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Trump's trade tariffs and threats
On Monday, the United States and China will meet The two sides have agreed to reduce reciprocal tariffs temporarily As the two largest economies in the world try to end their damaging trade war that has increased fears of a possible recession, and caused a U.S. economy contraction during the first quarter. The U.S. is reducing the extra tariffs that it imposed in April of this year on Chinese imports to 30%, from 145%. Chinese duties on U.S. imported goods will also fall to 10%, from 125%. The new measures will be in effect for 90 days following a meeting held between the two countries in Geneva. After a series of meetings between U.S. officials and trading partners, after Trump's April 2 tariffs of 10% on most countries were suspended for 90 days as well as the suspension of higher tariffs on many other trading partners. On July 8, the duties will now be imposed. The U.S. China deal comes just days after Donald Trump and Keir starmer, the British Prime Minister, announced a limited trade agreement. This leaves Trump's 10% tariffs for British exports in place. As part of the agreement, Britain agreed to reduce its tariffs from 5.1% to 1.8% and to provide greater access to U.S. products. In recent months, Trump has imposed tariffs of 25% on steel, aluminium and autos. He also levied 25% on imports coming from Canada and Mexico. Trump's second move was to impose a tariff of 100% on films produced outside the United States that are sent into the country. Here's a summary of Trump’s trade-related actions and threats to date. BROAD TARIFFS Trump's vision is based on a gradual roll-out of tariffs that will apply to all U.S. imported goods. Trump's economic team was tasked with developing plans to impose reciprocal tariffs against every country that taxes U.S. Imports. They also had to address non-tariff barriers, such as vehicle safety regulations that exclude U.S. automobiles as well as value added taxes that raise their price. Specific COUNTRIES Trump's tariff proposal targets several key trading partners. MEXICO AND CANADA : Mexico and Canada were the two largest trading partners of the U.S. from 2024 to November. Trump's new tariffs of 25% on imports from Mexico, Canada and the European Union took effect on 4 March as a response to migration and fentanyl. Tariffs were imposed on energy imports from Canada and Mexico, as well as on the majority of goods imported. Canada exports mainly crude oil, other energy products and cars and auto components within the North American automotive manufacturing chain. Mexico exports a variety of goods to the U.S., including industrial and automotive products. Canada retaliated with 25% tariffs against US imports worth C$30 billion (21,13 billion dollars), including orange juice and peanut butter. Other products include beer, coffee, motorcycles, appliances, and motorbikes. The Canadian government said that it will impose additional duties on C$125billion of U.S. products if Trump's Tariffs are still in effect in 21 days. This could include vehicles, steel and aircraft, as well as beef and pork. U.S. commerce secretary Howard Lutnick stated that U.S. officials could still work out a partial solution with the two neighboring countries, and added that they need to do more in the fentanyl arena. In response to Trump's tariffs on steel and aluminum, Canada announced that it would impose retaliatory duties of C$29.8 Billion ($20 Billion) on U.S. imports. The two countries are exempted from the "Liberation Day", announced on April 2 tariffs, but they face a separate 25% tariff on auto imports. Canada has asked the WTO to consult with the U.S. about its import duties on steel and aluminum products as well as levies placed on Canadian cars and parts. CHINA: Trump imposed 10% tariffs on all Chinese imports to the U.S. effective February 4, after repeatedly warning Beijing that it was not doing enough to stop the flow of illegal drugs into the U.S. On March 4, he imposed another 10% tariff on Chinese products. China announced additional tariffs between 10% and 15% on some U.S. exports starting March 10, as well as a number of new restrictions on exports for certain U.S. entities. It then complained to the WTO about the U.S. Tariffs. Trump increased the tariffs on China by 34% in April, making the total to 54%. China responded with a 34% duty on all U.S. products. Trump replied that the U.S. will impose an extra 50% tariff on China, if Beijing doesn't withdraw its retaliatory duties on the U.S. and said "all discussions with China regarding their requested meetings with the us will be terminated." Washington's new round of tariffs raised duties on China to 145%. Beijing then increased levies against U.S. products by 125% as a result. In Geneva, both countries agreed on Monday to temporarily reduce reciprocal tariffs. The U.S. is lowering tariffs placed on China in April from 145% to 30% and Chinese duties will drop from 125% to 10%. The new measures will be in effect for 90 days. Trump has said that the EU, and other countries, have alarming trade