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ROI-Global trade in rude health? McGeever: Yes, with a catch
Global trade is not cooling in the shadow of tariffs and trade wars. It's heating. How durable is it when the price and not the volume is what's stoking up the flames? Recent trade data from the U.S., China and other major economies show that cross border commerce is growing at a faster rate than economists expected. In many cases the "increased activity" and the "surprisingly strong headline export numbers" were primarily driven by "higher prices". These reflect the spike in inflation caused by the Iran War, particularly on the oil and energy markets. This was especially true in the U.S. where exports reached a record of $327 billion last month, largely due to shipments of a wide range goods. In fact, the goods surplus shrank to the lowest level since 2020. This is good news for the U.S. economic system, since the declining deficit could contribute to the growth of the economy in the second quarter. This may be primarily due to the high prices of fuel, oil and other energy products. It is important to ask how long the improvements will last. It's not only the price that matters. Canada's physical export volumes are now back where they were prior to the U.S. Presidential election which returned Donald Trump to office in November 2024. This has triggered trade tensions with the United States. According to CIBC, the exports of April were only second to those in February last year when companies were preparing for Trump's looming duties. Base effects are another factor which may have a positive impact on headline trade figures. The slowdown in trade during the first half of the year as Trump's tariff wars began is now used to compare year-over-year figures. It is too early to predict a trade revival. CHIPS, CHIPS HORAY The price is also playing a major role in Asia's trade explosion, but the booming AI-related demand also fuels the sizzling numbers. China, the largest exporter in the world, saw its total exports rise 19.4% in May. Pantheon Macroeconomics says that sales of high-tech goods accounted for 12 percent. While the value of integrated-circuit exports has more than doubled in the last year, the export volume rose by only 2%. This suggests that the headline figure is inflated because the price was high. The same thing is happening in other sectors. However, Beijing policymakers and critics will continue to focus on headline dollar figures, particularly the large one, China's total 12-month rolling trade surplus of more than $1 trillion. Taiwan's AI export surge was even more impressive. Exports rose in May more than expected to the second highest level by value ever, up almost 52% compared to a year ago. Price was again a major factor. TSMC, the largest manufacturer of 'advanced chip technology used in AI applications', is based in Taiwan. It also supplies Nvidia and Apple, among other tech giants. Chips, computer equipment and software, as well as other high-tech products, have seen a surge in price over the last year, largely due to an explosion in demand. Goldman Sachs Global Institute estimates that AI-related investments will reach $7.6 trillion by 2031. SURPRISING RESILIENCE Global trade has shown remarkable resilience, which few observers could have imagined possible in the face of volatile market conditions. Trump's "Liberation Day tariffs" triggered a global trade war, which may have ended decades of internationalization. Geopolitical rifts also threaten trade flows, notably in Middle East. AI frenzy?can be credited with keeping global trade moving. The demand for these applications has accelerated, and much of the trade of AI-related products takes place across borders. The question is, can this continue? Could the rise in AI compute costs curb demand eventually? Could major powers seek to reduce AI supply chains in order to minimize national security risks? The AI boom is unlikely to fade away anytime soon, which suggests that trade activity could'remain resilient', even in the face of deglobalization, tariffs and protectionism. Everything seems to be dependent on the outcome of this tech story, just as it is with other parts of the global economic system. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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IIR reports that the gasoline unit of Nigeria's biggest refinery will resume full rates by mid-June.
IIR Energy, a monitor of the oil industry in Nigeria, said that Dangote's refinery had derated its gasoline-making unit (RFCC), by 34%. The?unit is expected to resuming full fares around mid-June. The refinery didn't immediately respond to our request for comment. "Initially, the lighter crude that was being processed resulted?insufficient feed availability for the RFCCU. By the end of the month, IIR Energy confirmed that there was a problem with the RFCCU's flue gas sliding gate valve. IIR confirmed that the repair work is nearly complete on "that issue" in an email. Fuel prices are at record highs due to the war in the Middle East. Africa's biggest refinery was fully operational in early 2018. Its goal was to?transform Nigeria into a major supplier of?refined? products after decades of inadequate refinery capacities. According to Kpler's data, gasoline exports have fallen from 81,000 barrels per day last June, down to 17,000 barrels a day in May.
