US economy grows at fastest pace in nearly two years in second quarter

The US economy grew at an annualized rate of 3.8% in the second quarter of 2025, surpassing the most recent estimate of 3.3% and marking the strongest reading since the third quarter of 2024.

The revision largely reflected stronger growth in consumer spending, which was also revised upward, from 1.6% to 2.5%.

The mood among consumers remains glum, but Thursday’s spending data, along with other releases from banks, signals they remain willing to maintain their pace of purchasing.

The US economy’s resilience was underscored by other data showing strong demand by businesses for equipment in August and a drop in first-time applications for unemployment benefits last week as companies hire workers.

The data at face value suggested further interest rate cuts from the Federal Reserve were probably unwarranted.

The US economy grew faster than previously estimated in the second quarter amid strong consumer spending and business investment, though momentum appears to have ebbed against the backdrop of lingering uncertainty from trade policy.

The first-quarter GDP drop, the first retreat of the US economy in three years, was mainly caused by a surge in imports — which are subtracted from GDP — as businesses hurried to bring in foreign goods before President Trump could impose sweeping taxes on them.

Reference Sources

1. nbc - The U.S. economy grew more than thought in the second quarter as glum shoppers kept on buying
2. abc - US economy grew 3.8% in 2nd quarter, far exceeding previous estimate
3. whitehouse - Strong Spending, Narrowing Trade Gap Drives Trump Economy’s Explosive Growth
4. abc - US economy expanded at 3.8% pace in significant upgrade of second quarter growth
5. newyorkpost - US economy grows at fastest pace in nearly two years in second quarter

China to Give Up ‘Developing Country’ Status at WTO

(Source: AP)

China has announced that it will no longer seek the special treatment afforded to developing countries under World Trade Organization (WTO) agreements, a shift long demanded by the United States. Officials from China’s Commerce Ministry said Wednesday that the move aims to strengthen the global trading system, which they said is under pressure from tariff wars and protectionist policies by individual countries.

They did not directly reference the United States or President Donald Trump’s recent tariffs, which have targeted numerous countries, including China.

The United States has long argued that China should relinquish its developing-country status because it is the world’s second-largest economy.

The change highlights China's commitment to supporting the multilateral trading system with concrete measures, China's chief International negotiator, Li Chenggang, said in Beijing.

The so-called special and differential treatment of the WTO benefits developing countries, allowing them, for example, to impose higher tariffs or granting them more time to implement agreements.

WTO director-general Ngozi Okonjo-Iweala described the move as a pivotal moment for the Organisation and global trade.

Reference Sources

1. jakartaglobe - China to Give Up ‘Developing Country’ Status at WTO
2. thestarmy - China gives up preferential WTO trade treatment
3. ft - China to drop claim to WTO developing economy benefits
4. thesunmy - China to forego special WTO treatment in future trade negotiations
5. thestarmy - China to forego Special and Differential Treatment in future WTO negotiations

Trump administration carries out its end of EU trade deal

(Source: Getty Images)

The Trump administration is formally implementing its trade agreement with the European Union, imposing 15% duties on autos and auto parts and granting tariff exemptions to some aircraft, pharmaceuticals, and chemical products, as well as natural resources.

The updated tariff rates on autos will be applied retroactively from Aug. 1, while lower tariffs on aircraft and other products, including “unavailable natural resources” such as cork and certain metals, will be applied as of Sept. 1.

The new auto tariff rate depended on the EU presenting legislation to lower tariffs on U.S. industrial goods and certain other products.

The bloc made good on its end of that plan Aug. 28, clearing the way for the Trump administration to adjust the tariff rate.

European automakers will save around €500-€600 million ($585-700 million) a month dating back to Aug. 1 after the Trump administration implemented the US end of its trade deal with the European Union, the EU’s top trade negotiator said Thursday. Trade Commissioner Maros Sefcovic said that the deal establishing a 15% tariff on most EU goods took effect with publication in the US Federal Register, instructing customs officials what to charge. That would reduce the tariff from a painfully high 27.5% rate set earlier by Trump.

Reference Sources

1. politico - Trump administration carries out its end of EU trade deal
2. usnews - EU Official: Automakers to Save 500-600 Million Euros as Trade Deal With US Takes Effect
3. thestarmy - US implements EU trade deal, 15% autos tariffs retroactive to Aug 1
4. apnews - EU official: Automakers to save 500-600 million euros as trade deal with US takes effect

The CommonWealth English daily news digest is a service curated by CommonWealth English team with the help of AI tools.  

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