AGP Executive Report

Trade Diplomacy: UK and India say free-trade implementation talks are moving fast, with any steel-related friction unlikely to reopen the deal, though timing could slip. Tariffs & Bargaining: The US is pushing new forced-labour-linked tariff proposals, and analysts call it “pressure” to secure a tougher bargain in India talks. Monetary Policy: India’s RBI kept the repo rate at 5.25% for a second straight meeting, citing West Asia-driven energy risks and rupee weakness while keeping a neutral stance. Capital Flows: India scrapped capital gains and withholding taxes on foreign investors’ government bond holdings to attract inflows and ease balance-of-payments pressure. Global Outlook: OECD warns the Middle East conflict could drag growth toward recession if disruptions persist into 2027, with higher inflation risks. AI & Labor: South Korea’s labour minister urged big tech firms to share excess AI windfall profits with suppliers and workers to narrow inequality. Energy Policy: Japan’s economy ministry set numerical targets for replacing decommissioned nuclear reactors, aiming to sustain a 20% nuclear share by 2040. Regional Growth Links: Korea and Serbia signed a CEPA to cut tariffs on most goods and deepen supply chains for chips, EVs and auto parts. FX Watch: Korea’s finance minister said “extra vigilance” is being taken on FX volatility as recovery continues.

Trade & Regulation: Canada is reviewing rules that required foreign streamers to invest 15% of revenues into Canadian content, as writers and filmmakers warn the shift could raise uncertainty for the film and TV sector. Jobs & Retail: South Africa’s Employment Minister stepped in to pause Pick n Pay retrenchments affecting 22,000 jobs, pushing talks for alternatives. Energy Shock & Growth Outlook: The OECD warns Iran-related disruptions could keep global inflation elevated and growth weak, with risks of a deep slowdown if tensions persist. US–EU Trade Rules: U.S. Trade Representative Jamieson Greer says tariff caps in deals with the EU and Japan will be respected, while forced-labor probes could still raise tariffs beyond those caps. AI & Security: Canada’s PM Mark Carney says reliance on foreign AI platforms could expose Canadian data and tilt markets against local firms. Tech Industrial Policy: China is rolling out a ministry-province pilot plan to develop independently made 6G solutions by 2029. Regional Connectivity: Turkey says talks with Saudi Arabia aim to revive the Hejaz Railway and extend it toward Oman, plus it is preparing a major development road corridor. Russia Investment Mood: Russia’s capital investment fell sharply in Q1 2026, while Putin’s forum highlighted a split between elites urging prolonged confrontation vs ending the Ukraine war.

US-China Economic Security: Secretary of State Marco Rubio told Congress that competition with China now sits at the center of US diplomacy, driven by economic security, supply-chain risk, and tech leadership. OECD Industrial Policy: Qatar’s finance minister joined OECD talks in Paris on “getting industrial policies right” for open markets, growth, and resilience. India Capital Flows: India is moving to scrap long-term capital gains tax on foreign portfolio investors’ holdings in government securities to attract inflows and support the rupee amid Iran-war and oil-price pressure. US Forced-Labour Tariffs: The US proposes double-digit tariffs on 60 economies over “forced labour” enforcement, with rates of 10% for some partners and 12.5% for others, including Singapore. Middle East Trade Shock: US lawmakers pressed Rubio on Iran’s economic and commercial fallout and urged release of Gavi funding. New Zealand Disaster Levy Debate: NZ’s finance minister said a separate “Community Protection Levy” may be debated, but stressed fiscal constraints and infrastructure spending. Armenia-Iran Trade: Armenia and Iran highlighted cooperation in energy, logistics, and trade-economic sectors. Malawi Farm-Led Recovery: Malawi unveiled a shift from subsidies to mega farms, irrigation, and agro-processing to revive growth and exports.

