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Morning bid Europe-It seems investors don't really like tariffs
Wayne Cole gives us a look at what the future holds for European and global markets. Investors are not happy with a trade war fueled by tariffs and a likely recession. Who knew? Wall St Futures and the Nikkei are both down about 3%. European stock futures have fallen around 1.7%. The Treasury yields have hit multi-month-lows while the dollar index has hit a six-month-low in chaotic conditions. The reaction matched the drama surrounding the announcement as President Donald Trump announced various taxes on live television from a large blue and yellow board. The list included 34% more for China, 20% for the EU, 32% Taiwan, 24% Japan, and 46% Vietnam. Included high levies on Asia were a clear shock for tech stocks, as it will increase costs across their supply chain. Apple shares fell 7% following the bell. Contrary to the arguments of the White House most analysts see the end of the free trade agreement as a shock for U.S. economic growth, and the likelihood of recession will increase. Fed funds futures rose in price to reflect 80 basis points in Fed easing in this year. This is true even though tariffs are sure to cause a sharp spike in U.S. inflation. Analysts have predicted price increases of up to $10,000 for new cars alone. Fed officials often say that they are willing to overlook a single increase in price, but this pandemic illustrates what happens when companies realize they can raise prices and then blame someone else. The White House has said it is open to horse-trading with other countries. The shifting sands will make it difficult for companies to plan investments over the long term. Then there are the countermeasures that will be taken as countries prepare to oppose Trump's world order. Ursula von der Leyen, President of the European Commission, was on the phone just moments ago to promise retaliation if negotiations failed. Students of history know that the Smoot Hawley Tariffs, implemented by the United States in the early 1930s, are what put the "great " in "the Great Depression". Are you trying to stay up-to-date with the latest news on tariffs? Our daily news digest provides a quick overview of the most important headlines that impact global trade. Tariff Watch is available here. The following are key developments that may influence the markets on Thursday. - EU Producer Prices, Service PMIs US trade data ISM services and weekly jobless claims. Fed Vice Chair Jefferson, and Governor Cook talk
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London copper prices drop as Trump tariffs cause demand concerns
The price of copper in London fell on Thursday as the U.S. President Donald Trump's sweeping tariffs sparked concern about global metal demand. As of 0331 GMT, the benchmark three-month contract on the London Metal Exchange was down by 1.4% to $9,562 per kilogram. The contract had hit $9,507 earlier in the day. This was its lowest level since March 11. Trump announced on Wednesday that a 10% minimum tariff would be applied to most imported goods into the United States. Tariffs on products from more than a dozen countries are significantly higher, triggering a trade war around the world that could increase inflation in the U.S. as well as globally and impede economic growth. China demanded that the United States immediately rescind their most recent tariffs. It also promised retaliatory measures to protect its own interests in response to Trump’s tariffs against all U.S. global trading partners. The reciprocal tariffs sent shockwaves throughout today's stock and futures markets. The people are on edge as they anticipate what retaliatory duties other countries may levy. The specter of a escalating war on trade is the dominant force in the market," said a metals trader. Other metals include LME aluminium, which fell 1.2%, to $2460 per ton. Lead also dropped 0.7%, to $1955, while zinc fell 1.2%, to $2746, tin declined 3.0%, to $36,800, and nickel decreased 0.9%, to $15,825 per ton. Lead fell by 1.1%, to 17,155 Yuan. Nickel fell by 1.5%, to 127.380 Yuan. Tin fell 1.7%, to 288,640 Yuan.
