Baltic
Dry Index. 1423 -08 Brent Crude 70.33
Spot Gold 3323 US 2 Year Yield 3.86 -0.04
US Federal Debt. 37.083 trillion
US GDP 30.125 trillion.
On the whole, human beings [Presidents] want to be good, but not too good, and not quite all the time.
With apologies to George Orwell
With a double barrel shot gun, President Trump just proposed to shoot the US economy in both feet!
Little need for my input this morning, except to point out that the normal global economic order is starting to collapse.
Copper now costs way more in the U.S. than
elsewhere. This could hit its economy hard
Published Wed, Jul 9 2025 8:37 AM EDT Updated
Wed, Jul 9 2025 9:17 AM EDT
The cost of copper for U.S. buyers has
rocketed after President Donald Trump said he
would impose a 50% tariff on imports of the metal.
It means that already elevated prices are
now even higher in the U.S. than elsewhere — and analysts warned of
a hit to businesses and the wider U.S. economy as a result.
The U.S. imports just under half of its copper, which is used in
products ranging from machinery, electronics and household goods to housing and
infrastructure projects. Trump’s stated ambition is to increase domestic
production, but experts say this will take years to ramp up and decades to
fully meet demand — at a massive up-front investment cost.
Traders have been poised for a
presidential announcement on copper duties since February, leading to major
shifts in inventories away from Europe and Asia and into the U.S.
However, the rate and timing was unclear —
and market participants say they remain so, given the ambiguity in official
messaging this week, potential room for exemptions to be negotiated, and recent
examples of swift policy changes from the White House. Commerce Secretary
Howard Lutnick told
CNBC Tuesday the duties would likely be implemented at “the end of
July, maybe August 1.”
It’s a reflection of the unusually wide
premium that’s developing between U.S. copper and the metal elsewhere.
As U.S. prices remain elevated despite
larger-than-usual inventories, the gap in U.S. Comex futures over
those on the LME has fluctuated between $500 and $1,500 since Trump announced a
probe into copper in February. Historically, that rate has been near-zero, and
was around the $150 level in 2024.
Prices on the Shanghai Metals Market,
meanwhile, have been similar to those on the LME.
On Tuesday, the Comex-LME price premium
soared by 138%, moving above $2,600 a tonne, according to London-based agency
Benchmark Mineral Intelligence.
By August, Benchmark said that U.S.
consumers could be paying around $15,000 per metric ton for copper, while the
rest of the world pays around $10,000, assuming the 50% tariff rate comes into
effect at the start of the month.
This huge discrepancy will start to have a
major economic impact, Daan de Jonge, Benchmark’s lead analyst for copper
demand and prices, told CNBC.
“On household spending, if you’re buying a
new fridge, air conditioner, car, everything is going to get more expensive,
and companies could reasonably be expected to pass that on,” he said. Depending
on the final baseline tariff rates, U.S. consumers could opt to buy goods
produced more cheaply abroad due to that impact.
“If we’re looking at public investment,
U.S. debt has got more expensive, the dollar is declining, and now you’re
getting a major raw material cost increase for infrastructure investments ...
I’d expect that to start showing employment effects.”
Another side effect may be that projects
start to swap copper for cheaper aluminum, which in some cases can be used as a
replacement, though it is heavier and more expensive to maintain in the long
run, de Jonge said.
“All of this definitely enters the risk
range of demand destruction,” he noted.
‘Watershed moment’
Obstacles to increasing domestic
production include longstanding permitting delays for mining projects and the
huge cost of opening new facilities, which would rely on current market
dynamics persisting long into the future.
“The question is, can America substitute
imported products with domestically-made products, and how quickly?” Peter
Chase, senior fellow at the German Marshall Fund, said Wednesday on CNBC’s
“Squawk Box Europe.” Major sources of U.S. copper include Chile, Canada, Peru
and Mexico.
More
U.S.
copper price spike could have severe economic consequences
Asia-Pacific markets mixed as traders assess Bank
of Korea rate decision and Trump tariffs on Brazil, copper imports
Updated Thu, Jul 10 2025 12:25 AM EDT
Asia-Pacific markets traded mixed on
Thursday as traders assessed the Bank of Korea’s decision to keep rates steady,
as well as U.S. President Donald Trump’s announcement to slap a 50% tariff on
Brazilian imports beginning August 1.
Trump also said Wednesday that the 50%
tariff on copper imports, which he had announced
the previous day, will take effect on Aug. 1.
Singapore’s benchmark Straits Times Index
scaled to another new high Thursday, notching its fourth straight day of gains.