surpluses against the U.S. He said that the products of the other countries will be subject to tariffs, or he would demand they purchase more oil and natural gas from the U.S. Steel, aluminum, and cars will be subject to import tariffs of 25%, while other goods will face tariffs of up to 20%, starting April 9. Pharmaceuticals are among the most vulnerable industries, since U.S. companies such as Johnson & Johnson, Pfizer, and others have large facilities in Ireland. Ireland is also a leading exporter of medical equipment. The European Union announced on April 7 that it had offered to offer a "zero for zero" tariff deal in order to avoid a trade conflict. EU ministers agreed to prioritise negotiations and to strike back with targeted countermeasures the following week. In response to Trump's metals duties, the EU announced on March 12 that it would begin imposing counter-tariffs next month on goods worth 26 billion euros (28 billion dollars) from the United States. As a result of the U.S. auto and wider tariffs, the EU is expected to release a more comprehensive package of countermeasures at the end of April. Trump announced on March 13 that he would impose a tariff of 200% on European wines and spirits as a response to EU plans to levy tariffs on American whisky and other products in the next month. BRITAIN: In May, Trump and British Prime Minster Starmer announced a limited trade agreement. The agreement leaves the 10% tariffs Trump imposed on British exports in place and expands access to agricultural products for both countries. It also lowers U.S. import duties that were prohibitive on British auto exports. Trump imposed reciprocal tariffs of up to 50% in April on goods from 57 trading partner countries, including the European Union. He then paused them a few days later to give time for negotiations to July 9. The UK and U.S. have said that this agreement lowers the average British tariff on U.S. products to 1.8%, from 5.1%. However, it keeps the 10% tariff in place on British goods. An official from the UK noted that Washington's demands for a restructuring of Britain's Digital Services Tax, which is levied as 2% of UK revenues for online marketplaces, were not included in the deal. PRODUCTS AUTOS: Trump announced a 25% tariff for imported cars and light truck on March 26. The 25% tax would be added to previous duties on imported finished vehicles beginning on April 3. On April 29, he issued a couple of orders that aimed to reduce the impact of his auto tariffs by combining credits with relief from other materials levies. The Republican President has given automakers two years to increase the percentage of domestic components used in U.S.-built vehicles. Metals: On March 12th, Trump raised tariffs for all imports of steel and aluminum to 25% and extended duties to hundreds downstream products, ranging from nuts and bolts, to bulldozers blades, to soda cans. More than half of the U.S.'s aluminum and steel imports come from Canada, Mexico, and Brazil. Trump ordered on February 25, a new investigation into the possibility of new tariffs on imports of copper to rebuild U.S. manufacturing of this metal, which is critical for electric vehicles, military equipment, semiconductors, and a variety of consumer goods. Just over half of the refined copper that is consumed in the U.S. each year is produced domestically. SEMICONDUCTORS : Trump stated that tariffs would start at "25% or higher" and would increase substantially over a period of one year. He did not, however, specify the date when they would be implemented. Taiwan Semiconductor Manufacturing Co., the largest contract chipmaker in the world, produces semiconductors for Nvidia and Apple, among other U.S. customers. In 2024, it will generate 70% of its revenues from North American clients. LUMBER: On March 1, Trump ordered a new investigation into trade that could add more tariffs to imported lumber. This would be in addition to the existing duties on Canadian Softwood Lumber and 25% tariffs for all Canadian and Mexican products. ALCOHOL: Trump threatened on March 13 to slap 200% tariffs on wine, cognac, and other alcohol imported from Europe in response to an EU plan to impose tariffs American whiskey and other products. This is itself a retaliation for Trump's 25% tariffs which took effect on steel and aluminium imports the day before. PHARMACEUTICALS - While Trump's "Liberation Day' announcement spared the pharmaceutical sector from reciprocal duties, the president said that duties were "under review." He warned that the tariffs could be "at a new level you haven't seen before." ELECTRONICS - Trump exempted smartphones, computers, and other electronics, mostly from China, from the steep tariffs. This was a relief to major technology companies such as Apple, Dell Technologies, and other importers. This move exempts certain electronics from Trump's baseline 10% tariffs on most goods imported from countries other than China.
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Sources say that US customers will be able to obtain Chinese permits for rare earths more easily following the trade truce.
