DailyBrief: May 8
Trump tariffs struck down, Mexico rate cut, AI adoption surges
Markets & Economics
Federal Court Invalidates Trump's 10% Global Tariffs for Second Time
A three-judge panel at the U.S. Court of International Trade ruled 2-1 on Thursday that President Trump's 10% across-the-board global tariff, imposed under Section 122 of the Trade Act of 1974, is "invalid and unauthorized by law." The court found that the administration improperly invoked the balance-of-payments provision, which requires demonstrable large and serious deficits, a bar the court said the White House did not meet. Trump had turned to Section 122 the same day the Supreme Court struck down his IEEPA tariffs in February. The administration is expected to appeal, but the ruling introduces significant new uncertainty over the administration's trade policy architecture heading into summer. Source: Axios
Banxico Cuts Rates 25 bps as Mexico's Economy Contracts
Mexico's central bank lowered its benchmark interest rate 25 basis points to 6.50% on Thursday, its latest easing move as the economy shows increasing signs of stress. Mexico's GDP contracted 0.8% in the first quarter of 2026, retail sales growth decelerated sharply from 5.0% to 3.1%, and gross fixed investment fell 4.2% year-on-year. The cut signals that policymakers are prioritizing growth support over inflation caution, even as trade uncertainty from U.S. tariffs continues to weigh on the export-dependent economy. Source: KAOHOON International
German Factory Orders Surge 5.0% in March, Strongest in Years
German factory orders jumped 5.0% month-on-month in March, the largest single-month gain in years, beating analyst expectations by a wide margin. The surge reflects a combination of accelerating defense procurement under Germany's expanded military spending program, front-loaded industrial demand ahead of anticipated supply-chain disruptions, and improved export competitiveness driven by the weaker euro. The data provided a rare bright spot for the eurozone's largest economy, which has struggled with stagnant growth and a contracting construction sector, with the eurozone construction PMI falling to 41.7 in April. Source: Rio Times
UK Exports to US Remain 25% Below Pre-Tariff Levels, Trade Balance Turns to Deficit
Official data from the U.K. Office for National Statistics shows that British goods exports to the United States have remained roughly 25% below pre-tariff levels through February 2026, with no meaningful recovery since Trump's tariffs took effect. The damage is most acute in cars (down nearly 40%), clothing (down more than 25%), and luxury goods. The cumulative impact has turned Britain's goods trade balance with its largest trading partner into a deficit for three consecutive months. UK exporters face a triple squeeze of tariff costs, rising domestic employment taxes, and input price pressures that are compressing margins and eroding competitiveness. Source: CNBC
Tech & AI
Microsoft Report: Global AI Adoption Climbs to 17.8% of Working-Age Population
Microsoft's AI Economy Institute released its Q1 2026 Global AI Diffusion report on Thursday, showing that AI usage among the world's working-age population rose to 17.8%, up 1.5 percentage points from the prior quarter. The UAE leads all nations at 70.1% adoption, while the United States climbed from 24th to 21st globally with a 31.3% usage rate. Twenty-six economies now report AI usage exceeding 30% of their working-age populations. The report highlights accelerating adoption in Asia, particularly South Korea, Thailand, and Japan, driven in part by improving AI capabilities in regional languages. Despite the gains, the report warns that the adoption gap between high-income and developing economies continues to widen. Source: Microsoft
Q1 2026 Shatters Global Venture Funding Record at $300B as AI Dominates
Global startup venture funding hit $300 billion in the first quarter of 2026, shattering previous records and marking the largest single quarter for startup investment ever recorded, according to Crunchbase. Artificial intelligence dominated the quarter, with large-scale infrastructure rounds, sovereign AI deals, and enterprise automation bets driving the majority of capital deployed. Notable deals included Prior Labs securing a $1.16 billion investment from SAP and Moonshot AI raising $2 billion to scale open-source model development. The record funding comes despite elevated interest rates and ongoing trade policy uncertainty, reflecting investors' conviction that AI infrastructure build-out remains the dominant investment theme of the current cycle. Source: Crunchbase