The country’s equities climbed 0.47% to
hit a fresh record of 4,077.41 points Thursday as of 11.24 a.m., data from LSEG
showed.
Trump says 50% tariff on copper will begin
Aug. 1
U.S. President Donald Trump said Wednesday
that the 50% tariff on copper imports, which he had announced
the previous day, will take effect on Aug. 1.
The decision was made after he received a
national security assessment, Trump said in a post on Truth Social.
“I am announcing a 50% TARIFF on Copper,
effective August 1, 2025, after receiving a robust NATIONAL SECURITY
ASSESSMENT,” Trump wrote.
“Copper is necessary for Semiconductors,
Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar
Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are
building many. Copper is the second most used material by the Department of
Defense.”
Read the full story here.
Bank of Korea expectedly keeps rates
steady at an almost three-year low
South Korea’s central bank held its policy
rate at 2.5%, keeping it steady at an almost three-year low.
South Korea’s economy contracted by 0.2%
quarter on quarter in the first three months of this year due to weak
construction activity and softening export growth, while it remained flat on an
year on year basis.
Read the full story here.
Asia
stock markets today: live updates
Europe’s Vehicle Makers Feel US Tariff Pain
July 9, 2025 at 5:15 PM GMT+1
European vehicle makers are feeling
the pain of President Donald Trump’s trade policies. Volkswagen sold fewer of
its most profitable cars in the second quarter as US
tariffs cut into deliveries of its premium brands Porsche, Audi,
Lamborghini and Bentley.
Meanwhile, Daimler Truck expects US
orders to remain at “extremely”
low levels until uncertainty over Trump’s policies subsides and
freight volumes begin to recover, Chief Financial Officer Eva
Scherer told us. Logistics companies have cut back on truck purchases amid
a drop in shipments of tariff-hit goods such as steel
and aluminum.
“We’re in a situation where it’s very
difficult to predict from a CFO perspective,” Scherer said. “Scenario
planning is more important than ever.” —Joshua
Gallu
Germany and France are seeking
to quell a growing squabble over the countries’ next-generation
fighter jet when their leaders meet for high-profile
consultations in Berlin later this month. Chancellor Friedrich Merz and
President Emmanuel Macron are scheduled to meet during the week of July
21, but friction
over the Future Combat Air System jet has moved to the top of the
agenda, we’re told. Their meeting will be crucial to putting the
next-generation warplane back on track.
Kuwait’s state energy company said OPEC+’s
latest super-sized supply hike and recent interactions with customers suggest
persistent demand growth beyond the summer driving season. “We’re
seeing some potential tightness in the market, which gives us an opportunity to
capture market share in the future,” Sheikh Nawaf Al-Sabah, chief
executive officer of Kuwait Petroleum, told us. Tanker tracking by
Bloomberg shows that the Gulf state’s crude
exports surged to a 19-month high in June as the OPEC+ alliance
brought curbed barrels back.
Europe’s Vehicle Makers Feel US Tariff Pain - Bloomberg
President Threatens Brazil With Tariffs in Letter
Assailing Prosecution of Bolsonaro
July 9, 2025
- Trade
war: President
Trump said he planned to impose
tariffs of 50 percent on imports from Brazil, and accused the
Brazilian authorities of unfairly charging his political ally, former
President Jair Bolsonaro, with attempting a coup — an extraordinary
attempt to use trade to influence a criminal trial in a foreign
nation. Brazil,
the largest of the eight countries that Mr. Trump targeted for
tariffs on Wednesday, said it would respond with levies of its own.
·
Political payback: The Trump administration appears to be targeting officials who oversaw the
investigation into the 2016 Trump campaign’s connections to Russia, a sign that
the president’s appointees intend to follow through on his campaign to exact
retribution against two perceived enemies: the former C.I.A. director John O.
Brennan and the former F.B.I. director James B. Comey.
·
President Trump
announced on social media that he plans to impose a 50 percent tariff on
imported copper as of Aug. 1, after his advisers submitted a report to him
arguing that protecting the industry is important for national security. Ttrump
said that copper is important for aircraft, ammunition and other defense
industries. But it is also heavily used by manufacturers and the construction
industry, who will pay significantly higher prices for imports.
Brazil will
respond to Trump’s 50% tariff with ‘reciprocity,’ says da Silva
Published Wed, Jul 9 2025 4:26 PM EDT
Brazilian President Luiz Inacio Lula da Silva said
Wednesday that his country will respond with reciprocity to U.S.
President Donald Trump’s
newly announced 50% tariff rate
on his country’s exports, citing a recently adopted Brazilian law
that authorizes the government to take proportional countermeasures.