After Monday's truce in the trade war, it is likely that U.S. clients will have an easier time obtaining approval for rare earth export permits from Beijing. However, a complete lifting of restrictions in China, according to sources in the industry, is unlikely. As part of its response to U.S. Tariffs, China added seven rare Earths and related products to a Control List in April. Exporters will now need to obtain licenses in order to sell outside China. The decision was made for all countries. However, it appeared unlikely that U.S. clients would receive export licenses in the midst of the trade war. Elon Musk revealed last month that Tesla was in discussions with Beijing about licenses for its Optimus robotics. According to two industry sources who requested anonymity due to the sensitive nature of rare earths and China, the truce announced Monday could result in the Ministry of Commerce expediting approvals which, in theory, take 45 days. They may even grant licenses soon for U.S. clients. One of the sources said, "We expect to see an increase in the number of export licenses issued. Exporters who have clients in the U.S. may get one soon." They added that China was unlikely to lift the export controls as they were part of a larger package of measures to give Beijing more control over critical minerals in which it dominates mining and processing. China, which is the largest supplier of strategic minerals in the world, has begun to restrict exports from 2023 of minerals that are vital for sectors such as chipmaking, energy transition, and defence. The United States imports the majority of its rare Earths from China and faces the threat of losing the minerals essential to the defence sector and other high-tech industries.
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Russell: China's rebound in crude oil imports has more of a bearish tone than a bullish one.
China's crude oil imports have been positive for the first few months of this year. However, rather than being a sign that fuel demand is improving, the improvement has more to do with rising inventories. Customs data released Friday show that the world's largest crude importer, Saudi Arabia, recorded an average of 11,69 million barrels a day in April. This is down from March's 12,1 million bpd, but up 7.5% from the 10,88 million bpd for the same period last year. The imports in March were the highest since August 2023, and April's relatively strong performance brought the arrivals of the first four month to 11,83 million bpd. This is up 0.5% compared to the same period last year. The strength of imports in April and March was largely due to the availability discounted cargoes coming from Iran and Russia. Both countries are now under new US sanctions. According to commodity analysts Kpler, China's seaborne exports to Russia in April were 1,38 million bpd and in March they were 1,22 million bpd, the two strongest months since 1.51 million in October of last year. Kpler estimated that imports from Iran fell to 743,000 barrels per day (bpd) in April. This was down from 1,39 million barrels per day in March which was the highest monthly figure since October. Imports from Iran were likely under pressure in April as the U.S. administration of President Donald Trump increased pressure on Tehran to curtail its nuclear program. Last week, it was reported that sanctions imposed on two Chinese refiners in March andApril for purchasing Iranian crude had led to problems in sourcing oil. This is because the companies Shandong Shouguang Luqing Petrochemical (SSH) and Shandong Shengxing Chemical were unable to source oil. The sanctions against the smaller operators have also deterred the larger independent refiners to buy Iranian barrels. This has led to the fall in imports for April. How long will Chinese buyers be wary about buying Iranian oil? Or, to put it another way, will they find ways to get around the latest sanctions to resume importing from Tehran? China's imports of Russian crude dropped sharply in January after new sanctions were imposed by the departing administration of former U.S. president Joe Biden against vessels transporting Russian crude. Kpler estimated that China's seaborne exports to Russia fell to their lowest level in 26 months during February. Since then, they have recovered as refiners worked around U.S. restrictions. STORAGE FLOWS Understanding why refiners buy more oil from Russia or Iran is important. As Chinese refiners try to take advantage of the discounted prices, they are likely to store the increased quantities in commercial or strategic warehouses. At the same time, they are concerned that the United States will likely increase sanctions on the Russian and Iranian oil flows. China does not reveal the volume of crude oil flowing in or out of its strategic and commercial stockspiles. However, an estimate of surplus crude can be calculated by subtracting the amount processed from the total crude available through imports and domestic production. According to calculations based upon official data, China's crude surplus in March was 1.74 million barrels a day (bpd), the highest since June 2023. In the first two month of the year oil imports were low due to the high prices at the time of cargo arrangements. This led to the swing in March from a shortage of crude oil available. Analysts Vortexa say that the average increase in inventories in the five-week period ending May 4 was over 1.1 million bpd. China's continued purchases of crude oil to build up its inventory is a question that arises as global crude prices are under pressure due to increased OPEC+ production and global demand concerns sparked by Trump’s trade war. The deteriorating economy may make refiners more cautious, given that periods of low oil prices tend to lead to higher imports. These are the views of the columnist, an author for.
