Displaying items by tag: trade

Gold prices surged to an all-time high as investors sought safe-haven assets amid escalating U.S. tariff concerns. Spot gold climbed 1.3% to $2,794.42 per ounce, briefly touching $2,798.24, while U.S. gold futures settled 1.8% higher at $2,845.20. 

Market uncertainty grew following White House plans to impose steep tariffs on Mexico and Canada, with potential levies on China also under consideration. A weaker U.S. dollar and declining Treasury yields further bolstered gold’s appeal to investors. 

Meanwhile, the Federal Reserve maintained interest rates, signaling no urgency for further cuts despite slowing economic growth. Traders now await the upcoming inflation report for insights into future monetary policy.

Finsum: We will see some wild moves in commodities prices in the coming weeks given the retaliation already spiking in the trade wars. 

Donald Trump's proposed tariffs are already unsettling global markets, with steep duties on imports from China, Canada, Mexico, and elsewhere threatening to disrupt trade flows and spark retaliatory measures. 

China, facing tariffs as high as 60%, is grappling with a weakened yuan and struggling stock markets, with analysts forecasting further currency declines to cushion exporters. In Europe, the euro faces pressure from trade uncertainty and weakening Chinese demand, with the potential for parity with the dollar amid economic concerns and tariff impacts.

The European auto sector is particularly vulnerable, with shares swinging sharply on tariff news and broader economic weaknesses prolonging market underperformance. Canada’s currency has also dropped significantly amid threats of tariffs and a turbulent political climate, while Mexico’s peso remains volatile, reflecting ongoing risks tied to U.S. trade policies. 

Finsum: These developments underscore the widespread economic uncertainty and market fragility as Trump’s trade agenda looms.

Scott Bessent, President-elect Donald Trump’s nominee for Treasury Secretary, emphasized the critical importance of maintaining the U.S. dollar as the world’s reserve currency during his testimony to the Senate Finance Committee. 

He advocated for prioritizing productive investments over wasteful spending to stimulate economic growth while addressing vulnerabilities in supply chains and strategically using sanctions for national security. Bessent reiterated support for making Trump’s 2017 tax cuts permanent, warning of a historic $4 trillion tax hike if Congress fails to act. 

He also outlined plans for pro-growth policies, including reducing the corporate tax rate to 15% for U.S.-based manufacturers and exempting tips and Social Security income from taxation. Bessent underscored Trump's aggressive tariff plans to counter perceived unfair trade practices and strengthen domestic industries. 

Finsum: This administration could usher in a transformative era but we’ll see how tariffs and tax cuts off set for economic Growth. 

(Washington)

There have been many stories about how coronavirus could hurt the economy. We have covered the extent to which fears of the virus have hurt various sectors as well as general Chinese factory production. Today we have some concrete stats on how the virus is hurting trade. So far, there have been about 350,000 less shipping containers leaving China than there would have been without the virus. Dockworkers at major ports are sitting idle as nothing arrives. Fears of job losses are mounting because workers have nothing to do. The 350,000 figure includes China to Americas shipments as well as China to Europe shipments.

FINSUM: That is a phenomenal amount of production if you think about it, and that is only a portion of the export market. We think there is a good chance of a Chinese recession that may trickle into the global economy.

(New York)

The global economy has not been in worse shape from a trade perspective n several years. Despite progress in the trade war between China and the US, global trade continued to drop in the past couple of months and was down over 1% from its 2018 level in November. Perhaps most worryingly, the falls were broad-based, with the Eurozone, the US, Latin America, and emerging Asia all seeing falls in trade.

FINSUM: The big question here is whether this is just policy-related or whether there is a real decline in economic momentum that is not yet showing up in other figures. Time will tell.