Political Overview 03.05.25

Weekly Political Compass – Bespoke Business Development Political Risk Advisory
This Week’s Focus
In this edition, we examine India’s trade policy, while China is set to announce its annual GDP growth target, EU leaders will deliberate on military rearmament, and the U.S. tariff suspension on Mexican goods is set to expire.
Global Snapshot
India’s Trade Policy
What’s the status of India-EU trade negotiations?
On 28 February, Prime Minister Narendra Modi met with European Commission President Ursula von der Leyen, and both parties reaffirmed their commitment to finalizing a long-pending free trade agreement by year’s end. This deal aims to enhance cooperation in trade, technology, connectivity, and defense.
How is India responding to U.S. tariff threats?
Indian Trade Minister Piyush Goyal traveled to Washington on 3 March in an effort to mitigate potential U.S. reciprocal tariffs, which India had hoped would be delayed until trade negotiations conclude later this year. His visit is expected to last until 8 March, with additional trade concessions from India anticipated. If imposed, U.S. tariffs could initially impact Indian exports in chemicals, metal products, and jewelry, with automobiles, pharmaceuticals, and food products following. The steepest tariff impact would be on agricultural exports, such as shrimp and dairy, due to tariff differentials approaching 40%.
Key Developments to Watch
Asia-Pacific
China
On 5 March, Premier Li Qiang will set China’s GDP growth target for 2025, likely at around 5%, while the finance ministry is expected to announce a fiscal deficit target near 4% of GDP. His government work report may also signal potential economic stimulus measures in response to U.S. tariffs.
Thailand
The opposition People’s Party (formerly the Move Forward Party) has filed a no-confidence motion against Prime Minister Yingluck Shinawatra, with the debate scheduled for 24 March. Despite the ruling coalition controlling 322 of 500 parliamentary seats—making the motion unlikely to pass—the opposition aims to erode public confidence in the government. A recent survey indicates that nearly two-thirds of Thais doubt the government’s ability to boost economic growth, with 55% expressing dissatisfaction with the ruling coalition.
Europe
European Union
Following the London summit on Ukraine, European Commission President Ursula von der Leyen will outline a strategy to “rearm Europe” on 5 March. The European Council meeting on 6 March will reveal political backing for this initiative, focusing on expanding the European military equipment market and funding defense procurement. Discussions on frozen Russian assets will also be a key point of interest.
Greece
The government is expected to survive a no-confidence motion initiated by PASOK later this week. However, a heated parliamentary debate is anticipated. Widespread protests on 28 February highlighted public anger over the Tempe train crash and its aftermath, with a critical rail safety report further weakening the government’s position. This marks a significant political test for Prime Minister Mitsotakis.
Turkey
The Turkish Central Bank (TCMB) is likely to cut the policy rate by 250 basis points on 6 March, following a lower-than-expected February inflation reading. While official CPI figures fell to 39.05% year-on-year, independent economists from the ENAG group estimate inflation at 79.5%. Public skepticism toward official inflation data remains high, as many consumers believe real price increases are far greater than reported figures.
Latin America
Mexico
The suspension of U.S. tariffs on Mexican goods ends on 4 March. Last week, former U.S. President Donald Trump hinted at a possible extension but later retracted his statement. U.S. officials have since sent conflicting messages about the tariff implementation. Commerce Secretary Howard Lutnick confirmed tariffs would proceed as planned but suggested they may be adjusted in scale or phased in gradually. Treasury Secretary Scott Bessent also claimed Mexico has offered to align its tariffs with U.S. levies on Chinese imports, though Mexican officials have not confirmed this. President Claudia Sheinbaum has stated she may negotiate directly with Trump before the deadline, raising the possibility of a last-minute agreement. Meanwhile, U.S. officials acknowledge Mexico’s recent concessions, including the expedited extradition of 29 high-profile criminals to the U.S.
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect those of Bespoke Business Development. They are intended to encourage discussion and reflection, rather than serve as legal, financial, accounting, tax, or professional advice.