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Expected increase in US consumer prices for May
The Federal Reserve has more reasons to maintain interest rates at the same level until 2027, as U.S. consumer inflation grew at its fastest pace in three years during May. According to the Labor Department Bureau of Labor Statistics, on Wednesday, the Consumer Price Index rose 4.2% over the 12-month period ending in May. This is the biggest gain since April 20,23. In April, the CPI increased 3.8% on a year-on-year basis. Prices rose 0.5% monthly after a 0.6% increase in April. Economists surveyed by predicted?the CPI to increase 4.2% on an annual basis and gain 0.5% monthly. Inflation has been outpacing wage growth for the second consecutive month, which could weigh on overall economic growth. For the second straight month, inflation outpaced wage increases. This could have an impact on economic growth. The rising cost of living has become a political liability for Donald Trump and his Republican Party as they seek to maintain control of Congress during the November midterm elections. Trump's promise to reduce inflation was a major reason he won the presidential election of 2024. However, his approval ratings have fallen as frustration grows over his economic management. Core CPI, excluding volatile components such as food and energy, increased 2.9% on an annual basis in May. This was after a 2.8% increase in April. The so-called core CPI rose 0.2% monthly after increasing 0.4% in April. For its 2% target, the U.S. Central Bank tracks Personal Consumption Spending Price Indexes. All inflation measures are well above the Fed target. Data from the U.S. Energy Information Administration revealed that in May, the national average gasoline cost increased by?8.8% to $4.60 per gallon. Gasoline prices were at one time up by over 50% since the U.S. Israel and the United States attacked Iran in late February. In recent weeks, prices have fallen amid a ceasefire. This has led some economists to cautiously hope that May will be the CPI peak. This report came after news that the economy had posted a?month with above-expectations growth of jobs in May for a third consecutive?month. For the third month in a row, the?unemployment level remained at 4,3%. Although financial markets are pricing in an increase, economists continue to believe that the central bank has a high bar to raise interest rates. (Reporting and editing by Andrea Ricci, Chizu Nomiyama, and Lucia Mutikani)
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Sempra says Texas grid projects require over $7 billion investment after ERCOT backing
Sempra, an energy infrastructure company, announced?on Wednesday it had received approvals for a number of new transmission projects in Texas. These, along with earlier go-aheads are expected to cost over $7 billion. Last week, the Electric Reliability Council of Texas, the operator of?the electricity grid in Texas, approved the new projects. According to the U.S. Energy Information Administration (EIA), U.S. electricity demand reached'record levels' in 2025, and it is expected to continue to rise 'this year as tech companies rapidly build data centers that use as much electricity as an entire town at one site. Sempra’s latest projects include new lines along the I-35 and southern Dallas-Fort Worth corridors, along with a?upgrade approved in April. These are expected to support 16 gigawatts in new power demand. As they rush to meet the soaring demand of tech giants, power companies in the U.S. are raising prices and increasing capital expenditures to expand infrastructure. Oncor Electric Delivery Company in which Sempra holds an 80.25% stake?expects the?majority? of the projects to be constructed. The projects should be completed between 2026-2034. Reporting by Katha Kalya in Bengaluru, Editing by Shailesh Kuber
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Hungary's Lake Velence is drying up and threatening tourism, wildlife and
Experts and locals say that the water level in Hungary's largest lake will?fall to new lows due to climate change and years of mismanagement of water. This could threaten its ecosystem and tourism sector. Experts say that Lake Velence is a popular destination for holidaymakers, but the water level may soon be too low to allow swimming and sailing. A recent warm day saw children playing on newly exposed sandbanks that extended far beyond the shoreline of the lake. Rental boats were resting at a jetty, now far away from the water, and on the sand. Data from the National Directorate General for Water Management revealed that the lake level in the town of Agard measured 56 cm, only 3 cm higher than the 'historic low' of 53 cm, which was recorded in 2022 - the year Hungary suffered an extreme drought. The water level was 80 cm in the early months of 2026. Experts warned that without substantial rain, the water level could drop by as much as half a centimetre per day, and reach as low as 30cm by summer's close. Tibor Horanyi, from the Association of Great Lakes, said that the water level would drop by at least 25-30cm in the next 30-40days and that the record low will be reached within days. Horanyi said that the problem was not just climate change, but also decades of poor water management. Businesses have already been affected by the disruption. Peter Szaniszlo, a sailing instructor, has started moving his operations to the?Lake Balaton. "Most people who wanted to learn how to sail chose me because Lake Veence is near Budapest. "Now they have to go to Balaton," said he. GOVERNMENT PLEDGES TO ACT Laszlo Gájdos, the Minister of Environment, met last week with local mayors, water management experts, and NGOs to discuss the future of the lake. Gajdos stated in a Facebook post that the government is working to improve the water quality and restore the shoreline. It will take some time to figure out how to replenish water in Lake Velence, according Arpad 'Pal Eotvos the mayor of Gardony a town located on the lake. Eotvos stated, "We'll have to adapt to this." As the climate changes, so will we. (Written by Anita Komuves, edited by Alexandra Hudson).
