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US tariffs to cripple India’s diamond industry, affecting jobs and exports
Surat's diamond polishing centre is experiencing a wave of anxiety as the U.S. Tariffs threaten the gem and jewellery exports of India, putting the livelihoods of tens of thousands workers at risk. The United States, who takes over 30% of South Asia's gems and jewellery exports set a reciprocal tariff of 27% on it on Friday, as demand in other important markets, such as China and the Middle East and Europe, is easing. Dinesh Nadiya is the chairman of Indian Diamond Institute in Surat. He said that tariffs would have a major impact on the demand for diamonds. Job losses are likely to occur, at least over the short-term. Surat, Gujarat's second largest city, is the home of Narendra Modi. It processes and polishes 80% of all rough diamonds in the world. India accounts for 9 out of 10 diamonds that are processed worldwide. The diamond market has come to a standstill, with more than 10,000 traders and broker gathering each day to try to determine how the situation will develop in the next few months. Mansukh Mangukiya has been a diamond dealer for over 50 years. He said that the current conditions are even worse than the financial crisis of 2008. Sevanti Shah of Venus Jewels said that smaller manufacturers would be the most affected by a slowdown. "Many will have to close down." In fiscal year 2023/24, India exported gems and jewelry worth $32 billion to the United States, which amounted to nearly $10 billion or 30.4% of that total. Third largest export to U.S. India exports gems and jewellery to the United States in third place after electronic and engineering goods. This sector employs millions of people, including artisans. The Surat Diamond Bourse was inaugurated in 2023 by Modi to create thousands of jobs and act as a hub for trade. However, the business outlook is not good. It was billed as the largest office building in the world, surpassing even the Pentagon. Diamond dealers stated that the industry would seek to find alternative markets in order to compensate for the lost demand from the U.S. Shaunak Parikh said that the sudden drop in demand for rough diamonds could result in a reduction of imports. Parikh stated that exporters are trying to get as much cargo to the United States as they can before the new tariffs go into effect. Orders that cannot be delivered sooner may be cancelled, or put on hold. Vipul Shah said that the tariffs will also increase U.S. diamond prices and crimp demand. Chetan Navadiya is facing an uncertain future as a diamond producer turned contractor. Navadiya stated, "I lost my company due to the slowdown in the market." "I had to take on job work in order to survive. But even these contracts may not arrive by now because of U.S. tariffs."
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Iraq invites meeting to resume discussions on Kurdistan Regional Oil Exports
The state news agency reported that the Iraqi Oil Ministry requested an urgent meeting on Friday with the relevant parties in order to resume negotiations regarding the export of Kurdistan Regional Oil. Iraq's Oil Ministry also stated that it had taken serious measures to demonstrate goodwill in the negotiations to ensure a resumption exports. It added that unrealistic demands outside of legal frameworks hindered reaching a final deal. The Ministry said that it was working to ensure the proper implementation of amendments to the budget laws approved on February 2 so that exports via Iraq-Turkey can resume as quickly as possible. The report said that a deal on Kurdistan crude oil exports was crucial for stopping illegal and inappropriate crude sales. Washington has been pressing Iraq to resume the flow of shipments. In February, it was reported that President Donald Trump's administration asked Iraq to allow this to happen or face sanctions. APIKUR is a grouping eight oil companies operating in Iraqi Kurdistan. In a joint statement, APIKUR said it would not resume its exports until Baghdad made a firm commitment that they will honour their existing contracts and guarantee payment for both past and future exports. (Reporting and editing by Tala Ramadan, Jana Choukeir and David Evans).
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China responds to global trade war by imposing sweeping tariffs on U.S. products
China announced an additional 34% tariff on U.S. products on Friday. This is the most significant escalation of a trade conflict with President Donald Trump, which has fueled fears of a worldwide recession and caused a stock market crash. Beijing announced that it had added several U.S. companies to an export control listing and classified others as "unreliable". From Canada to China, nations have prepared retaliation as a trade war escalates after Trump raised U.S. Tariff Barriers to their highest levels in over a century. This led to a drop in the world financial markets. Shigeru Shiba, the Prime Minister of Japan, which is one of the top trading partners with United States, said that tariffs created a national crisis. A plunge in bank shares on Friday sent Tokyo's stock exchange on its way to a worst week for years. JP Morgan, an investment bank, said that it now expects the global economy to enter recession by year's end. This is up from 40%.