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NRG Energy invests $12 billion in assets to meet growing demand for power
NRG Energy announced on Monday that it will acquire power generation assets in a cash and stock deal valued at 12 billion dollars from energy infrastructure investment company LS Power. The U.S. utility is banking on industrial customers to drive electricity demand throughout the country. In premarket trading, shares of NRG Energy increased by more than 6%. According to the U.S. Energy Information Administration (EIA), power consumption is expected to hit record highs by 2025 and 2026. This will be driven by the proliferation of data centres dedicated to AI, cryptocurrency, and the increasing use of electricity in homes and businesses for heating and transportation. Larry Coben, CEO of NRG, said: "We're in the beginning stages of a supercycle for power demand." NRG announced that the new assets will include a natural gas generation facility as well as an integrated virtual power plant which integrates several resources to supply power to the grid. According to NRG, the deal is expected to be completed in the first quarter 2026. It will double NRG’s generation capacity, bringing it to 25 gigawatts. The company also plans to add 18 natural gas-fired plants totaling 13 GW in key markets across the Northeast and Texas. NRG will provide $6.4 billion in cash, and $2.8 in stock to LS Power. The company will also assume $3.2 billion in net debt and receive tax benefits of around $0.4 billion. NRG stated that the acquisition would immediately increase earnings per share. The company now expects a long-term annual compound growth rate for profit per share of 14%, as opposed to its previous view of 10%. NRG's net long-term debt was $9.81 billion as of March 31.
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Tehran: Iran is getting ready for a visit by Russian President Vladimir Putin
Fatemeh Mohajerani, the Iranian government's spokesperson, was quoted as saying by Russia's official RIA news agency on Monday. Mohajerani, as quoted by RIA, said that "Putin’s trip to Tehran has been planned and preparations have begun." The Kremlin did not immediately comment. Putin met with the Supreme Leader Ayatollah Ayatollah Khamenei at the Iranian Embassy in 2022. This was the Kremlin's first visit outside of the former Soviet Union since he had sent tens and thousands of troops to Ukraine on the 24th of February of that year. Although Moscow bought weapons from Iran to fight in Ukraine, and signed a strategic partnership agreement with Tehran for 20 years earlier this year. Their relationship has been tense since 16th century when Muscovy established official relations with the Persian Empire. Iranian officials claim that Moscow talks tough, but is hesitant to get dragged into major Middle East wars despite Russia’s 2015 foray in Syria. The strategic partnership agreement signed by Iran and Russia in early this year was not accompanied by a clause on mutual defense. (Reporting and editing by Andrew Osborn, Guy Faulconbridge, and Parisa hafezi. Reporting by Moscow buro.
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Guinea cancels the bauxite bauxite concession granted to Kebo Energy SA
Guinea has cancelled the bauxite concession that Kebo Energy SA was granted because it failed to make promised investments. This is according to a state-run television broadcast. State television announced the cancellation late Friday night, citing a declaration issued by Mamady Dombouya, leader of the junta that seized power through a coup 2021. An official from the Guinean mining sector confirmed that the concession has been cancelled. Sources close to Kebo Energy SA claim that the company failed to raise enough funding to complete the project. This included the construction of an alumina refining plant. Kebo Energy SA's spokesperson could not be reached to comment. The Guinean government revoked Emirates Global Aluminium (EGA)'s mining license last week due to the company's failure in fulfilling its commitment to build an alumina refining plant. According to a statement released on Friday, Guinea also revoked a gold mining permit that was previously granted to Guiter Mining SA. Guiter Mining SA has not responded to a comment request. After seizing power through coups, military-led governments have been pushing to reform mining laws and contracts in Guinea, Mali Niger, and Burkina Faso. They have in some cases detained mining executives and suspended operations, as well as seized goods to demand more control over mineral resources. (Reporting from Saliou Samba in Conakry, Writing by Jessica Donati, Editing by Robbie Corey Boulet and Ros Russell).