Trade Policy Shock: The US proposes new tariffs of up to 12.5% on imports from 60 economies over forced-labor concerns, with partners pushing back and businesses warning of added uncertainty. Central Banking Watch: Fed President John Williams said inflation risks from the Middle East war and tariffs look limited and that policy is “in the right place,” as the June meeting looms. Energy & Geopolitics: Ukrainian drones hit Russia’s St. Petersburg oil terminal as the SPIEF forum opens, while the IMF says Saudi Arabia’s economy is resilient thanks to rerouted oil via East-West pipeline and Red Sea ports. Macroeconomic Outlook: Canada is expected to rebound after a technical recession, with OECD projecting growth strengthening through 2026-27. Development Spending: Pakistan plans a bigger PSDP for FY26-27 and confirms its federal budget will be tabled June 10. Digital & AI Governance: Virgin Islands officials say AI needs a clear policy framework to manage adoption and impacts. Local Growth & Jobs: Kenya accelerates Lake Victoria corridor road upgrades, and Ghana’s central bank highlights falling inflation and lower rates as it seeks sustained stability.

US Trade Policy: The U.S. is moving ahead with Section 301 forced-labour probes, proposing 10%–12.5% tariffs on imports from 60 economies and putting India under direct scrutiny for enforcement gaps. Tariff Spillovers: USTR Jamieson Greer says more investigation results will land in the coming weeks, keeping markets on edge about broader trade costs. Central Banking Watch: New Zealand’s Reserve Bank outlook is shifting toward earlier, faster rate hikes, while India’s RBI is widely expected to hold rates in June and tighten later in FY27. Growth Signals: Australia’s economy slowed to 0.3% in the March quarter as cyclone disruptions hit exports, even as business investment rose. South Africa Jobs & Power: Ramaphosa says load reduction is ending as tax and debt stabilise, while the Presidency focuses on implementation to drive growth. Youth & Migration: Cabinet approved a 2026–2030 National Youth Policy, and Ramaphosa urged better-managed migration to protect services and jobs. Energy & Courts: New York and six states sued over a canceled offshore wind deal, arguing the government skipped required hearings.

US Labor Market: Job openings jumped the most since 2021, but hiring cooled as Iran-war uncertainty and higher energy costs weigh on demand. AI Governance: Trump signed an order giving the government an early look at powerful AI models (up to 30 days), aiming to prepare for security risks. US Trade Pressure on Brazil: The USTR proposed a 25% tariff under Section 301, with broad but not universal exemptions, after an investigation into digital trade, IP, and deforestation-linked practices. Canada-US Trade: Canada urged the US and Mexico to renew USMCA for 16 more years as Trump again floated the “51st state” idea; talks also focus on tariff and Section 301 fallout. Armenia-EU Economic Link: Armenia’s foreign minister discussed boosting the economic side of the Armenia-EU partnership, including trade turnover and connectivity. Philippines Digital Economy: A regional digital pact (DEFA) is set to expand investment and productivity, with the digital economy already 9.8% of GDP in 2025. Ghana Industrial Reset: Ghana pitched investors on a manufacturing policy reset, faster trade digitalisation, and agro-industrial expansion. UK Tariff Concern: Fairtrade warned the UK’s planned temporary tariff cuts on food could disrupt pay for farmers in cocoa-linked supply chains.

US Foreign Assistance Overhaul: Marco Rubio tells lawmakers the Trump administration is shifting foreign aid toward trade, investment, and partnerships tied to American interests. India–US Trade Talks: Negotiators in New Delhi aim to finalise an interim deal, but Section 301 and possible new US tariffs are the flashpoint. Middle East Trade Logistics: Iran’s Jilat border crossing with Iraq moves toward operations, targeting trade and pilgrim flows. Iraq’s Cash Economy: Exchange offices keep expanding as about 87% of Iraq’s money supply stays outside banks, limiting lending and investment. Egypt Trade Facilitation: Egypt’s finance minister outlines FY26/27 tax, customs, and property facilitation packages to cut burdens and speed clearance. Pakistan Energy Pressure: Traders in Pakistan slam an 8pm market curfew tied to fuel and FX strains. China Digital Trade Secrets: New rules expand trade secret protection to data, algorithms, and AI-related tech. Australia Sanctions Push: Timber industry urges tougher action against Russian timber rerouted via third countries. South Africa Jobs Focus: Labour minister flags a “missing jobs crisis” for youth despite stabilisation. New Zealand Research Funding: Cabinet backs a Tertiary Research Excellence Fund to reward impact and cut compliance costs. India Market Watch: India’s rupee strengthens slightly; stocks slip on US–Iran uncertainty. Regional Industrial Policy: Haryana launches “Make in Haryana” and backs major data-centre investment MoUs.