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NYK, Partners to Develop Renewable Energy-Powered Floating Data Center
NYK Line, NTT FACIITIES, Eurus Energy Holdings Corporation, MUFG Bank, and the city of Yokohama have signed a memorandum of understanding (MoU) for a demonstration project of an offshore green data center, utilizing a mini-float installed as a disaster countermeasure.On a mini-float, spanning 25 meters in length and 80 meters in width, installed off Osanbashi Pier in Yokohama City, the partners will test an offshore floating data center fully powered by renewable energy generated by solar power and battery energy storage systems.Based on the results, the partners will explore further developments in the waterfront and sea areas of Yokohama port.The demonstration project will involve installing a container-type data center, solar power generation equipment, and battery energy storage systems on a mini-float.The project aims to operate the data center entirely on renewable energy while assessing the equipment's salt damage resistance and operational stability in an offshore environment. The demonstration is planned to start in autumn 2025.“We expect the offshore floating green data center, which operates on 100% renewable energy, will become one of the new standards for future data centers and greatly contribute to the realization of a carbon-neutral society by operatiImage of Demonstration Project (Credit: NYK Line)ng entirely on renewable energy and emitting no greenhouse gases during operation. Through the demonstration, we will work to address various challenges to achieve this vision,” the partners said.Once realized, offshore floating green data centers will enable efficient utilization of offshore wind power, a promising renewable energy source.The project envisions situating these data centers near offshore wind farms to maximize the use of generated electricity without relying on or being limited by onshore power grids.Additionally, the approach is expected to address various challenges associated with onshore data center construction, such as land availability, shortages of construction contractors, and extended construction lead times.By utilizing renewable energy, leveraging Japan's vast maritime domain, and enhancing port functions necessary for constructing and maintaining offshore facilities, the project aims to contribute to both environmental preservation and the growth of digital infrastructure.
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Tornadoes and heavy rains hit central, southern US
On Wednesday, tornadoes tore across the central and south of the United States, destroying houses and businesses as well as power lines and trees. By late Wednesday, the National Weather Service reported that at least 15 tornadoes had been reported in at least four different states. No immediate reports have been made of deaths due to the storm that also brought torrential rainfall and hail. The NWS warned that flash floods, tornadoes, and other dangers will continue until early Thursday. The NWS has forecast violent storms to continue ravaging the country for several more days. Wednesday is just the beginning of "a multi-day catastrophe and possibly historic heavy rain event." Scott Kleebauer is a NWS Meteorologist. This is a wide area of storms moving slowly eastward, stretching from Southeast Michigan to southeastern Arkansas. A tornado hit the town of Nevada in Missouri. The state's Emergency Management Agency wrote on social media that it caused "major damages to several businesses. Power poles were broken and several (empty train cars) were flipped over by the powerful tornado!" The NWS issued flash flood and tornado warnings in Missouri, Arkansas Tennessee, Mississippi, Indiana Illinois Kentucky and Oklahoma. The rain threat for Arkansas, Missouri Tennessee and Mississippi is being called a "generational flooding event". Some locations are forecast to receive as much as 15" (38.1 cm), which could cause rivers burst and cause "catastrophic floods." PowerOutage.us reports that more than 350,000 customers in the storm-hit region have lost power.
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Iron ore prices fall due to US tariffs but steel demand remains resilient.
Iron ore futures fell slightly on Thursday, after U.S. president Donald Trump announced a wide range of reciprocal tariffs. However, seasonal demand for this steelmaking ingredient cushioned the fall. As of 0240 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange was down 0.2% to 789.5 Yuan ($108.12). The benchmark iron ore for May on the Singapore Exchange fell by 0.79% to $102 per ton. Broker Galaxy Futures stated in a report that U.S. Tariffs were more aggressive than anticipated and will have a negative impact on the ferrous market. Trump announced a minimum 10% tariff on goods imported into the United States on Wednesday, and much higher duties for products from dozens countries. This is a worsening of a trade conflict that could drive inflation up and slow down U.S. economic growth. The new tariff will total 54% on Chinese imports. Beijing demanded on Thursday that the United States immediately remove its latest tariffs, and promised countermeasures in order to protect its own interests. Steelmakers increased production during the construction peak season of March and April to cushion the price fall. Analysts at ANZ said that spot buying in China was booming as the construction industry picked up. They added that steel manufacturers were more confident about downstream demand. The recovery in steel consumption will encourage steelmakers in China to increase their hot metal production, according to a report by Mysteel. Coking coal and coke, which are both steelmaking ingredients, were down by 0.6% and 0.31% respectively. The Shanghai Futures Exchange saw a loss in most steel benchmarks. The price of rebar fell by 0.03%; hot-rolled coils dropped by 0.33%; stainless steel declined 1% while wire rod rose 0.24%.
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What will the impact of Trump's reciprocal duties on Indian exports be?
