China’s fiscal stimulus pushed its four-month budget deficit to a record high, as the government ramped up support for the economy during an escalation in its trade conflict with the US.

China's fiscal stimulus has pushed its four-month budget deficit to a record high, as the government ramps up support for the economy during an escalation in its trade conflict with the United States.

In addition, the US economy has also been significantly affected by the US' tariff policy. According to data from the US Department of Commerce, the US GDP shrank by 0.3 percent year-on-year in the first quarter of this year. This is the worst quarterly performance of the US economy since 2022.

Given its immediacy, it is understandable that much of the economic debate has focused on President Trump’s highly unorthodox import tariff policy. However, that should not divert our attention from the reckless budget proposal being put forward by the Trump administration.

The Treasury Secretary pushed back against inflation concerns and praised the uncertainty caused by Trump as a negotiating tactic for trade talks.

WASHINGTON: Around the world, yields on longer-dated sovereign debt have soared as investors question the ability of governments to cover massive budget deficits.

Stephen Roach thinks the US pursuing a global minimum tariff while also penalising China increases the risk of a global recession

In its current form, the budget legislation moving through Congress would exacerbate the fiscal challenges we face.