Minimum Wage Talks in Nigeria: Nigeria’s Governors’ Forum is weighing a new national minimum wage of N100,000 as inflation and living costs squeeze workers, aiming to balance pay gains with state budget capacity. Trade Transition Risk: Bangladesh’s LDC graduation could erode EU EBA-style tariff preferences, with exporters—especially garments—facing higher costs unless a deferral or transition deal holds benefits through 2029. Jordan Export Momentum: Jordan reports Q1 2026 exports up 1.6% to JD 2.129bn, led by garments, potash and pharma, with gains in Syria, China and the EU. India-Myanmar Trade & Security: Modi met Myanmar’s president Min Aung Hlaing, with talks covering border security and expanding trade via the rupee-kyat settlement mechanism. Zambia Rural Connectivity: Zambia is building K230m feeder roads in Rufunsa and Luangwa under a World Bank-backed project to boost access and local economic activity. Zambia Eurobond Buyback: Economists back Zambia’s partial eurobond repurchase as a move to cut future debt costs and improve fiscal space. Ghana Monetary Policy: Ghana’s central bank kept its policy rate at 14%, citing Middle East-driven oil risks that could reignite inflation. Canada Economy Debate: Canada’s GDP contraction fuels political pressure, with opposition calling it a recession and demanding accountability. UK Tech & R&D Push: Liverpool is set to receive £23.7m to scale future industries, with mayors gaining more control over regional innovation funding. FTC Scam Warning: The US FTC highlights rising text-based fraud and urges reporting and deleting suspicious messages.**

Outbound Investment Controls: China’s State Council rolled out sweeping new rules for overseas deals involving Chinese investors, tech, data and national security, with authorization and possible unwinds for completed transactions—effective July 1—raising compliance risk for global firms. Trade Talks: The US and India kick off four-day negotiations in New Delhi to finalize an interim trade pact, aiming to lock in tariff relief and advance market access, customs facilitation and investment promotion. Energy Policy & Inflation: Nepal’s PM said VAT revenue on electricity use will fund power-grid upgrades, while gold prices jumped after customs duty on imports doubled—both underscoring how budget choices feed directly into household costs. Africa Trade Opportunity: China’s zero-tariff access for 53 African countries is expanding exports, but analysts warn that standards, logistics and industrial capacity will decide whether access turns into real transformation. Geopolitics & Markets: Oil rose more than 2% as West Asia tensions escalated, with US-Iran strikes and Israel’s Lebanon offensive feeding supply and risk concerns. Jobs vs Reform Payoff: Nigeria’s business lobby says reforms have stabilized the macro picture, yet many firms still haven’t felt benefits due to inflation, energy costs and FX volatility. Labor Standards: The ILO is moving toward the first global convention for gig-economy workers, setting rules for core rights, pay and safety for platform workers.

Geopolitics & Security: Russia is reportedly ramping up “serious effort” to steal Western technology and defense secrets, using shell companies, spies and hackers to target European infrastructure. Trade & Payments: Russia and Mexico plan talks on SWIFT alternatives to keep dollar-free trade moving, with agriculture and fertiliser supply on the agenda. US–India Commerce: India and the US kick off a four-day New Delhi round to finalise an interim trade pact. Rail & Growth: Serbia has published early steps for a Corridor 10 high-speed double-track upgrade through North Macedonia, aiming to replace slow tunnels and lift speeds. Energy & Inflation Pressure: Ghana’s trade minister urged firms to cut prices as inflation eases, warning against “crisis-era” pricing. Regional Deals: India–Oman CEPA starts June 1 with broad zero-duty access for labour-intensive exports. Public Finance: Nepal’s finance minister says budget execution reforms and earlier spending start dates are meant to fix long-standing implementation gaps. Nigeria Economy: CPPE says Tinubu’s first three years stabilised the macro picture, but welfare gains and jobs are still lagging.