The United States imposed a reciprocal tariff on India on Wednesday as President Donald Trump increased trade barriers for all goods entering America. Here are some key points to consider: INDIA TARIFF RATE & COMMENTS Trump announced reciprocal tariffs ranging from 10% to 49% for other countries. In a press release, the White House stated that while India charges a 70% tariff on imports of passenger vehicles, the United States only charges 2.5%. Apples from the United States are duty-free in the U.S. but India charges 50% on U.S. imported apples. Rice is taxed at 2.7% in U.S. and 80% in India. The statement said that the United States charges a zero percent tariff on networking switches and routers. India, however, imposes rates of 10-20% higher. The U.S. trade deficit with India is $46 billion. Which sectors may be hit the most? The U.S. tariffs will affect a total of nearly $14 billion in electronics and more than $9 billion in gems and jewelry. The 26% tariff does not apply to aluminium and auto parts, but they will still be subject to the 25% tariff announced by Trump earlier. According to the White House, energy products and pharmaceuticals, which together account for nearly $9 billion in exports from India, according to government data, are exempted under the new tariffs. According to the Global Trade Research Initiative, Washington's average sectoral tariffs against India in the past were 1.05% for automobiles, 2.12% for gems and jewelry, 1.06 % for chemicals and pharmaceuticals, and 0.41 % on electronic products. What are the tariffs that other Asian countries face? The U.S. imposed a reciprocal tax of 34% on China. Japan's exports will be subject to a 24% rate, Thailand will pay 36%, Bangladesh will pay 37%, Malaysia will pay 24%, Taiwan will charge 32%, South Korea will collect 25%, and Vietnam, 46%. Comment on Non-Tariff Barriers According to the White House, India has its own unique and duplicative testing requirements and certification standards in areas such as telecom products, medical devices, chemicals and other products. This makes it difficult for American companies selling their products in India. It said that if these barriers were removed the U.S. would see an increase in exports of at least $5 billion per year. INDIA – THE WAY Ahead The two countries agreed during Prime Minister Narendra Modi’s U.S. trip in February to begin talks toward a quick trade agreement and resolve their tariff standoff. India has been reported to be open to reducing tariffs for more than $23 billion of U.S. products sold to India. According to an Indian government internal report, India could gain market share by exporting textiles, footwear and apparel to the U.S. The report states that India is interested in increasing exports of iron-and-steel products, as it has the manufacturing expertise, "especially if China's tariffs are higher." Reporting by Shivangi Acharya, Aftab Ahmed and Raju Gopalakrishnan; editing by Raju Gopi Krishnakrishnan
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London copper prices drop as Trump tariffs cause demand concerns
The price of copper in London fell by more than 1.5% Thursday as the U.S. President Donald Trump's sweeping tariffs sparked concern about global metal demand. As of 0131 GMT, the benchmark three-month contract on the London Metal Exchange was down 1.6% to $9,547 a metric tonne. The contract had hit $9,507 earlier in the day. It was its lowest level since March 11. Trump announced on Wednesday that a 10% minimum tariff would be applied to most imported goods into the United States. Tariffs on dozens of products could lead to a global trade conflict that would increase inflation in the U.S., and possibly hinder economic growth globally. The reciprocal tariffs sent shockwaves throughout today's stock and futures markets. The people are on edge as they anticipate what retaliatory duties other countries may levy. The specter of a escalating war on trade is the dominant force in the market," said a metals trader. Other metals include LME aluminium, which fell 1.4% to $2.456 per ton. Lead dropped 0.5% to $1.959, Zinc dropped 1.1% to 2.750, Tin was down by 2.4% to $37.030, and Nickel was down by 0.7% to $15.850 per ton. Lead fell 0.6%, and SHFE copper dropped 1.1%, to 78.970 yuan per ton. Nickel fell 1.1%, to 127.890 yuan. Tin fell 0.6%, to 291,940.
