reject the remarks made by the Bangladesh side with regard to the incidents in West Bengal. This is a barely disguised and disingenuous attempt to draw a parallel with India’s concerns over the ongoing persecution of minorities in Bangladesh where the criminal perpetrators of such acts continue to roam free,” MEA spokesperson Jaiswal said on Friday. 

“Instead of making unwarranted comments and indulging in virtue signalling, Bangladesh would do better to focus on protecting the rights of its own minorities,” he added. 

On Thursday, Bangladesh Chief Advisor Muhammad Yunus’s press secretary Shafiqul Alam said, “We condemn attacks on Muslims causing loss of lives and properties. We urge the government of India and West Bengal to take all steps to fully protect the minority Muslim population.” 

India-Bangladesh ties have been on a downward trajectory since the ouster of Prime Minister Sheikh Hasina in August last year.

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Last week, India withdrew the transshipment facility for Bangladesh’s export cargo, saying it was causing “significant congestion” in Indian airports and ports. However, on Thursday this week, the MEA said that the decision needs to be seen against Bangladesh’s earlier actions.

“We had taken that measure because of the congestion that we see on our ports and our airports. But I would also remind you, please do have a look at the developments that have happened on the Bangladeshi side prior to us announcing these measures,” said Jaiswal. 

However, while its ties with India remained tense, Bangladesh sought to mend its strained relations with Pakistan with the two sides holding their first foreign secretary-level talks in 15 years in Dhaka this week.

“We have raised the historically unresolved issues with Pakistan,” Bangladesh Foreign Secretary M Jashim Uddin told reporters after the Foreign Office Consultation (FOC) meeting with Pakistani counterpart Amna Baloch. Bangladesh also demanded a “formal public apology for the genocide committed by the then Pakistani military in 1971.”

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Meanwhile, the US on Friday urged citizens to reconsider their travel plans to Bangladesh as the law and order situation deteriorated in the country after months of communal violence. “Reconsider travel to Bangladesh due to civil unrest, crime, and terrorism. Some areas have increased risk,” the advisory by the US State Department read.

US warns of dropping Ukraine-Russia peace efforts

On another front, the US signaled growing impatience and warned that it may “move on” from trying to broker a peace agreement between Russia and Ukraine if no progress is made in a “matter of days”. The comments came on Friday after high-level talks among US, Ukrainian and European officials hosted by France. 

US Secretary of State Marco Rubio and Presidential Envoy Steve Witkoff met top Ukrainian and European officials at the French presidential palace and produced outlines for steps toward peace.

“We are now reaching a point where we need to decide whether this is even possible or not,” Rubio told reporters. “Because if it’s not, then I think we’re just going to move on. It’s not our war. We have other priorities to focus on.”

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Another meeting is expected next week in London. Rubio suggested that it could be decisive in determining whether the Trump administration continues its involvement. He said the US administration wants to decide “in a matter of days.”

The talks came just days after Russia’s attack on the centre of Sumy, a city about 30 kilometers from Ukraine’s border with Russia, on Palm Sunday (the Sunday before Easter) in which at least 34 people were killed and 119 others wounded. 

“The strike hit right in the heart of the city on Palm Sunday,” Ukrainian President Volodymyr Zelenskyy said, and called for a “tough” international response as “talks have never stopped ballistic missiles and air bombs”. US security guarantee has been a key concern of Zelenskyy.

The Associated Press also reported that when asked about Rubio’s comments, Kremlin spokesman Dmitry Peskov told reporters that “fairly complex” negotiations are ongoing between Russia and the US. The diplomatic churn came amid another round of nuclear talks between the US and Iran. 

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Iran, US hold another round of nuclear talks 

Iran and the US held the second round of nuclear talks in Rome and said they made “progress” in negotiations. They will meet again next week.

Iran’s Foreign Minister Abbas Araqchi and Trump’s Middle East Envoy Steve Witkoff held talks indirectly through mediators from Oman.

The Associated Press quoted a senior US official as saying that the sides “made very good progress”.

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Araghchi wrote on X that they made “progress on principles and objectives of a possible deal.” He added, however, that “optimism may be warranted but only with a great deal of caution.”

The first round of nuclear talks, held on April 12 in the Omani capital of Muscat, were also described as “positive and constructive”.

Ahead of the talks, diplomacy, strategic manoeuvring, military threats, and muddled messages sent mixed signals. The head of the United Nations’ nuclear watchdog visited Iran on Thursday this week and said the talks over Tehran’s rapidly advancing nuclear programme are “in a very crucial” stage.

