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India's jewellery exports are set to decline sharply due to US tariffs
Industry officials warned that India's gems and jewelry industry, worth $32 billion, is bracing itself for a steep drop in exports due to the high U.S. import tariffs. The United States has imposed a reciprocal 26% tariff on India. This is a blow for the hopes that South Asia had of being relieved under President Donald Trump’s global trade policy. Colin Shah, managing Director of Kama Jewelry - one of India's largest diamond jewellery manufacturers - said that the tariff was higher than expected. "It's quite severe and will impact exports." India is the largest hub in the world for diamond polishing and cutting, with nine out of 10 diamonds processed worldwide. India exports gems and jewelry worth $32 billion annually to the United States, which accounts for almost $10 billion. India exports more gems and jewelry to the United States than it does engineering or electronic goods. The industry is responsible for millions of jobs in South Asia. Exports fell 14.5% in 2023-24 (April-March) due to a weakening demand in China. Shah suggested that a long-term bilateral deal with the United States might help to soften the blow. India and the United States have begun talks to reach a trade agreement as soon as possible. We're pretty optimistic that India will be able to land a deal with the U.S. within the next few weeks. We just have to keep pushing through the tough phase for another few months," said Shaunak Parikh. Vice chairman of GJEPC. (Reporting and editing by Rajendra J. Jadhav)
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Stocks fall as fear of recession is sparked by trade war
Investors rushed to gold, bonds and the yen as stocks plunged Thursday, frightened that new U.S. trade tariffs would intensify a global trade war and tip the world towards recession. After President Donald Trump's tariffs, which raised import taxes to their highest level in a century, the dollar fell to its lowest point in six months. Olu Sonola is the head of U.S. Economic Research at Fitch Ratings. Many countries are likely to end up in recession. If this tariff rate remains in place for a long time, you can forget about most forecasts. Nasdaq Futures fell 3.2%; European Futures were down almost 2%, and the Nikkei dropped 3% in Tokyo, reaching eight-month-lows. Apple's market cap fell by over $240 billion after its shares dropped 7% during the evening trade. Nvidia's total market value dropped by 5.6%, or $153 billion. The benchmark 10-year U.S. Treasury Yields dropped more than 15 basis point to a 5-month low of 4.04 % and markets have priced in a greater chance of rate cuts, even though tariffs will likely cause U.S. Inflation to spike sharply. Tai Hui is Asia-Pacific Chief Market Strategist at J.P. Morgan Asset Management. She said: "There will be a supply-side impact via tariffs to the U.S. Economy, and on prices." "And (there is) the uncertainty that businesses and consumers face, which both could be problematic for economic growth," said Tai Hui, Asia-Pacific chief market strategist at J.P. Morgan Asset Management. Trump announced an import tariff of 10%, with much higher rates for some trading partners in Asia. China received a 34% tax, Japan 24%, Vietnam 46 %, and South Korea 25 %. The European Union received a 20% tax. Fitch Ratings reports that the effective U.S. Import Tax Rate has risen to 22% from 2.5% under Trump, and reached levels last seen in 1910. Vietnamese stocks fell 6%. CHINA FOCUS Investors bought up safe havens in anticipation of the countermeasures that China and Europe had promised. They also sold exposure to global growth. Brent futures, which are a good indicator of economic activity, fell more than 2%, to $73,28 per barrel. Australian shares and Australian dollars fell. As foreign exchange traders sought safety outside of the U.S. Dollar, gold reached a new record high at $3160 per ounce. The Japanese yen also jumped more than 1 percent to 147.29 dollars. The euro increased by 0.6% to $1.0912. China has, for the time being, kept its currency stable, keeping the yuan at 0.4%, despite the eye-watering tariffs on Chinese exports. The hit to Vietnam was seen as closing down a popular route to work around the tariffs. The Chinese economy is large and there's a hope that Beijing will support Hong Kong and Shanghai stocks. Losses in Hong Kong were limited to 1.5%, and Shanghai losses to 0.5%. George Saravelos, strategist at Deutsche Bank, said that China should be the main focus of attention in the coming days. He asked: "Will China wait for trade talks... or will it absorb this shock?," "Or will China try to 'export the shock'... via devaluation of yuan?"