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In May, the share of Russian aluminium in LME stocks rose to 93%.
Data from the London Metal Exchange showed that, in May, the share of Russian-origin aluminum stocks in London Metal Exchange warehouses increased to 93%, up from 72%, in April. This was due to traders' decision to withdraw Indian metal. The total available or on-warrant aluminium inventories (0#MALSTXLOC>) on the LME dropped 23% to 254,625 tons in May, and now stand at 250 525 tons. This is the lowest level since May 2025. Production and logistics constraints in the Middle East are limiting global supply. Absolute terms, the amount of?Russian aluminum available in May fell by 3,950 tonnes to 237.175. The?share of?Russian aluminium rose however as Indian stocks fell by a greater 71,750 tonnes. After the withdrawal of 2,275 tonnes of Indonesian aluminum, the LME warehouses only had?17.450 tons of Indian aluminium left at the end May. In March, the share of Russian aluminium had reached 92% before Indian aluminum was placed back on warrant. Many traders do not want to deal with Russian metal, even though it can be traded if it was produced before April 13, 2020. To comply with Western sanctions, aluminum produced in Russia after that date is not allowed to be stored at the LME warehouse system. The share of Chinese copper in the LME's copper stock increased to 53% from 51% in April, despite the fact that the total amount dropped by 36,425 tonnes to 141.025 tons. The total?available copper stock decreased by 79.375 tons, to 266,875 tonnes. At the end of December, the?share of Chinese nickel remained at 71% of LME stock. Reporting by Tom Daly. Mark Potter (Editing)
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India rejects US claim of excess capacity in textiles and steel
Amitabh Kumra, a trade official in India, said that India did not have'surplus manufacturing capacity' in textiles and steel as claimed in the Section 301 investigation by the U.S. Trade Representative. Washington has cited structural surplus capacity in Indian industries, from solar panels and petrochemicals, to steel and textiles. It also cites its $42 billion goods trade deficit with the United States by 2025. Kumar, India's Additional Trade Secretary, said that its textile and Steel output should be evaluated in relation to the size of its population, its domestic demand, and its growth needs rather than its absolute production. "Overcapacity" is a matter of perspective. Kumar stated that they did not believe there was any overcapacity. He added that India's textile consumption per capita was low, especially for?man-made fiber and technical items. This country has a tropical climate. We wear cotton. "How can we have an overcapacity?" Kumar rejected U.S. concerns about?steel production, saying India's requirements reflected the country's development. He said that India's per capita consumption of steel is one of the lowest in the world. The output remains low compared to the population and growth requirements. Analysts say Washington uses the threat of Section 301 Tariffs to pressure India to increase its purchases of U.S. energy products and defence goods, and to open up their markets to agricultural products and other products. New Delhi wants a deal with the United States that would include preferential tariffs for competitors. However, the negotiations have been clouded due to the uncertainty surrounding the U.S. investigation against India. In March, the USTR office launched investigations against India among 16 other countries for policies like subsidies, state funding and industrial planning which 'let factories continue producing even when market conditions were not supportive. The U.S. has proposed an additional 12.5% tariff on imports of goods from India, and other countries. They cite their?uses of forced labour. India, however, says that these are not final as?New Delhi engages Washington in the Section 301 Process. USTR also considers a separate tariff against India. It claims that there is excess capacity in certain sectors, such as textiles, and exports hurt the U.S. industrial sector. Kumar claimed that the move was aimed at "a particular country" while also serving to further other commercial goals. The Trade Minister Piyush Goyal stated last week that both sides are moving quickly to finalise the first tranche of an agreement on trade, possibly as early as mid-July. (Reporting and writing by Manoj Kumra; editing by YPrajesh, Clarence Fernandez and Sakshi Dayal)