Rafael Mariano Grossi, Director of the International Atomic Energy Agency (IAEA), also acknowledged that his agency would play a key role in verifying compliance by Iran should a deal be reached.

Grossi’s trip coincided with Saudi Arabia’s Defence Minister Prince Khalid bin Salman’s visit to Iran on Thursday where he met with Supreme Leader Ali Khamenei and delivered a letter from King Salman.

“We discussed our bilateral relations and topics of mutual interest,” he wrote on X. Prince Khalid also met President Masoud Pezeshkian and chief of staff of Iran’s armed forces Mohammad Bagheri.

The visit was seen as building on the renewed diplomatic engagement since the two sides reached a Chinese-mediated rapprochement in March 2023. 

However, ahead of the new round of talks, Iran’s Foreign Minister Abbas Araghchi expressed doubts over the US’s intentions. “Although we have serious doubts about the intentions and motivations of the American side, in any case, we will participate in tomorrow’s negotiations,” Araghchi said on Friday. 

US President Trump had issued warnings of military strikes against Iran if the talks failed and stated that Israel would be the “leader” of such strikes. In recent weeks, the US mobilised firepower in and around West Asia, with a second US aircraft carrier reported to be operating in the Arabian Sea this week. 

The talks also coincided with a deadly US strike against the Iran-backed Houthis in Yemen in which over 70 people were reportedly killed and many others wounded. The strike on a key oil port on Yemen’s Red Sea coast controlled by the Houthis marked a major escalation in the US military campaign against the militant group. 

Israel’s unrelenting bombings in Gaza

At the same time, Israel’s relentless bombings continued in Gaza with the UN’s World Food Programme issuing an urgent warning that “Gaza needs food now” as hundreds of thousands of people are at risk of hunger. 

Israel bombed homes, tent camps in Gaza since dawn on Friday in which at least 64 people were killed and the casualties continue to mount, Al Jazeera reported. 

Israel’s unrelenting attacks seemingly aimed to increase pressure on Palestinian militant Islamist group Hamas to disarm and return hostages it captured in October 2023. Hamas is holding 59 hostages, 24 of whom are believed to be alive. 

However, Hamas has reportedly rejected Israel’s latest ceasefire proposal, offering a 45-day ceasefire in return for the release of 10 hostages. It said it was ready to negotiate a deal that would see the release of all hostages in return for an end to the war. 

Israel also said this week that its troops will remain in Gaza, Lebanon and Syria indefinitely. The army “will remain in the security zones as a buffer between the enemy and [Israeli] communities in any temporary or permanent situation in Gaza – as in Lebanon and Syria”, Israel’s Defence Minister Israel Katz said in a statement on Wednesday. 

Sudan paramilitary force forms rival govt

Meanwhile, in Africa, paramilitary Rapid Support Forces (RSF) fighting against the Sudanese military said it is forming a rival government that will rule parts of the country controlled by it, including the western Darfur region.

RSF commander Gen Mohamed Hamdan Dagalo announced the move in a speech on Tuesday as the northeastern African nation marked two years of civil war. “On this anniversary, we proudly declare the establishment of the Government of Peace and Unity,” Dagalo said in a recorded speech, adding that other groups have joined the RSF-led administration, including a faction of the Sudan’s Liberation Movement, which controls parts of Kordofan region.

The announcement came days after the RSF and its allied militias went on a rampage in famine-hit camps in North Darfur province, where around 700,000 Sudanese sought refuge since the war broke out in April 2023.

The attack on the Zamzam and Abu Shouk camps killed more than 400 people, and forced up to 400,000 people to flee the Zamzam camp, the UN humanitarian office said, citing local sources.

The UN called on the international community to help the Sudanese end the war, spelling an unending cycle of displacement, hunger and violence. 

Since April 15, 2023, when war broke out between the military and the RSF, at least 24,000 people have reportedly been killed and about 13 million have been forced from their homes, including around 4 million who have crossed into neighbouring countries.

 Send your feedback and ideas to ashiya.parveen@indianexpress.com.

Ashiya Parveen is working as Commissioning Editor for the UPSC Section at The Indian Express. She also writes a weekly round up of global news, The World This Week. Ashiya has more than 10 years of experience in editing and writing spanning media and academics, and has both academic and journalistic publications to her credit. She has previously worked with The Pioneer and Press Trust of India (PTI). She also holds a PhD in international studies from Centre for West Asian Studies, JNU. ... Read More

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