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Brazil suggests steel quotas and calls for dialogue on trade with the US
Brazil's Vice-President Geraldo Alckmin called on Wednesday for "caution", and said that the South American nation would seek dialogue after President Donald Trump decided to impose 25% tariffs on steel and aluminium imports. Alckmin told reporters in Brasilia that Brazil is open to dialogue, and will reach out to Trump's administration. He suggested that quotas might be an alternative. Alckmin said that the U.S. trades with Brazil in a surplus, which means that the country's biggest economy is "not the issue". Trump, who was sworn in last month to his second term non-consecutive, is the first target. Steel and Aluminum Tariffs will be imposed in 2018 as a result of a national security law from the Cold War. He later exempted several countries, including Canada and Australia, as well as Brazil, South Korea, and Argentina, from duty-free quotas based on pretariff volumes. In the past, quotas would be set when tariffs increased. This is a clever mechanism," said Alckmin who is also the Minister of Development, Industry and Trade for President Luiz inacio Lula da S Silva. Since 2008, the United States has had a surplus in bilateral trade with Brazil. This surplus reached 253 million dollars last year. Brazilian Steelmakers Lobby Group Aco Brasil said on Tuesday that it was surprised at Trump's tariffs, and that the measure would not be beneficial to either country.
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Trudeau: Tariffs on Canadian aluminum and steel will cause job losses in the US
Justin Trudeau, Canada's Prime Minister, said that if the United States imposes a tariff on Canadian imports of steel and aluminum, it will result in some Americans losing their jobs, and U.S. economic growth will be affected. Trudeau reiterated to reporters in Brussels that Canada will respond if necessary with countermeasures. Donald Trump, the president of the United States, has threatened to impose tariffs on Canadian imports as well as steel and aluminum. Trump imposed tariffs on Canadian aluminum and steel in 2018, when he was still president. The United States and Canada were negotiating a new continental trade agreement. Trudeau claimed that the measures had cost 75,000 U.S. workers their jobs. He said: "We're highlighting that significant job losses occurred in the United States when they introduced tariffs the last time... this will actually compromise the growth and prosperity of the United States." Trump claims that the measures will help struggling industries in the United States. Canada is the largest source of aluminum imports in the U.S. Imports to Canada from 2024 reached 3.2 million tonnes last year. This is twice as much as the combined amount of the other nine countries. Quebec is the main source of Canadian aluminum. On Wednesday, Premier Francois Legault said that Canada should consider export tariffs for products such as aluminum "where there is a real need". Dominic LeBlanc said that Canada will not act until they see what the U.S. administration does. He told reporters that "what the Americans have said privately to us and what they've said publicly is we have a few weeks to work together." (Reporting and editing by David Ljunggren, Promit Mukherjee, and Peter Graff).
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Italgas aims to close the 2i Rete Gas contract by April 1.
Italgas, Europe's largest gas distributor, aims to complete the acquisition of 2i Rete Gas before the end of the month or at the start of April. This was stated by its CEO Paolo Gallo on Wednesday. The group would then plan a capital increase of 1 billion euros to help finance the deal. Gallo stated at a conference call following the results that the capital increase would take place "before the summer and in any event before the end the second quarter" if the market conditions allowed it. The Italian group has agreed to purchase 2i Rete gas in an 5.3 billion-euro deal, which will be a significant step in consolidating the country's distribution sector. The Italian antitrust authority has not yet specified what remedies it may require to approve the merger. Italgas reported on Wednesday a 14% increase in 2024 core earnings adjusted and raised its dividend per share to 0.406 euros. The adjusted earnings before interest taxes, depreciation, and amortization (EBITDA), which includes the revenue from gas distribution and the contribution of the water business, rose to 1,35 billion euros. This was due to a rise in the water sector and a positive contribution by the energy efficiency division. Gallo stated that the group would publish its financial guidance this year at the time it released first-quarter results. (1 dollar = 0.9633 euro) (Reporting and editing by Alvise Armillini and Keith Weir, with Francesca Landini)
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Dominion Energy continues to grow its data centers
Dominion Energy increased its five-year plan for capital expenditures on Wednesday, as the electricity demand in Virginia continues to increase. Richmond, Virginia-based utility anticipates spending $50.1 billion between 2025 and 2029, an increase from its previous estimate $43.2 billion. Robert Blue, Dominion's Chief Executive Officer, said in a conference call that the growth of data centers in Virginia was not slowing. "In fact, it's accelerating. We are taking all the necessary steps to take advantage of this opportunity. According to the U.S. Energy Information Administration, U.S. electricity demand will reach record levels in 2025 and2026, due to a growing demand for power from data centers dedicated artificial intelligence, cryptocurrency and homes and businesses to heat and transport. Dominion reported that data centers increased their power capacity by 88%, or 19 gigawatts(GW) in December compared to July. It has narrowed the range of its operating earnings forecast for 2025 from $3.25 to 3.54 per share to between $3.28 to $3.52. The utility's shares were unchanged in the morning trading session at $55.50. Dominion has connected 15 data centers last year with a combined capacity of almost 1,000 megawatts. The utility plans to connect 15 more data centers in 2018. Dominion, in northern Virginia, serves the largest cluster of data centres in the world, a market that is larger than the four next largest international markets put together. Dominion’s fourth-quarter profit, which was 58 cents per share or $504 million in total, was up from $260 million or 29 cents per share a year ago. Dominion Energy Virginia was responsible for approximately 80% of this quarter's profits. The company has stated that it will continue to grow its operating profit per share by 5%-7% over the next decade. (Reporting from Tim McLaughlin, Boston; Seher Dareen, Bengaluru. Editing by Leroy Leo & Richard Chang.