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The chips in MORNING BID AMERICAS are blue
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets It's unnerving that the relapse of U.S. Tech stocks on Tuesday occurred as oil prices dropped sharply in the same session. This shows how stock market anxiety extends "well beyond" the energy story. The crude?prices on Wednesday were volatile after the U.S. and?Iran exchanged missile strikes overnight, the most alarming direct interaction between the two sides since the fragile ceasefire was established. Below, I will go into more detail. Check out my most recent column about why the stock exchange is becoming more important to a growing number employees and households. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. The SOX chip index dropped nearly 2% Tuesday, but the selloff at midday was much more severe. It had been over 8%. Wednesday's equities market mood was further darkened by the fall of Asian indexes and the decline in U.S. Futures before the bell. This comes before the U.S. CPI report for May, which is expected to be released?on Tuesday. Headline inflation will likely creep over 4% for the very first time in 3 years. Core inflation is predicted to hover around 3%. The report is not only going to set the tone for the stock market, but also a 10-year Treasury Auction later that day. A Federal Reserve rate increase by the end of the year has now been baked into the futures markets. The ECB could deliver a rate hike tomorrow. Meanwhile, Japanese wholesale price data released on Wednesday confirmed that the Bank of Japan would follow suit next Monday. Chinese producer inflation data showed that prices were also hot in China last month. Oil's dramatic fall to a 7-week low Tuesday was one of the few positives in the last 24 hours. The U.S. claimed that oil exports were increasing through the Strait of Hormuz, while Washington and Tehran are struggling to reach an agreement. The renewed U.S. - Iran hostilities'muddied' the picture a bit, as crude prices rose before reversing their gains in volatile trading on early Wednesday. Even though oil prices have fallen, some are still concerned about a possible supply shortage this month due to the shrinking U.S. crude oil stocks. This all sets a noisy, bumpy background to the SpaceX IPO that will take place later this week. Some say that the event is contributing to the market volatility as investors are clearing the decks to accept the new offer. Chart of the Day The U.S. Trade deficit shrank in April, as exports of capital goods and petroleum products jumped to new records. Oil exports jumped to $37 billion, a record-high from $28 billion dollars in March. This was due to both increased volumes and the?elevated prices of oil tied to Middle East conflict. The U.S. has become a net exporter of oil. Its petroleum trade surplus increased to $17.7billion from $9.4billion in March. Watch today's events * U.S. CPI for May (8:30 am?EDT). * U.S. 10-year note auction (1 p.m. EDT) Want to receive the "Morning bid" in your email every morning? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent the views of News. News is committed to the Trust Principles and values integrity, independence, freedom from bias, and impartiality.
As United States hikes China tariffs, imports skyrocket from China-reliant Vietnam
As the United States magnifies efforts to reduce trade with China by treking tariffs, it has actually significantly enhanced imports from Vietnam, which depends on Chinese input for much of its exports, data show.
The rise in the China-Vietnam-U.S. trade has greatly widened trade imbalances, with the Southeast Asian nation in 2015 publishing a surplus with Washington close to $105 billion - 2.5 times bigger than in 2018 when the Trump administration first put heavy tariffs on Chinese products.
Vietnam now has the fourth-highest trade surplus with the United States, lower just than China, Mexico and the European Union.
The significantly cooperative relationship emerges from trade, customs and financial investment information reviewed from the United Countries, the U.S., Vietnam and China, and is verified by initial price quotes from the World Bank and half a dozen economic experts and supply chains experts.
It reveals that Vietnam's export boom has been fuelled by imports from neighbouring China, with inflows from China nearly exactly matching the worth and swings of exports to the United States in recent years.
In preliminary quotes shown , the World Bank reckons a 96% connection in between the two flows, up from 84%. before Donald Trump's presidency.