Trump said
Wednesday the U.S. will impose the tariff on
imports from Brazil starting
Aug. 1, partly in retaliation for the ongoing prosecution of the country’s
former president, Jair Bolsonaro.
Trump said in a letter that the new tariff — a massive jump
from the 10%
rate the U.S. imposed on imports from Brazil in early April — is also
a response to the “very unfair trade relationship” between the two countries.
The letter to da Silva followed nearly two dozen others
that Trump has recently sent to other world leaders, dictating steep new tariff
rates on the goods they sell to the U.S.
But the letter to Lula goes further than the rest, by
imposing a new U.S. import tax rate explicitly as a punishment for a country
engaging in internal political and legal affairs that Trump dislikes.
Da Silva replied to
the letter Wednesday, saying Brazil would respond to the tariffs in accordance
with its newly adopted economic reciprocity law.
“Brazil is a sovereign country with independent
institutions that will not accept being lectured by anyone,” wrote da Silva,
according to a CNBC translation of his social
media post.
---- Trump
has previously sounded off on Brazil over its treatment of Bolsonaro, a vocal
ally of the U.S. president who is standing trial over his role in an alleged coup to
overturn his 2022 reelection loss.
Trump called the situation “an international disgrace” in
the letter, which he shared publicly in a Truth Social post. He slammed the Bolsonaro trial as a
“Witch Hunt,” echoing the language he used to describe the multiple criminal
investigations that he faced before winning the 2024 U.S. presidential
election.
He also railed against “Brazil’s insidious attacks on
Free Elections, and the fundamental Free Speech Rights of Americans,”
apparently referring to the Brazilian Supreme Court’s recent ruling that could hold
social media platforms liable for their users’ content.
Trump also claimed that Brazil’s trade policies have
caused “unsustainable Trade Deficits against the United States,” which threaten
the U.S. economy and national security.
But the United States has a goods trade surplus with
Brazil, which totaled $7.4 billion in 2024, according to the Office
of the U.S. Trade Representative.
Da Silva called out Trump’s false allegation of a trade
deficit in his response, citing U.S. government figures.
---- “Please
understand that the 50% number is far less than what is needed to have the
Level Playing Field we must have with your Country,” Trump wrote. “And it is
necessary to have this to rectify the grave injustices of the current regime.”
Portions of the letter to Lula match the verbiage of the
21 tariff letters that Trump has sent to other world leaders since Monday.
More
Brazil
respond to Trump 50% tariff with 'reciprocity'
In only in Britain news.
Fraudsters open bank account registered to
Buckingham Palace
8 July 2025
Monzo has been fined £21m after allowing
fraudsters to sign up for bank accounts using “implausible” UK addresses,
including Buckingham Palace.
The online-only bank, best known for its
vivid orange debit cards, was hit with the penalty by the Financial Conduct
Authority (FCA) after an investigation found it had failed to verify customers’
addresses between October 2018 and August 2020.
According to the FCA, some customers were
even able to open accounts using fake details – including addresses such as 10
Downing Street as well as Monzo’s own business address.
The lender also broke anti-money
laundering rules by
letting high-risk customers open accounts using foreign addresses and Post
Office boxes – despite Monzo only being able to serve UK customers under the
terms of its banking licence.
After the FCA
raised concerns about
its processes and told it to stop opening accounts for high-risk customers in
2020, the regulator said Monzo flouted the demand for another two years and
signed up another 34,000 high-risk customers.
Therese Chambers, from the FCA, said:
“Monzo onboarded customers on the basis of limited, and in some cases,
obviously implausible information – such as customers using well-known London
landmarks as an address. This illustrates how lacking Monzo’s financial crime
controls were.
“Banks are a vital line of defence in the
collective fight against financial crime. They must have the systems in place
to prevent the flow of ill-gotten gains into the financial system. Monzo fell
far short of what we, and society, expect.”
Monzo’s failures coincided with a surge in
customers as it sought to boost account opening. Between early 2018 and 2023,
customer numbers surged from 590,000 to 7.4m.
During this period, Monzo failed to
collect key information from customers, including their jobs and occupations,
the FCA said.
The regulator said the failings came after
an employee responsible for Monzo’s money-laundering controls left the
challenger bank in October 2018. Monzo then shared this staff member’s duties
between other senior employees.
TS Anil, Monzo’s chief executive, said:
“The FCA’s findings relate to a historical period that ended three years ago
and draw a line under issues that have been resolved and are firmly in the past
– with our learnings at the time leading to substantial improvements in our
controls.”