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Trump's auto duties will cover over $460 billion in US vehicle and parts imports
According to an analysis of tariff codes in a Federal Register notice published on Wednesday, the 25% auto tariffs imposed by U.S. president Donald Trump will cover imports of auto parts and vehicles worth more than $460 billion annually. Last week, Trump updated his auto tariff announcement to include nearly 150 categories of auto parts that will be subjected to tariffs beginning on May 3. This is a month after the midnight activation on Thursday of 25% tariffs for vehicle imports. List includes codes for major components such as engines, transmissions and lithium-ion battery, but also less expensive ones like tires, shocks absorbers, wires for spark plugs and brake hoses. The list includes also automotive computers that are covered by the four-digit code, which includes all computer products including desktop and laptop computers as well as disk drives. According to U.S. Census Bureau figures, imports in this category will reach $138.5 billion by 2024. The total U.S. imports of vehicles and parts excluding this category were $459,6 billion. It was not immediately apparent the value of automotive computer, which is an essential component of modern cars and trucks, including electric vehicles, because there isn't a separate tariff code for them. The list of parts, as well as the timing for tariffs to be applied on May 3, was revealed just before Trump announced that all U.S. imported goods would face a 10% tariff, while many other countries were hit with reciprocal duties higher than this, meant to counter non-tariff barriers. Senior Trump Administration officials confirmed that autos and auto components subject to Section 232 National Security Tariffs will not be charged separate baseline or reciprocal duties. The auto tariffs are not stacked on top of the new, April 5th, reciprocal tariffs. The White House has directed the Commerce Department that domestic producers can request to have other parts imported targeted within 90 days. Importers of vehicles that qualify under the U.S. Mexico Canada Agreement's rules for origin can only pay 25% duty on the non-U.S. portion of their order.
As China-Philippines spat gets worse, United States steps up support: Peter Apps
As a joint U.S.Philippines workout drew to a close last month, U.S. troops at Basco airport in the northern island province of Batanese were screening a cuttingedge highaltitude drone to perform reconnaissance and transfer information to the Filipino military.
Exercise Balikatan, the main yearly U.S.-Philippines joint military drill has been held 39 times given that 1991. This year's. version-- from April 22 to May 10-- included more than 16,000. personnel from the U.S., Philippines, Australia and France.
Generally held in the centre of the Philippines, this. year's workout also took in small northern islands in the Luzon. Strait-- consisting of Batanese province, the location of the. Philippines closest to Taiwan some 120 miles (200 km) away.
Offering the U.S. military access to those remote locations. would be critical to any dispute over Taiwan, which U.S. authorities say Chinese President Xi Jinping has actually purchased his. military to be prepared for by 2027, triggering a host of U.S. and. allied military preparation across the Asia Pacific region.
The very first months of this year have actually also seen an ongoing. escalation in stress in between the Philippines and Beijing.
China's coast guard has actually utilized increasing levels of non-lethal. force-- consisting of water cannon and collisions-- versus Filipino. fishing boats along with ships reinforcing a Filipino armed force. detachment on the landing craft Sierra Madre that is purposely. grounded on the contested 2nd Thomas Shoal.
On June 4, Philippines officials stated Militaries on the landing. craft drew their weapons as a precautionary procedure in. self-defence as rigid inflatables of the Chinese coast guard. approached the Sierra Madre and took packages of supplies. that had just been visited Filipino forces by air to. strengthen the small garrison.
At the significant yearly Shangri-La national security meeting in. Singapore in late May organised by London's International. Institute for Strategic Studies, Philippines President Ferdinand. Bongbong Marcos was asked how Manila might react to the death. of a Filipino sailor in such an incident.
The Philippines and United States have a mutual defence. treaty, and some experts progressively fret that the mounting. face-off over numerous disputed maritime boundaries might yet. activate an unintended war.
The Filipino leader, kid of ousted late dictator Ferdinand. Marcos, knocked what he called the illegal, coercive,. aggressive and misleading actions (by China that) continue to. breach our sovereignty, sovereign rights and jurisdiction.
If a Filipino citizen is eliminated by a wilful act, that is, I. believe, really close to what we define as an act of war, and. therefore we will react appropriately, Marcos informed an audience. that included U.S. Defense Secretary Lloyd Austin and Chinese. counterpart Admiral Dong Jun. And our treaty partners, I. believe, likewise hold that exact same requirement.