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Indian stocks close the week with a decline as IT and commodity shares fall on recession fears
Indian shares closed the week on Friday lower, after U.S. President Donald Trump imposed sweeping retaliatory duties that intensified global trade wars and stoked fears of recession. Due to their exposure to U.S. economic growth and commodities, information technology and commodity stocks have led the declines. The Nifty 50 dropped 2.61% this week to 22,904.45 and the BSE Sensex fell 2.65% to $75,364.69. The indexes fell by 1.5% and 1.2% respectively on the day. Indian markets, while Trump's tariffs are higher than expected, were not as affected on Thursday. They were buoyed by the optimism surrounding a lower levy on India, at 26% compared to major emerging economies, giving it a competitive advantage. Aishvarya dadheech, chief executive officer of Fident Asset Management said: "That's more (of) a narrative than reality." Emkay Global Financial Services said that India's relative less impact than other Asian nations is "a thin silver lining on a dark cloud". Dadheech stated that India could not be immune from the negative sentiment or be an exception in a global market sell-off. The IT index fell 9.2% in its largest weekly decline in five years on fears that a possible recession in the U.S. could derail the technology spending recovery. Concerns about global growth caused metals and energy prices to fall 7.5% and 3.8% respectively. The drugmakers have had a turbulent week. Stocks rose on Thursday after the sector was exempted of tariffs. However, the optimism was short lived as Trump threatened to levy "levels not seen before" in tariffs. The pharma-index dropped 4% on the Friday after losing 2.7% over the past week. The mid-cap and smaller-cap indexes fell 2% and 2.6% respectively for the week. HDFC Bank and Bajaj Finance both rose 1.3% and 1.50%, respectively, against the trend. They were among the top three gainers on Nifty.
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Trump tariffs and economic uncertainty fuel further settlements between CEOs, activists
Yeti Holdings shares fell in December, and then again in March after President Donald Trump threatened to impose tariffs on China. The company's factories were located in China. Yeti, the Austin-based manufacturer of $300 coolers and travel mugs for $40, faced another problem behind the headlines. According to sources familiar with the discussions, Engaged Capital pushed management to return cash back to shareholders, expand to new geographies and be more transparent to investors. The hedge fund predicted that these changes could help Yeti's shares triple in the next three year. Faced with market volatility and concerns over consumer demand Yeti and Engaged reached a settlement. This ended a potentially messy dispute and lifted the shares by nearly 6% on that day. Yeti declined to comment on the matter. According to a dozen analysts, investors, lawyers and bankers, the peace at Yeti is a part of an increasing trend, as corporations and their activists decide to find common grounds amid the prospect of a tariff battle, mass layoffs in U.S. Government agencies, and the growing threat of a possible recession, which is weighing down on stock prices and clouding business outlooks. Barclays reports that 29 global companies settled their claims in the first three months of this year, a jump of 32% from a similar period last year. Duncan Herrington is a managing partner of consulting firm Jasper Street Partners. He said, "If the uncertainty in the market continues, there will likely be more settlements as fewer disputes are likely to end up in a vote." Another recent settlement was with the cybersecurity company Rapid7, which agreed to add three additional directors. Consumer health company Kenvue settled with Starboard Value. The company is known for household brands like Band-Aid, Tylenol and Tylenol. Bankers and lawyers have been told by corporate chiefs who recently navigated through the Covid-19 pandemic that they should remove distractions such as board fights in order to focus on running their businesses. Lawrence Elbaum is the co-head Vinson & Elkins shareholder activism practice. He said that many companies want to remove risk from their business so they can concentrate on it. "Activists are also suffering because their returns have been hammered, so they want quick settlements." It is true that big board fights continue at U.S. Steel and Phillips 66, as well as Autodesk. This shows it's too early to declare peace in corporate America. Both sides show flexibility and a willingness to reach a settlement. Herrington, of Jasper Street, said that people are now more willing to cooperate. Activists, who used to try to get their founders onto boards, are less adamant about securing a seat on the board for themselves. Bankers and lawyers say that more boards will consider candidates suggested by activist investors if the candidate has deep industry expertise. People familiar with the selection procedure said that Engaged Capital wanted Yeti's product offering to be expanded, so they introduced Arne Arens to management. Arens is now the director of the company. He has clothing industry expertise. Many activists have lost money in the past year, so they are less likely to continue a costly, uncertain battle. "You need to calculate your chances of winning a fight," said Lyndon Park who is the CEO of ICR Shareholder Advisory. If both parties are willing to compromise, then a settlement will not be a loss. (Reporting and editing by Dawn Kopecki, Edward Tobin and Svea Herbst Bayliss)
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Russian seaborne diesel exports fell in March, data shows
