Inferior US Performance, Stagnant Europe, and Rising China Amid Trump's Policy Shifts
A series of national GDP estimates and corporate earnings reports were released just days before the initial phase of proposed US tariffs on imports from Canada and Mexico is set to take effect.
TroibNews 
Editor's note: Ankit Prasad is an editor and business commentator for CN. The article reflects the author's views and not necessarily those of CN.
US GDP growth experienced a slight decline, coming in below analysts' expectations at 2.3 percent for the fourth quarter and projected at 2.8 percent for 2024, as reported by the Associated Press. This news arrives just days before the implementation of the new Trump administration's widely discussed tariff policies, which will start with a 25 percent tax on imports from Canada and Mexico, the US's closest neighbors and largest trading partners.
The fact that Trump remained undecided about including oil imports in the tariffs until shortly before their rollout suggests there is still some flexibility, or perhaps a degree of hesitation.
Trump's recent interactions, particularly the brief and intense standoff over the return of illegal immigrants to Colombia, indicate that tariffs may be employed more as immediate threats than as well-considered trade instruments in the early days of his presidency.
The impact of these developments on both US-based and foreign manufacturers, along with their long-term strategies, remains uncertain.
Despite these concerns, some American companies have distinguished themselves this earnings season, even as the ongoing DeepSeek situation looms large. Although Nvidia, Alphabet, and Amazon have yet to report their results, the other members of the "Magnificent 7" have shared their earnings, with Meta standing out prominently.
The company led by Mark Zuckerberg reported a remarkable 49 percent increase in fourth-quarter profits, reaching $20.8 billion, alongside a 21 percent rise in revenue to $48.4 billion. Microsoft also posted strong fourth-quarter results, with revenue up 12 percent to $69.6 billion and net income rising 10 percent to $24.1 billion. Apple reported a 7 percent increase in quarterly profits to $36.3 billion and a 4 percent uptick in revenues to $124.3 billion, although its iPhone revenue fell by 1 percent. Meanwhile, Tesla, spearheaded by Elon Musk, saw its fourth-quarter profits decline to $2.6 billion due to one-time items, and its revenue, albeit up 2 percent, fell short of analysts' expectations at $25.7 billion.
As US businesses contend with mounting foreign competition and brace for the ramifications of potential Trump policies and funding cuts, observers across the Atlantic may watch with a mix of admiration and envy.
The US Federal Reserve maintained its key interest rates stable after three consecutive cuts last year, while the European Central Bank lowered its rates by 25 basis points to 2.75 percent in a continuing effort to stimulate the eurozone economy. This area recorded only 0.7 percent annual growth and none in the last quarter, according to Eurostat data. Germany, the world’s third-largest economy, which is preparing for elections, has experienced economic contractions for two consecutive years and downgraded its growth forecast for 2025 to just 0.3 percent. In contrast, France managed a 1.1 percent GDP increase for the year despite a 0.1 percent decline in the final quarter, amidst its own political challenges.
While Europe navigates pressing issues, which were highlighted both in Trump's unscripted remarks at Davos 2025 and the prominent Draghi report, the Eastern hemisphere continues to present a different economic picture.
China, the world’s second-largest economy, surpassed analysts' projections with a fourth-quarter growth of 5.4 percent, achieving its yearly GDP growth target of 5 percent, according to the National Bureau of Statistics. Additionally, key industries reported combined profits exceeding $1 trillion in 2024 after a strong rebound in December, and China's annual trade surplus reached a historically high $990 billion.
Nearby, India's economic survey forecast a growth rate of 6.3 percent to 6.8 percent for the coming fiscal year, recovering from a drop to 5.4 percent in the quarter ending September.
As February unfolds, the global economy remains turbulent, with some regions more affected than others, particularly in light of potential challenges originating from the White House. Policymakers and business leaders are sure to explore every possible strategy to navigate these waters, guided in part by the developments with Canada and Mexico. Thus, the scenario begins to unfold.
Mark B Thomas for TROIB News
US GDP growth experienced a slight decline, coming in below analysts' expectations at 2.3 percent for the fourth quarter and projected at 2.8 percent for 2024, as reported by the Associated Press. This news arrives just days before the implementation of the new Trump administration's widely discussed tariff policies, which will start with a 25 percent tax on imports from Canada and Mexico, the US's closest neighbors and largest trading partners.
The fact that Trump remained undecided about including oil imports in the tariffs until shortly before their rollout suggests there is still some flexibility, or perhaps a degree of hesitation.
Trump's recent interactions, particularly the brief and intense standoff over the return of illegal immigrants to Colombia, indicate that tariffs may be employed more as immediate threats than as well-considered trade instruments in the early days of his presidency.
The impact of these developments on both US-based and foreign manufacturers, along with their long-term strategies, remains uncertain.
Despite these concerns, some American companies have distinguished themselves this earnings season, even as the ongoing DeepSeek situation looms large. Although Nvidia, Alphabet, and Amazon have yet to report their results, the other members of the "Magnificent 7" have shared their earnings, with Meta standing out prominently.
The company led by Mark Zuckerberg reported a remarkable 49 percent increase in fourth-quarter profits, reaching $20.8 billion, alongside a 21 percent rise in revenue to $48.4 billion. Microsoft also posted strong fourth-quarter results, with revenue up 12 percent to $69.6 billion and net income rising 10 percent to $24.1 billion. Apple reported a 7 percent increase in quarterly profits to $36.3 billion and a 4 percent uptick in revenues to $124.3 billion, although its iPhone revenue fell by 1 percent. Meanwhile, Tesla, spearheaded by Elon Musk, saw its fourth-quarter profits decline to $2.6 billion due to one-time items, and its revenue, albeit up 2 percent, fell short of analysts' expectations at $25.7 billion.
As US businesses contend with mounting foreign competition and brace for the ramifications of potential Trump policies and funding cuts, observers across the Atlantic may watch with a mix of admiration and envy.
The US Federal Reserve maintained its key interest rates stable after three consecutive cuts last year, while the European Central Bank lowered its rates by 25 basis points to 2.75 percent in a continuing effort to stimulate the eurozone economy. This area recorded only 0.7 percent annual growth and none in the last quarter, according to Eurostat data. Germany, the world’s third-largest economy, which is preparing for elections, has experienced economic contractions for two consecutive years and downgraded its growth forecast for 2025 to just 0.3 percent. In contrast, France managed a 1.1 percent GDP increase for the year despite a 0.1 percent decline in the final quarter, amidst its own political challenges.
While Europe navigates pressing issues, which were highlighted both in Trump's unscripted remarks at Davos 2025 and the prominent Draghi report, the Eastern hemisphere continues to present a different economic picture.
China, the world’s second-largest economy, surpassed analysts' projections with a fourth-quarter growth of 5.4 percent, achieving its yearly GDP growth target of 5 percent, according to the National Bureau of Statistics. Additionally, key industries reported combined profits exceeding $1 trillion in 2024 after a strong rebound in December, and China's annual trade surplus reached a historically high $990 billion.
Nearby, India's economic survey forecast a growth rate of 6.3 percent to 6.8 percent for the coming fiscal year, recovering from a drop to 5.4 percent in the quarter ending September.
As February unfolds, the global economy remains turbulent, with some regions more affected than others, particularly in light of potential challenges originating from the White House. Policymakers and business leaders are sure to explore every possible strategy to navigate these waters, guided in part by the developments with Canada and Mexico. Thus, the scenario begins to unfold.
Mark B Thomas for TROIB News