Admiral Dong provided his own hawkish speech at Shangri-La,. simply days after a few of the most aggressive Chinese armed force. posturing up until now around Taiwan in manoeuvres U.S. officials said. appeared to be a wedding rehearsal for invasion and blockade.
INCREASING RHETORIC
Dong warned that Taiwan separatists would be nailed to. the pillar of shame in history and that any countries. disrupting reunification of Taiwan with China would face. self-destruction.
He said Beijing had actually worked out restraint in the face of. violations and justifications carried out by a certain. nation he did not name, but plainly indicated to be the. Philippines.
China claims democratically governed Taiwan as its own. territory and has never renounced the use of force to take over. the island. Taiwan highly challenge China's sovereignty. claims, saying just the island's people can decide their future.
The Shangri-La meeting saw the first direct in person. conference between Chinese and U.S. defence chiefs since 2022,. created to assist manage the risk of unintentional conflict. However. neither side seemed backing down.
U.S. authorities said Austin specifically raised the concern of. Chinese provocations in the 75-minute session, while Austin's. public remarks reasserted U.S. commitment to the region.
Let me be clear: the United States can be safe and secure only if. Asia is safe, Austin stated. That's why the United States has. long preserved our existence in the region.
Most experts believe there are 2 ways a conflict might. start in Southeast Asia. The very first would be an unexpected. escalation of an occurrence in the South China Sea such as around. 2nd Thomas Shoal, and the 2nd would be a deliberate. Chinese act - most likely an invasion of Taiwan - that then. triggers a much larger conflict.
Structure up the U.S. and Filipino military presence in the. northern Philippines is considered as essential to preventing such. results, or certainly battling such a conflict if deterrence. fails.
U.S.-Filipino military links decreased after the fall of the. initially Marcos from power in 1986, with U.S. forces kicked out. totally in the 1990s. However they have actually ratcheted up significantly. once again since his kid was chosen president in 2022, driven. by shared understandings of a rapidly increasing risk from China.
The 1988 constitution prohibits the permanent stationing of. foreign forces on Filipino soil. But considering that Marcos' election,. U.S. forces have actually increased what they described as a short-term,. rotational existence of a variety of systems within the nation.
Last year, the U.S. and Philippines announced joint naval. patrols along the northern Filipino coast, where the Manila. federal government is approximately doubling the number of its forces as part. of a wider military growth.
UNAMBIGUOUS MESSAGING
Over the in 2015, analysts and U.S. authorities have actually started. to broach the Philippines, Japan, Australia and United States. as the Team, carrying out informal joint meetings and policy. coordination as the 4 countries most devoted to complying. in the event of a local war with China.
That four-way relationship, experts say, is now significantly. tighter than that in between the Australia-Japan-U.S.-India. organizing known as the Quad, which likewise holds joint military. drills and works together on humanitarian responses.
India, however, continues to pursue a more independent. foreign policy-- consisting of much more detailed relations with Russia--. in comparison with the Philippines, which now freely expects to. find itself combating together with the United States in any war.
The U.S. now has access to nine bases across the. Philippines, spending more than $100 million on them by the end. of 2023.
This has consisted of rebuilding runways and command and control. systems at Basa Air Base, the largest Filipino flying force. installation now efficient in housing most kinds of U.S. aircraft. in a crisis.
According to the U.S. Militaries, several Reaper drones are. likewise rotating through the Philippines, although further details. of that have actually been kept mainly under wraps.
Far more widely publicised, however, was the SINKEX. aspect of the most current drills, in which Filipino and U.S. forces used rockets to sink a Chinese-built merchant ship.
Video of that was then heavily shared by Filipino social. media channels in what appeared a not-so-subtle message to. Beijing.
According to U.S. authorities, future versions of joint. military drills are likely to be even bigger-- and considerably. more state-of-the-art. That is most likely to include testing drone swarms. in addition to releasing heavy weapons.
This year's workout saw the release of the U.S. Army's. Mid-Range Ability (MRC) missile system, a land-based variation. of the marine Tomahawk missile capable of striking land targets in. either China or Taiwan from the northern Philippines.
Every Balikatan is significantly more complex, stated. Philippines exercise director Significant General Marvin Licudine. This year has produced several new collaborations considering. dynamic difficulties throughout all domains..
(source: Reuters)