LSEG data and market sources showed that the decline in Russian seaborne diesel and gasoline exports was due to unplanned maintenance at local refineries. In January and February, drone attacks targeted Russian refineries owned and operated by Rosneft in Ryazan, Syzran, and Saratov as well as Lukoil Volgograd. The traders said that the fall in oil processing in March was due to the resultant decline in processing. Calculations based on LSEG data and other market sources showed that the total diesel and gasoil exported from Russian ports dropped to 3.8 million metric tonnes, a 5% drop from February. According to shipping data, the principal importers of Russian gasoil and diesel in March were Turkey and Brazil. Exports of diesel and gasoil from Russian ports to Turkey increased last month by 17%, compared to February. Loadings to Brazil also increased on a monthly base, almost by a quarter, to 0.85 millions tons. Shipping data shows that Russia's March exports of diesel and gasoil to African countries dropped by half compared to the previous month, totaling about 0.64 millions tons. Egypt, Morocco Togo and Tunisia were among the largest importers. Near the Cyprus port of Limassol, tankers carrying approximately 335,000 tons Russian diesel are heading for ship-to -ship transfers. The destination of vessels carrying about 250,000 tonnes of diesel loaded in Russian ports is marked "for orders", which means that their discharge points have not been declared or are not known. (Reporting and editing by Barbara Lewis; Reporting by In Moscow)
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Gold falls 1% as traders focus on the payroll data and tariff risk
The gold price fell 1% on Friday, as investors digested the latest tariffs from U.S. president Donald Trump. Investors then turned their attention to the U.S. Non-farm Payrolls Report for clarification on the Federal Reserve’s monetary policies. As of 0901 GMT, spot gold was down by 0.9%, at $3,086.32 per ounce. However, it was still on course for its fifth consecutive weekly gain. U.S. Gold Futures declined 0.4% to $3,107.70. Gold hit a new record at $3167.57 in the previous session before falling more than 2% shortly after. This was due to a wider sell-off caused by Trump's tariffs on imports. It appears that a combination of profit-taking, and the markets are partially responsible for the tariffs announced. Zain Vawda is a market analyst for MarketPulse. He said that a growing consensus amongst analysts in the industry suggests that some countries may be willing to negotiate lower tariffs. This could also be holding back gold's current momentum. Trump announced that he would impose an initial 10% tariff on all imports into the U.S., and increased duties on some of America's largest trading partners. Nitesh Sha, the head of macroeconomic and commodities research for Europe at Wisdom Tree, said that gold could be closer to $3.600 in the first quarter 2026. The non-farm payrolls report for the United States is due at 12:30 GMT. Fed Chair Jerome Powell will also be speaking later that day. The NFP jobs report and Fed Chair Jerome Powell’s speech could determine a potential gold recovery. Market analysts are increasingly speculating Powell could strike a more dovish tonality, which would provide support for the markets. Fed Governor Lisa Cook stated that the Fed could take its time to evaluate a highly unsettling environment before moving rates. Gold is a good hedge against inflation and geopolitical unrest, but higher interest rates may dampen its appeal. Spot silver fell 1.6% to $31.38 per ounce, and is headed for its worst weekly performance since December 2023. Palladium fell 0.2% and platinum 1.4%, both headed towards a weekly loss.
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Russian rouble barely changed amid forex turmoil
The Russian rouble was not much changed on Friday against the U.S. Dollar and China's Yuan, amid turmoil in global forex markets due to U.S. president Donald Trump's tariffs that triggered a crash in global financial markets. The rouble had remained flat on the OTC market at 84.20 USD by 0910 GMT. The Russian currency has gained about 25% this year against the dollar, mainly on expectations that geopolitical tensions will ease. Following the announcement of tariffs, the dollar index, which measures the currency in relation to a basket of six other major currencies, fell by 1.9% on 2 April, its worst day since 2022. Analysts at BCS Express said that the rouble is immune to global currency fluctuations. "Barriers to cross-border capital flow limit international speculators, while sanctions have cut Russia-U.S. Trade to its lowest level since 1992." The exchange rate of the rouble is therefore not sensitive," they said. The rouble didn't react to the 2% drop in oil prices Friday, as Russia's primary export commodity was set for its worst week in many months due to concerns about the global trade conflict. The rouble also remained flat on the Moscow Stock Exchange at 11,58 against the Chinese Yuan, which is the most commonly traded foreign currency in Russia. (Reporting and editing by Gareth Jones.)
New York's precious metals are less expensive than London because they are not subject to Trump's tariffs
The Comex futures that are most active for precious metals have reduced their premiums over London spot prices after Washington removed the metals' import tariffs. This will encourage more metals to be flown to the United States.
On Wednesday night, President Donald Trump announced reciprocal import tariffs that raised effective import taxes to levels not seen in the past century. However, there were some exclusions, including gold, silver, and platinum group metals.
Last week, the premium between Comex futures and London spot prices stood at about $20 per troy-ounce compared to $43 on Tuesday. It is usually below $10.
Silver and platinum futures premiums over London spot prices also dropped sharply.
Few in the industry believed that bullion would end up attracting tariffs. The New York-London Arbitrage still moved a large amount of metals across the Atlantic, as speculators placed bets on the dislocation," said Adrian Ash.
Now that metal looks like it is no longer needed.
In December-March, gold and silver worth over $80 billion were delivered in Comex's warehouses. Import tariffs were a threat.
The latest data from Comex (part of CME Group) shows that gold in U.S. warehouses has reached a record high of 44.5 millions troy ounces, worth $138 billion, compared to 17.1 million in Nov. when Donald Trump became U.S. president.
Comex stocks currently equal five years' worth of U.S. gold and silver consumption.
The price spread that the market measures through the exchange futures for physicals (EFPs) will not further decrease the premium until then.
Robert Gottlieb is an industry expert and a former head of precious-metals at Koch Supply and Trading. He said that for the shipments reversed, EFPs had to go negative. This would allow one to sell London and purchase the futures contracts at a cheaper price. (Reporting and editing by David Evans; Polina Devlin)
(source: Reuters)