Fraudsters open
bank account registered to Buckingham Palace
Wealth and stealth: Starmer eyes fresh tax hikes
Updated: Wednesday 09
July 2025 3:11 pm
Keir Starmer has refused to rule out a
wealth tax or so-called stealth taxes, a day after the fiscal watchdog said
unfunded spending commitments on welfare put the public finances under intense
pressure.
The Office for Budget Responsibility (OBR)
gave a damning verdict of the state of public finances in a
comprehensive report published on Tuesday, warning that “unfunded” U-turns on
welfare totalling some £6bn and defence spending hikes added “downside risks”
for Chancellor Rachel Reeves.
During Prime Minister’s Questions, Starmer
pointedly ignored a question from Tory leader Kemi Badenoch on whether he would
rule out introducing a wealth tax. In contrast, the PM answered “yes” when
asked to rule out hikes to income tax, national insurance and VAT.
But when asked whether he would introduce
a wealth tax, which former Labour Party leader Neil Kinnock suggested could see assets worth more
than £10m taxed at a rate of two per cent, Starmer avoided a straight
answer.
More
Wealth
and stealth: Starmer eyes fresh tax hikes
In other news.
China’s producer prices fall 3.6% in June, biggest
drop in nearly two years as deflation deepens
Published Tue, Jul 8 2025 9:41 PM EDT
China’s producer prices plunged
3.6% in June from
a year earlier, marking its largest decline in nearly two years, as a deepening
price war rippled through the economy that’s already grappling with tepid
consumer demand.
The consumer price index edged 0.1% higher
in June from a year ago, according to data
from the National Bureau of Statistics Wednesday, returning to growth after
four consecutive months of declines.
Economists had forecast a flat reading
compared to the same period a year earlier, according to a Reuters poll.
Core CPI, stripping out food and energy
prices, rose 0.7% from a year ago, the biggest increase in 14 months, according
to NBS.
The drop in producer prices, however, came
worse than the expected 3.2% in a Reuters poll and marked its biggest fall
since July 2023, according to LSEG data. The PPI has been mired in a multi-year
deflationary streak since September 2022.
Mainland China’s CSI 300 index rose 0.19%
following the release.
“It is too early to call the end of
deflation at this stage [as] the momentum in the property sector is still
weakening [and] the ‘anti-involution’ campaign is still at its early phase,”
said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
Involution, known colloquially as “neijuan”
in China, refers to the price wars plaguing some consumer sectors.
Last week, Chinese policymakers, in a top
economic policy meeting chaired by President Xi Jinping, criticized the
excessive price competition by Chinese companies to entice consumers and clear
excess inventory, as the U.S. tariff onslaught has threatened the viability of
selling to the world’s largest consumer market.
Beijing pledged to tighten
regulations on such aggressive price-cutting that has been unable to
influence consumer behavior while biting into businesses’ profitability.
Profits at industrial firms plunged 9.1% in
May from
a year earlier, marking the steepest fall since October last year.
“Businesses should be guided to improve
product quality and support the orderly phasing out of outdated production
capacity,” a Chinese
state-backed newspaper said, citing the meeting.
The rebound in consumer prices last month
was helped by a consumer goods trade-in scheme offering subsidies for household
appliances, electronics and electric vehicles, said Zichun Huang, China
economist at Capital Economics.
That boost, however, will likely diminish
in the second half of this year, Huang noted, denting the underlying inflation
if the oversupply issue persists.
“With goods supply continuing to outpace
demand, persistent overcapacity means price wars among manufacturers are likely
to continue,” Huang added.
More
China’s producer
prices see worst drop in nearly two years
Conformity is the last refuge of the unimaginative.
Oscar Wilde
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Trump
tariffs raise the specter of sharper economic downturn for South Korea and
Japan
Published
Tue, Jul 8 2025 10:21 PM EDT
In
the first batch of “tariff letters” sent to trading partners, U.S. President
Donald Trump took aim at two of the closest U.S. allies in Asia: Japan and
South Korea — both are already bearing the brunt of the existing duties on auto
and steel exports.
Additional
tariffs would further hurt these two exports-dependent economies that are
grappling with a slowdown in growth, with Japan likely staring at a technical
recession, or two straight quarters of economic contraction.
Both Japan and South Korea saw first-quarter
gross domestic product contract on a quarter-on-quarter basis.
While
South Korean imports to the U.S. face 25% tariffs, the same as Trump promised
in April, the rate on Japan has been raised by 1 percentage point to 25%.
Exports
— including services — made up almost 22%
of Japan’s GDP in 2023, according to the latest data from the World Bank,
and 44%
of South Korea’s GDP in 2023.
Currently,
imports of automobiles and auto parts to the U.S. incur a 25% tariff, while
steel and aluminum attract a 50% levy on most countries.