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Sumitomo Metal buys 30% stake in Rio Tinto's Winu copper and gold project in Australia
Sumitomo Metal Mining, a Japanese company, announced on Monday that it had agreed to purchase a 30% stake from Rio Tinto in the Winu Copper-Gold Project in Western Australia. The move is part of efforts by the Japanese miner to expand its assets in copper and gold, and comes after the two miners agreed last December to create a joint venture for the development and operation of the project. As part of the agreement, SMM is required to pay Rio Tinto $195 million in cash upfront as a consideration for its acquired interest. This payment will be made to Rio Tinto when the transaction closes, which is expected to occur in 2025. SMM also agreed to pay deferred payment of up $235.4 millions, contingent on the achievement of certain milestones, based upon a potential future expansion of mill throughput. Rio Tinto discovered a mineralized zone of copper and gold in 2017 in the Great Sandy Desert in Western Australia. SMM stated that the estimated indicated and implied resources of the project totaled 741 million metric tonnes by the end of 2024. This includes approximately 3 million tons copper and 250 tones of gold. Rio Tinto has begun the environmental permit processes for a mill that will have a throughput of 10 million tonnes per year. SMM's spokesperson said that it is still unclear when the production will begin, and how much total cost of development there will be. SMM, which produced 230 tons of copper via equity holdings during the fiscal year that ended on March 31, plans to increase its copper production to 300,000 tonnes over the long-term. (Reporting and editing by David Evans; Yuka Obayashi)
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London Stocks Gain after US-China Agreement on Tariff Reductions
The main British indexes rose along with global markets on Monday after the United States agreed to temporarily lower tariffs. This eased investor concerns over the trade war between two of the world's largest economies. By 1021 GMT the blue-chip FTSE 100 index was up 0.35% while the domestically focused Midcap Index advanced 1%. After talks in Geneva, both countries announced that the U.S. would reduce its extra tariffs on Chinese imports from 145% to 30% and Chinese duties will drop to 10%. The new measures will be in effect for 90 days. The Geneva meetings marked the first face to face interactions between senior U.S. economic officials and Chinese officials since U.S. president Donald Trump began a global tariff campaign, imposing especially heavy duties on China. Base metal prices increased following the news, and industrial metal miners led both the FTSE 100 & FTSE 250 gains. Glencore, Antofagasta, and Anglo American all rose by nearly 7%. Ferrexpo, a Ukrainian-focused miner, jumped 11 percent, topping midcap performers after Ukrainian President Volodymyr Zelenskiy declared his readiness to meet with Russian counterpart Vladimir Putin for talks in Turkey on Thursday. Luxury goods producers also rose, with Burberry Group and Watches of Switzerland Group increasing by 6.7% and 3.0% respectively. The healthcare subindex fell 2.4% on the other hand after Trump announced that he would issue an executive order to reduce prescription prices to levels paid in high-income countries. He estimated this amount at between 30% and 80%. Other developments include the British Foreign Minister hosting European counterparts on Monday in order to discuss support for Ukraine as well as greater regional defense cooperation, ahead of Prime Minister Keir starmer's meeting with European Union leaders. Separately released economic surveys on Monday indicate a growing pessimism by British employers about hiring plans following recent tax increases and the surging uncertainty of the global economy. This is in line with Bank of England predictions of a weakening labor market. (Reporting by Ragini Mathur in Bengaluru; Editing by Shailesh Kuber)
Gold drops 3% after US and China agree to reduce reciprocal tariffs
Gold fell 3% on Monday, reaching a new low of more than a week after the U.S. announced that it and China had agreed to cut reciprocal tariffs. This boosted the dollar and weakened the appeal of the metal as a safe haven.
As of 0812 GMT on May 1, spot gold had fallen 3% to $3,224.34 per ounce. U.S. Gold Futures fell 3.5% to $3228.10.
The de-escalation in tensions between China, the U.S. and tariff reductions for 90 days is reducing demand for safe assets such as gold, said UBS analyst Giovanni Staunovo.
Near-term prices will likely remain volatile. The higher tariffs will still weigh on the economy and force central banks, later in the year, to lower interest rates. Central banks may also use this price drop to increase their exposure."
The U.S., China and other countries have reached an agreement to reduce reciprocal tariffs in a bid to end the trade war which has impacted the global economy.
After talks with Chinese officials, U.S. Treasury Sec. Scott Bessent informed reporters that the two sides reached an agreement for a 90 day pause in measures.
Last month, the U.S. imposed tariffs of equal value on China. This triggered a trade conflict that fueled fears of a global recession.
The dollar index rose more than 1% versus its rivals. This made gold more expensive to other currency holders.
Jigar Trivedi is a senior commodity analyst with Reliance Securities. He said that gold could fall as the dollar may appreciate, and the reduction of geopolitical risks could "hurt haven demand... The yellow metal could decline to $3.200/oz within the next few months.
Traders will also be watching the U.S. Consumer Price Index on Tuesday to get a fresh look at the Federal Reserve’s monetary policy.
Spot silver fell 2.3% to $11.96 per ounce. Platinum dropped 1.2% to $983.44, and palladium declined 0.9% to $967.35.
(source: Reuters)