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US regulator restores leverage for companies to bypass shareholder votes
The top U.S. Securities regulator revised its guidance on Wednesday, giving companies more power to bypass shareholder resolutions presented for annual meetings. This reverses a 2021 change and is seen as a major blow to activists who are pressing companies to address environmental, social, or governance issues. In recent years, such resolutions have been the focal point of many corporate gatherings as investors became more interested in issues like climate change and workforce diversity. Stock issuers, as well as some Republican politicians, have criticized the trend. They see it a distraction. Mark Uyeda is one of the critics. He was appointed acting chair by President Trump last month at the U.S. Securities and Exchange Commission. According to a legal notice on the SEC's website, it will no longer focus on a broad social impact when deciding whether to allow corporations to bypass voting on shareholder resolutions. New guidance gives companies more leeway to claim that proposals are micromanaging their operations or skipping votes. Sanford Lewis is an attorney who represents activist shareholders. He said that the new language "gives companies immense latitude to claim a proposal micromanages, if the proposal requests specifics from the company."
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EU prefers dialogue to retaliation against Trump tariffs
Officials said on Wednesday that the European Union hopes to avoid a damaging trade conflict with the U.S. due to impending metals duties by prioritizing negotiations over retaliatory measures. The EU's trade ministers were scheduled to meet via videoconference on Wednesday, to discuss their response to the 25% tariffs that President Donald Trump has imposed on all imports of steel and aluminum starting March 12. Ursula von der Leyen, President of the European Commission, has said that these tariffs are unjustified. She also stated that they will "trigger firm countermeasures". A diplomat from the EU said that it was important to remain "cool-headed" as there is still a month before tariffs are implemented. Maros SEFCIOC, EU trade chief, had his first phone call with U.S. counterparts Howard Lutnick (Commerce Secretary nominee), Jamieson Greer (U.S. Trade Rep nominee), and Kevin Hassett (National Economic Council Director) on Wednesday. "Our preferred option is cooperation." We remain committed to constructive dialog and finding negotiated solution, while protecting EU interests, just as the US does," said an EU spokesperson, adding that the parties have agreed to meet shortly. Carlos Cuerpo told journalists on Wednesday in Poland that a tariff agreement was necessary. He said, "We will continue the dialogue because of that." Robert, the German Economy Minister, was to emphasize on the videoconference the importance of preventing a trade conflict and that the EU show a united face. Habeck's Ministry said: "It is important that the European Commission hold discussions with the U.S. Administration in order to find a solution to the tariffs." "At the time, the Commission must also make it clear that countermeasures have been prepared," the report continued. The Commission hasn't provided any details of its plans. One option is to reactivate tariffs that the EU imposed on products like bourbons, motorcycles and Orange Juice in 2018. They were suspended as part of a truce between von der Leyen, the former U.S. president Joe Biden and others. An industry source in Europe said that they expected the EU would make it clear that it was prepared to retaliate, but to continue negotiations to broker an agreement before any U.S. levy kicks in. Although the European Union does not export as much steel and aluminum as the United States, its exports are significant. In the last decade, the United States has been the second largest export market for EU-made steel. Annual shipments have averaged around 3 billion euros ($3,10 billion). In the first eleven months of 2024, EU aluminium exports totaled 2.4 billion euro. The lobby group European Aluminium called on the European Commission (EC) to immediately engage in talks with U.S. counterparts and seek a solution. Reporting by Philip Blenkinsop in Berlin and Julia Payne in Madrid, Emma Pinedo and Bernadettebaum in Berlin; editing by Bernadettebaum and Toby Chopra
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Exxon wants to build its eighth oil and gas project in Guyana, as production increases
The head of Exxon Mobil in Guyana announced on Wednesday that a consortium led by Exxon Mobil had requested environmental permits for its eighth project - the first to generate gas unrelated to oil production - and to explore a second well at its massive offshore blocks. Exxon is preparing for an active exploration and production year in Guyana, following upgrades to two of its floating facilities. A fourth vessel will arrive in the next few weeks and increase the total capacity of the group's output to 940,000 barrels a day. Guyana has pressed Exxon to deliver and produce more natural gas. This is part of the Government's strategy, which includes relying on natural gas for the generation of electricity, industrializing the country, and starting petrochemicals and liquefied gas businesses to increase revenue. Alistair Routledge said, at a press briefing, that the consortium has recently completed an appraisal of its natural gas resources, which was long overdue. This will allow for a more accurate estimation of the total amount of resources available to be produced. The study may help Exxon integrate its efforts with the massive development that Guyana awarded to Fulcrum LNG. This project is aimed at developing and building Guyana's first LNG plant. Routledge stated that Exxon had not recently spoken to the company. Exxon’s eighth project, Longtail, will add 250,000 barrels of crude oil per day and 1 billion cubic foot per day to natural gas production by 2030. Guyana's economic growth reached its fifth consecutive double-digit year in 2024. The oil industry was the main driver of this 43.6% increase. Oil production increased to 616,000 barrels per day (bpd) on average from 391,000 the year before.