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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
Vietnam's China ties loom big in United States hearing on market economy upgrade
U.S. President Joe Biden's. quote to draw Vietnam more detailed as a strategic ally clashed with his. desire for union employees' votes on Wednesday as trade lawyers. sparred over whether the Commerce Department need to upgrade the. communistruled country to market economy status.
The relocation, opposed by U.S. steelmakers, Gulf Coast shrimpers. and American honey farmers, however backed by sellers and some. other business groups, would reduce the punitive anti-dumping. tasks set on Vietnamese imports because of its current status. as a non-market economy marked by heavy state influence.
Vietnam's deepening financial ties to China loomed large in. arguments on both sides of the problem at a virtual public hearing. hosted by the Commerce Department as part of an evaluation and. choice due on July 26.
Steptoe LLP lawyer Eric Emerson, representing Vietnam's. Ministry of Market and Trade, said Vietnam should be graduated. to market economy status because it has satisfied the six. criteria utilized by the Commerce Department to judge whether. nations have a market-driven economy, from currency. convertibility and labor rights to financial investment openness and. resource allotment.
Vietnam has demonstrated that its performance on these. statutory factors is as excellent, or frequently better, than other. nations that have actually formerly been approved market economy. status, he stated, mentioning less federal government assistance for state companies. than India and more openness to foreign financial investment than. Indonesia, Canada and the Philippines.
Vietnam has actually argued it needs to be devoid of the non-market. label since of recent economic reforms, saying retaining the. moniker is bad for increasingly close two-way ties that. Washington views as a counterbalance to China.
Throughout Biden's see to Hanoi last year, the two nations. raised ties to a comprehensive strategic collaboration and U.S. Treasury Secretary Janet Yellen has promoted Vietnam as a. friend-shoring location to shift U.S. supply chains away. from China.
Upgrade advocate Samsung Electronic devices has ended up being. one of the biggest employers in Vietnam since of the nation's. market-oriented changes, the South Korean firm's U.S public. policy head Scott Thompson told the hearing.
Vietnam has actually become a steady, protected supply chain. partner of the United States ... to the supreme benefit of the. U.S. economy, Thompson said.
CHINESE INFLUENCE
However opponents of updating Vietnam - one of 12 economies. identified by Washington as non-market, consisting of China, Russia,. North Korea and Azerbaijan - argued that Hanoi's policy. dedications have not been matched by concrete actions and it. runs as a prepared economy governed by the judgment Communist. Celebration.
They also said Vietnam's markets are extremely based on. financial investment and imports of inputs from China, many of which are. already based on U.S. anti-dumping responsibilities.
Jeffrey Gerrish, a former Trump administration trade. main representing Steel Dynamics Inc, stated. updating would release a flood of unfairly traded imports from. Vietnam, which he stated had become a platform for circumvention. of U.S. tariffs by China.
Instead of countering Chinese impact, any such action. would serve as a gift to China and Chinese interests, Gerrish. stated.
Biden has actually greatly courted union votes in the looming. November governmental election, particularly from steelworkers. in the swing state of Pennsylvania.
He has opposed Nippon Steel's proposed takeover of. Pittsburgh-based U.S. Steel, and required sharply greater. Section 301 tariffs on imports of Chinese steel.
TARIFF CUT
At the heart of the Commerce choice is whether to continue. the higher tariff rates on Vietnamese goods in anti-dumping. cases including non-market economies. U.S. anti-dumping duties. on Vietnamese frozen farmed shrimp are currently 25.76%, while. similar duties on shrimp from Thailand, a market economy, are. only 5.34%.
Assertions of Vietnam's lawyers that increasing Vietnamese incomes. are the result of labor-management bargaining likewise came under. obstacle.
Person Rights Watch stated Vietnam did not fulfill basic labor. rights standards required for reclassification and that it was. false to say that Vietnamese workers can organize unions or that. their earnings are the result of complimentary bargaining.
Vietnam's Trade Union Law only enables government-controlled. ' unions,' it stated in a statement after the hearing.
Nazak Nikakhtar, a previous Commerce Department official in. the Trump administration now with the Wiley Rein law office, said. Hanoi used the very same overbearing policies and predatory. economic practices as China and was likely to side with its. effective neighbor over the U.S.
Emerson, the lawyer representing Hanoi, stated rejection of. market economy status would press Vietnam closer to China.
(source: Reuters)