Automobiles
are Japan’s largest exports to the U.S. and are also among South Korea’s top
exports. South Korea was also the
fourth-largest exporter of steel to the U.S. in 2024, according to the
International Trade Administration under the U.S. Commerce Department.
Japan’s
Prime Minister Shigeru Ishiba reportedly
said the
country “actively seeks the chance of an agreement that benefits both
countries, while protecting Japan’s national interest.” In May, Ishiba said that his country will not accept a deal
that does not see the removal of auto tariffs.
The
newly announced tariffs will lower Japan’s GDP by 0.1 percentage point by
end-2026, according to Norihiro Yamaguchi, Lead Japan Economist at Oxford
Economics.
“Given that the economy is already suffering from high tariffs on auto and
elevated global trade policy uncertainly, and also weak consumption, the impact
shouldn’t be dismissed,” he told CNBC
Yamaguchi said that Japan’s economy will “barely grow” in the second half of
2025 and in the first half of 2026, if not falling into a recession.
The
U.S. is Japan’s largest export market, with 21.3
trillion yen ($145.76 billion) of shipments to the country in 2024,
while South
Korea exported goods worth $127.8 billion to the U.S. in the same
year, and counts the U.S. as its second-largest export market.
Reflecting a “more intensified tariff policy stance,” the Bank
of Korea in May nearly
halved GDP growth estimates for 2025 to 0.8% from February’s projection of
1.5%.
“The
recovery in domestic demand has been delayed, while export growth is expected
to slow further due to the impact of U.S. tariffs,” the BOK said.
Frederic
Neumann, Chief Asia Economist at HSBC told CNBC that should Japan and South
Korea fail to reach a deal, these tariffs will pose “considerable headwinds to
growth.”
Both Japan and South Korea are already facing sluggish domestic demand.
Trump tariffs
portend more economic troubles for South Korea and Japan
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section. Updates as they get reported.
Popular power bank brand orders recall and halts production after
flight ban
8 July 2025
One of China’s most popular portable
power bank makers has recalled its products and halted operations, weeks after
the country banned uncertified power banks on aircraft.
Romoss Technology has suspended
production for six months after it was caught in a scandal over safety issues,
according to Chinese media reports.
The company, based in Shenzhen, has also recalled nearly 490,000 power
banks from three models made between June 2023 and July 2024 after metal debris
in their battery cells was found to pose overheating risks.
Romoss notified employees it was
suspending operations from 1 July and reportedly gave them a furlough of a
monthly salary equal to 80 per cent of Shenzhen’s minimum wage.
The manufacturer has over 690 employees
“but only a small group involved in the recall incident is expected to continue
working to ensure basic operations”, a staff member told Yicai Global,
expressing shock at the announcement.
The company has taken its e-commerce
shops offline and removed products listed on leading e-commerce platforms like
Temu.
China's aviation regulator last month
banned passengers from carrying power banks without Chinese safety
certification markings or those recently recalled by manufacturers.
The move, applicable to anyone boarding
a flight in China, followed a series of incidents globally involving lithium battery products,
including power banks, overheating on planes.
The Civil Aviation Administration said
power banks must clearly have the “3C”, or China Compulsory Certification,
marking to be allowed on aircraft.
The certification is mandatory for
products that may impact health, safety and environmental protection.
The Independent has contacted Romoss for comment.
On 10 June, according to local media,
Chinese authorities had temporarily suspended Apex Wuxi's 3C certification
after it reportedly altered separator materials in battery cells.
Apex Wuxi is one of China’s leading
producers of core power bank parts, which it supplies to Romoss and its rival
Anker Innovations. The suspension prompted Romoss and Anker to recall a
combined 1.2 million power bank units because of combustion risks.
Lithium batteries in devices
such as laptops, mobile phones, electronic cigarettes, and power banks can
produce smoke, fire or extreme heat when manufacturing faults or damage cause
them to short-circuit. They are a growing concern for aviation safety as
passengers carry more battery-powered items on flights.
Last year, the US Federal Aviation Administration recorded three incidents of lithium batteries overheating on
planes every two weeks globally compared to just under one a week in 2018.
In January this year, South Korea said
that a spare power bank was the possible cause of a fire that had engulfed a
Busan Air flight to Hong Kong.
Since that incident, airlines globally
have been tightening power bank rules. Aviation rules generally say power banks
should be carried in cabin baggage but increasingly airlines are banning their
use on board and say they must be kept within view to spot any problems.
Popular power bank brand orders recall and halts production after flight
ban
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Each
generation imagines itself to be more intelligent than the one that went before
it, and wiser than the one that comes after it.
George Orwell
No comments:
Post a Comment