ASEAN Digital Deal: ASEAN has wrapped talks on the ASEAN Digital Economy Framework Agreement, with signing set for November and a goal to lift the bloc’s digital economy from a projected $1T by 2030 to as much as $2T. EU Trade Diplomacy: China and the EU are discussing a trade-and-investment consultation mechanism, with Beijing warning it will retaliate if Brussels pushes discriminatory trade tools. India-Myanmar Connectivity: Jaishankar met Myanmar’s president ahead of Modi’s talks, focusing on connectivity, trade, and border security as defense cooperation and economic ties move up the agenda. Trade & Logistics in Malaysia: Malaysia launched the Tuanku Syed Sirajuddin Free Trade Zone and Perlis Inland Port, pitching it as a land gateway to help Malaysia-Thailand hit a $30B trade target. South Africa Small Business: Government progress continues on the R500M Spaza Shop Support Fund, aimed at formalising and tightening compliance in the spaza sector. Energy/Industry Push (India): India’s coal ministry roadshow backed incentives for surface coal gasification, targeting major investment and reduced import dependence for key chemicals. US Gas Shock: US gas prices topped $4.50 a gallon, pushing consumers to cut discretionary spending as policymakers struggle to cool prices. EU Sanctions Pressure (Ireland): Ireland’s alumina plant data reportedly shows heavy exports to Russia, complicating Dublin’s case against EU sanctions. Pakistan Women’s Rights: A report flags weak enforcement of women’s economic rights in Pakistan, with low enforcement perceptions and low labor participation.

Canada–China Reset: Foreign Minister Wang Yi met PM Mark Carney and Anita Anand in Ottawa for the first China diplomacy visit in a decade, agreeing on annual talks and new cooperation in agriculture, clean tech and energy. US–Mexico Trade Talks: The first round of USMCA review talks wrapped with focus on rules of origin, autos, steel and aluminum, plus “economic security” and regulatory alignment. EU–China Trade Tensions: China warned it will take “necessary measures” after the EU signaled tougher protection for industry against Chinese competition. Middle East Energy Shock: IMF/World Bank/IEA/WTO warned Hormuz disruptions are draining oil inventories fast, raising fuel and food risks for vulnerable economies. Brazil vs US Terror Designations: Brazil condemned the US move to label PCC and CV as foreign terrorist groups, calling it interference that could hit sovereignty and economic cooperation. Nepal Budget Push: Nepal’s 2026/27 plan targets “wellness tourism” and civil aviation reforms, including splitting the aviation authority by mid-January 2027 to help get off the EU air-safety list. Nepal Tax Changes: Economic Bill 2083 raised excise duties on items from liquor and tobacco to junk food, snacks and cocoa products. UK Youth Work Path: Labour urged unemployed 16–24-year-olds to consider the armed forces as NEET numbers topped one million, alongside 300,000 new work placements. Nigeria Security & Jobs Narrative: Defence Minister Musa said terrorism has been “drastically curtailed,” while Tinubu claimed states no longer rely on federal help for salaries. AI Governance Warning: South Africa’s withdrawn AI policy is being cited as a cautionary tale for firms adopting tech without strong governance. Local Growth Play: West Midlands unveiled 25 recommendations to revive the night-time economy, including safety steps and night bus support.

Macro Growth: Brazil’s GDP rose 1.1% in Q1 2026 (1.8% year-on-year), led by agriculture (+2%), industry (+1%) and services (+0.5%), while exports fell (-1.7%) and imports climbed (+4.4%). Trade & Sanctions: The EU is preparing a tougher China trade stance, with plans to expand safeguards and push more supplier diversification in critical sectors. Regional Bloc Pressure: Russia-led EAEU says it will review Armenia’s membership later this year, urging a referendum on EU accession and warning of “economic security” risks. Canada–China: China’s FM Wang Yi told Canada it could double exports to China by building on recent tariff cuts, as ties deepen after a decade-long gap in top-level visits. Policy & Markets: Lesotho’s central bank raised its policy rate 25 bps to 6.75% amid fuel-price and geopolitical risks. Business & Industry: South Korea moves to boost power equipment exports with targeted trade-finance support tied to grid replacement and AI-driven demand. Tech & Finance: Robinhood launched AI “agentic” tools that can execute trades and manage spending, raising new questions on oversight and risk. Development Finance: Botswana and De Beers appointed Akinwumi Adesina to lead the Diamonds for Development Fund to drive diversification and jobs.

