Baltic
Dry Index. 1436 unch. Brent Crude 69.27
Spot Gold 3330 US 2 Year Yield 3.90 +0.02
US Federal Debt. 37.075 trillion
US GDP 30.121 trillion.
This is the way
things are, and the Game has been so successful that, like everything, it will
get more and more successful until it stops being successful.
George Goodman, aka Adam Smith, The Money
Game. 1968.
I suspect Trump’s tariff wars will provoke a massive anti-American backlash throughout much of the rest of the world.
Attacking allies like Japan and South Korea isn’t wise. Attacking Malaysia, Kazakstan, Tunisia and the EU, plays into China and Russia’s version of a deeply indebted fading America, desperate to keep the world on a fiat currency dollar reserve standard.
Nothing good for any nation lies in an all against the USA trade war, now just getting underway.
I expect, if sanity doesn’t return soon in the global economy, a repeat of 1929-1932 but with massive debt defaults.
Starting wars is easy. How wars end is more unpredictable.
Asia-Pacific markets trade mixed as investors
assess Trump’s steep tariffs
Updated Tue, Jul 8 2025 12:23 AM EDT
Asia-Pacific markets swung between gains
and losses Tuesday as investors assessed U.S. President Donald Trump’s
latest tariff threats on 14
trading partners.
Goods exported to the U.S. from Japan,
South Korea, Malaysia, Kazakhstan and Tunisia are now set to face 25% tariffs
starting Aug. 1, according to the letters Trump posted on Truth Social.
Other Asia-Pacific markets facing higher
tariffs include Indonesia, which will be hit with a 32% excise duty,
Bangladesh, which was slapped with a 35% duty, as well as Cambodia and
Thailand, which are set for 36% tariff rates, the president’s letters indicated.
Meanwhile, imports from Laos and Myanmar
will face a 40% duty, Trump’s letters posted on Truth Social showed.
Economists at Citi Economics Research
found the exclusion of regions such as Taiwan, India, the Philippines, Sri
Lanka and Pakistan interesting.
“EM [emerging market] economies where we
are hopeful for a framework agreement are India & Taiwan, possibly Israel,
given PM Netanyahu-President Trump meeting,” the economists wrote in a Tuesday
flash note.
In reference to U.S. Treasury Secretary
Scott Bessent’s comments that around 100 letters will be sent to smaller
countries “where we don’t have much trade,” the economists were hopeful that
those that have yet to receive letters “could get minimum 10% baseline tariff.”
Analysts at Barclays, meanwhile, say “one
should not be surprised” if more letters are sent out in the coming days. The
surprise, however, is if “revisions to the tariff rates are large,” they wrote
in a Tuesday note.
″While these tariff rates would — if
implemented on 1 August — imply downside risks to our GDP growth forecasts, the
new deadline also implies an extension to allow more time for negotiations,”
they added.
Japan’s Nikkei 225 benchmark added
0.3% while the broader Topix index ticked up 0.14%.
In
South Korea, the Kospi index
increased by 1.19% while the small-cap Kosdaq moved up 0.36%.
Mainland China’s CSI 300 index advanced 0.74% while
Hong Kong’s Hang Seng Index increased
by 0.8%.
Over in Australia, the S&P/ASX 200 benchmark
fell 0.13% ahead of the Reserve Bank of Australia’s announcement of its
monetary policy stance. The central bank is expected to cut interest rates by
25 basis points to 3.6% when its two-day policy meeting concludes later today.
Meanwhile, India’s benchmark Nifty 50 and the BSE
Sensex started the day flat.
U.S.
stock futures fell in Asian hours after Trump’s fresh tariffs saw all
three key benchmarks on Wall Street hit their worst day since mid-June.
Overnight
stateside, the Dow Jones
Industrial Average tumbled 422.17 points, or 0.94%, and ended at
44,406.36. The S&P 500 fell
0.79% to close at 6,229.98, and the Nasdaq Composite lost 0.92%,
settling at 20,412.52.
Asia
stock markets today: live updates
Trump Threatens Higher Tariffs on Japan, South
Korea
July 7, 2025 at 10:30 PM GMT+1
US President Donald Trump has unveiled
letters that threaten to impose higher tariff rates on key trading
partners, including levies of 25% on goods
from Japan and South Korea beginning Aug. 1.
Trump also announced 25% rates on Malaysia
and Kazakhstan, while South Africa would see a 30% tariff and Laos and Myanmar
would face a 40% levy. The nations were the first in what the president
promised would be a flurry of unilateral warnings and trade deals announced
Monday, two days before agreements are due from trading partners facing his
April 2 so-called reciprocal levies. White House Press Secretary Karoline
Leavitt said around a dozen countries would receive notifications on Monday,
and that additional letters will come shortly.
Many of the tariff rates were largely in
line with what Trump had already announced nations were likely to face.
After a 90-day reprieve from his initial
so-called “reciprocal” tariffs, Trump lowered those duties to 10% to allow time
for negotiations. Few nations did so successfully in the short time given,
though Trump’s latest move effectively offers another extension that
pushes the looming July 9 deadline until at
least the beginning of August.
Trump’s second-term rush to overhaul US
trade policies has served as a steady source of uncertainty for markets,
central bankers and executives trying to game out the effect on production,
inventories, hiring, inflation and consumer demand — routine planning that’s
hard enough without costs like tariffs that are on one day, off the next.