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McEwen Copper asks for major tax breaks on Los Azules Copper mine in Argentina
McEwen Copper is a Canadian subsidiary of McEwen Mining. It has requested to be included in an Argentine incentive program, which would provide significant tax breaks on its Los Azules Copper Project located in San Juan Province. McEwen intends to invest $2.7billion in the mine. The Argentine Government's Large Investment Incentive Regime has allocated $227 million to the project. This money will be used for the feasibility study of the mine, exploration work, and construction preparation. If approved, the company could invest an additional $2.5billion in the site for the construction of the mine and production facility under the incentives mechanisms. McEwen's corporate tax rate will drop from 35% to only 25% once the government approves the Los Azules Project. It will also be exempted from the value-added taxes during construction, as well as from export duties. Robert McEwen is the head of McEwen Mining and said that Argentina has reopened its doors for business. Los Azules said that construction could begin in 2026, pending the approval of RIGI, environmental permits and a feasibility report. This mine, situated 3,500 metres above sea level on the Andean mountains range, is Argentina's premier copper project. The Alumbrera mine closed in 2018 and Argentina hasn't produced copper since. (Reporting and writing by Lucila Sigal, Kylie Madry, Jan Harvey).
As US inflation rises, stocks tumble and the dollar surges
The dollar and U.S. stocks rose after the data showed that consumer inflation increased more than expected in January, supporting Jerome Powell's statement that interest rates are not being cut.
The Bureau of Labor Statistics of the Labor Department reported that its consumer price index increased at an annual rate of 3.3% in January. This was above expectations for a 2.9% increase.
Market watchers and households alike are preparing for an increase in inflation as a result the U.S. President Donald Trump’s tariffs.
After being mostly stable all day, futures on the S&P 500 index and Nasdaq fell sharply by almost 1%.
The dollar rose sharply against several currencies due to a rise in U.S. Treasury Yields.
Market participants believe that the Fed will only reduce rates one more time this year. Only 26 basis points are priced in for December, down 35 bps from before the data.
"Tariffs place the Fed in a difficult position because they can reduce economic growth, create unemployment but also inflationary. "The Fed may be more inclined to wait and see how things settle rather than make a move until it is certain what tariff policy it will have and for how long," Charles Schwab UK's Richard Flynn, managing director said.
"Hotter prices would probably keep the Fed from reducing rates sooner. This would result in a stronger Dollar."
The U.S. dollar rose by 1.2% against the Japanese yen on the same day, to 154.295. The euro fell by 0.4% to $1.0322, and the pound dropped 0.5% to $1.238.
The yield on the benchmark Treasury 10-year note increased by 10 basis points on the day, to 4.64%.
Gold continued its earlier decline, falling by 1.1% to $2 869 per ounce on the same day. It had hit a record-high just short of $2,900 an ounce earlier in the week.
Investors will be watching Powell's second semi-annual testimony closely after he told Congress on Tuesday that despite the "pretty good" state of the economy, the central bank is not in a hurry to cut interest rates further unless there was a need for inflation or if the job market was weak.
The second act is usually not as popular, but today's CPI could prompt a different tone or raise different questions. The release will be compared to the expectations, said Jim Reid, a strategist at Deutsche Bank.
Trump's advisors are said to have finalised plans to impose tariffs in return for any country that levies a tax on U.S. imported goods.
On Monday, he announced a 25% increase in tariffs for steel and aluminum.
(source: Reuters)