The rise in Chinese imports in Vietnam accompanying the. boost in Vietnamese exports to the U.S. might be seen by the. U.S. as Chinese firms using Vietnam to skirt the additional. tariffs imposed on their products, said Darren Tay, lead economic expert. at research firm BMI, noting that could lead to tariffs against. Vietnam after U.S. elections.
The growing trade imbalance comes as Vietnam looks for to obtain. market economy status in Washington after President Joe Biden. pushed to raise diplomatic ties with its former enemy.
At over $114 billion last year, U.S. imports of items from. Vietnam were more than twice as big as in 2018 when the. Sino-American trade war started, which enhanced the Southeast Asian. nation's appeal amongst manufacturers and traders who looked for to. reduce risks connected to China-U.S. stress.
That surge represented majority the $110-billion. drop because 2018 in imports from Beijing, U.S. trade information reveal.
In essential industries such as textiles and electrical equipment,. Vietnam captured more than 60% of China's loss, said Nguyen. Hung, a professional in supply chains at RMIT University Vietnam.
However Chinese input remains important, as much of what Vietnam. exports to Washington is made from parts and parts produced. in China, data reveal.
Imported elements accounted in 2022 for about 80% of the. worth of Vietnam's export of electronics - the U.S.'s main. import from Hanoi - according to data from the Asian Development. Bank.
One-third of Vietnam's imports originate from China, mostly. electronic devices and components, according to Vietnam information which did. not offer further information.
Around 90% of intermediate goods imported by Vietnam's. electronics and fabric markets in 2020 were subsequently. embodied in exports, the Organisation for Economic. Co-operation and Advancement said in a report, noting that was. higher than a decade previously and far above the average in. industrialised countries.
The cooperative relationship is shown in newest data: In. the very first quarter of this year, U.S. imports from Vietnam. totaled up to $29 billion, while Vietnam's imports from China. amounted to $30.5 billion, matching likewise matching flows. in previous quarters and years.
As inflation remains high, the White Home has actually remained. quiet on Vietnam's big trade surplus, but that might change. after the November vote, experts say.
A possible circumstance is that after elections, whoever wins. may alter the policy towards Vietnam, stated Nguyen Ba Hung,. principal financial expert at ADB's Vietnam objective, keeping in mind that would. nevertheless raise U.S. import expenses.
The U.S. Embassy in Hanoi decreased to talk about trade. imbalances.
Vietnam's foreign and trade ministries did not reply to. requests for comment.
China's commerce ministry did not instantly react to a. request for comment.
COTTON AND PANELS
The surge in the China-Vietnam-U.S. trade shows the increase. in financial investments in the Southeast Asian manufacturing center, as. companies move some activities from China.
A number of those producers are Chinese firms that include worth. in their brand-new factories in Northern Vietnam but still rely. heavily on supply chains from their homeland.
But in many cases the trade involves ended up products. labelled as Made in Vietnam despite no worth being added in. the country, as the U.S. Department of Commerce concluded in an. investigation over solar panels last year. A separate probe on. aluminium cables and 2nd on presumably unfairly subsidised. solar panels are underway.
Another reason Vietnam is drawing U.S. examination is its. direct exposure to Xinjiang, the Chinese region from where the U.S. prohibits imports over allegations of human rights infractions against. minority Uyghurs.
Xinjiang is China's primary source of cotton and polysilicon. utilized in solar panels. Both are crucial for Vietnam's market, whose. exports of cotton clothing and photovoltaic panels accounted for about. 9% of exports to the U.S. last year.
Vietnam is the country with the greatest volume of shipments. by value rejected entry into the U.S. over Uyghur forced labour. risks, according to U.S. customizeds information.
Vietnam's import of raw cotton from China fell by 11% last. year to 214,000 lots, but it was approximately two times as big as in. 2018.
China likewise exported to Vietnam at least $1.5 billion-worth. of cotton clothing, up from nearly $1.3 billion in 2022. Meanwhile, U.S. imports of cotton clothing from Vietnam fell by. 25% to $5.3 billion last year, according to the information, which may. not consist of all cotton products.
The fall in U.S. imports came as Vietnam last year went beyond. China as the main exporter of items covered by the Xinjiang. restriction, said Hung Nguyen of RMIT.
(source: Reuters)