Trade Corridors & Supply Chains: The Philippines and Japan pledged to turn the Luzon Economic Corridor into a “world-class” hub, prioritizing rail/port upgrades, clean energy, semiconductors, digital connectivity and agribusiness, with trilateral coordination involving the US. Eurasian Trade Strategy: A new India–Middle East–Europe corridor narrative is gaining traction as a connectivity alternative to China’s Belt and Road, amid European concerns about debt, leverage and opaque financing. Agriculture & Market Access: South Africa’s apple and pear exporters are reshaping value chains to capitalize on China’s zero-tariff policy, shifting toward premium varieties, tighter quality control and brand-oriented packaging. Energy & Sanctions: Cuba says US sanctions are “devastating,” citing financing and supplier pullbacks that are now hitting water and power systems. Fiscal & Subsidy Pressure: Nepal is preparing its 2026/27 budget presentation, while Timor-Leste is moving a supplementary budget to build a strategic fuel reserve amid import vulnerability. Policy Governance: EU governments are pushing for tighter control of Commission spending tied to trade deals, after concerns that development funds were used to smooth major agreements. Labor Market Risk: UK figures show NEET youth could reach 1.25m in five years without action, raising alarm over long-term productivity and social stability.

Trade & Diplomacy: Canada’s PM Mark Carney urged a “true partnership” with the US as USMCA review nears, arguing for strategic autonomy amid “weaponised” integration. Monetary Policy: The Fed’s preferred inflation measure rose to 3.8% in April, keeping pressure on central banks to prioritize getting inflation back to target. Global Outlook: The World Economic Forum says global growth is weakening and inflation risks are rising, with the Middle East and Hormuz disruption driving the deterioration. EU Capital Markets: France, Germany, Italy, the Netherlands, Poland and Spain pushed the Commission to speed up a bloc-wide capital markets union by summer 2026. Banking & Credit: RBC lifted its dividend and grew Q2 profit 25%, but warned of a “period of volatility” tied to North American trade talks and the Middle East. Budget & Labor (Bulgaria): Trade unions demanded consultation on the 2026 state budget, arguing deficits aren’t about wages and pensions but investment plans. Energy/Climate Risk (Germany): A study warns heat waves could cost Germany up to €112.5bn by 2030 via lower productivity and higher energy demand. US-Iran Tensions: New strikes and counterstrikes escalated after Hormuz-related developments, rattling oil prices and supply-chain expectations.

Trade Diplomacy: India and Canada reaffirmed a USD 50 billion trade goal as Piyush Goyal pushed CEPA talks and met business leaders in Toronto. Sanctions Spillovers: A new analysis warns Western sanctions on Russia’s fleet are reshaping global shipping and hitting sanctioning economies via “boomerang effects.” Budget & Social Policy: New Zealand’s Budget 2026 boosts early childhood and trade training but faces backlash over child poverty targets and nature/climate spending. Education & Skills: The Budget doubles Trades Academy places and expands curriculum funding, while critics say ECE funding still lags inflation. Financial Regulation: St. Maarten advanced a payment services law to create market access for firms like PayPal and Revolut. Energy Demand Management: Nepal’s energy minister urged faster growth in domestic electricity consumption alongside transmission buildout to avoid future debt risks. Climate Adaptation Planning: Curaçao and Sint Maarten published guidance on National Adaptation Plans to turn climate awareness into coordinated action. Industrial Policy Feedback: India’s Finance Ministry plans factory visits to gather ground-level input for Budget planning amid West Asia-driven cost pressures. Corporate Compliance Tech: EXIO Group partnered with Solidus Labs to expand 24/7 trade surveillance and AML monitoring.