Stocks fell from all-time highs and
the dollar climbed on Trump’s announcement. Read
today’s Markets Wrap. —Jordan
Parker Erb
Trump
Threatens Higher Tariffs on Japan, South Korea - Bloomberg
Trump announces steep tariffs on 14 countries
starting Aug. 1
Published Mon, Jul 7 2025 12:27 PM EDT Updated
Mon, Jul 7 2025 5:50 PM EDT
At least 14 countries’ imports are set to
face steep blanket tariffs starting
Aug. 1, President Donald
Trump revealed Monday.
The president, in a series of social media
posts, shared screenshots of form letters dictating new tariff rates to the
leaders of Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos and Myanmar.
Later in the day, he shared another set of
seven letters, to the leaders of Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia and Thailand.
Goods imported to the U.S. from Japan,
South Korea, Malaysia, Kazakhstan and Tunisia are now set to face 25% tariffs,
according to the letters Trump posted.
South African and Bosnian goods will be
subject to a 30% U.S. tariff, and imports from Indonesia will be hit with a 32%
excise duty.
Bangladesh and Serbia are both at 35%,
while Cambodia and Thailand are set for 36% tariff rates, the president’s
letters said.
Imports from Laos and Myanmar will face a
40% duty, according to the letters Trump posted on Truth Social showed.
The letters Trump signed add that the U.S.
will “perhaps” consider adjusting the new tariff levels, “depending on our
relationship with your Country.”
The letters are the first to be sent
before Wednesday, the day his so-called reciprocal tariffs on dozens of
countries were scheduled to snap back to the higher levels he had announced in
early April.
White House press secretary Karoline
Leavitt said even more letters will be sent out in the coming days.
Later Monday afternoon, Trump signed an
executive order delaying the Wednesday tariff deadline until Aug. 1. The order
says Trump made that decision “based on additional information and
recommendations from various senior officials.”
----For most of the countries, the new
U.S. tariff rates hew fairly closely to what they had faced after Trump
announced his “liberation day” tariffs on April 2.
For instance, under those initial rates,
U.S. imports from Japan were assigned a 24% tariff and South Korean imports
faced a 25% duty.
Following a chaotic week of losses across
global markets, however, Trump on April 9 issued a 90-day pause, which lowered
the various tariff rates to a flat 10%. That pause was set to expire Wednesday,
before Leavitt announced that Trump would extend it by more than three weeks.
All of the letters say that the blanket
tariff rates are separate from additional sector-specific duties on key product
categories.
The letters also say, “Goods transshipped
to evade a higher Tariff will be subject to that higher Tariff.” Transshipping
in this case appears to refer to the practice of transferring goods to an
interim country prior to their final shipment to the U.S., in order to skirt
tariffs.
The form letters assert that the new
tariff rates are necessary in order to correct for persistent U.S. trade
deficits with the 14 countries.
Trump, an avowed tariff fan and a skeptic
of free trade deals, regularly points to those deficits as evidence that the
U.S. is being taken advantage of by its trade partners. Experts have criticized
the view that trade deficits are inherently bad and questioned whether the U.S.
can or should seek to close them.
Not all of the countries targeted Monday
have large trade surpluses with the U.S.
While the U.S. in 2024 had a $68.5 billion
goods deficit with Japan and a $66 billion goods deficit with South Korea, its
deficit with Myanmar was $579.3 million, according to the Office of the United
States Trade Representative.
The U.S. is a major buyer of cars,
machinery and electronics from Japan and South Korea. Kazakhstan exports crude
oil and metal alloys to the U.S., Malaysia sells America electronic components,
and South Africa largely sends precious metals. Key U.S. imports from Laos
include optical fibers, glasses and clothing, while Myanmar’s largest exports
category is mattresses and bedding.
Monday’s letters preemptively warn the 14
countries not to respond to the new U.S. tariffs by imposing retaliatory duties
on their own imports of American goods.
“If for any reason you decide to raise
your Tariffs, then, whatever the number you choose to raise them by, will be
added onto the 25% that we charge,” the letters say.
If the countries “eliminate” their
“Tariff, and Non Tariff, Policies and Trade Barriers,” then the U.S. “will,
perhaps, consider an adjustment to this letter,” according to the letters.
“These tariffs may be modified, upward or
downward, depending on our relationship with your Country,” the letters say.
“You will never be disappointed with The United States of America.”
More
Trump:
Tariffs on Japan, Korea, 12 more starting Aug. 1
The declining dollar faces more headwinds after
posting worst first-half return in 52 years
Published Mon, Jul 7 2025 2:53 PM EDT Updated
Mon, Jul 7 2025 3:18 PM EDT
Fresh off its worst performance since
Richard Nixon was president, the U.S. dollar faces a variety of headwinds
heading into the second half of the year that could have important investing
implications.
The greenback tumbled 10.7% against its
global peers through June, making it the worst first half since 1973, back when
Nixon broke the Bretton Woods gold standard. At its bottom, the currency hit
its lowest point since February 2022.
The path ahead may not look much brighter.
That’s because many of the same factors —
policy volatility, swelling debt and deficits and potential interest rate
cuts from the Federal Reserve, just to name a few — likely will stay on the
minds of investors as they seek other avenues for safe havens.
“Some of this was probably due, and then
we’ve certainly given currency traders enough to contemplate for what’s the
catalyst now,” said Art Hogan, chief market strategist at B. Riley Wealth
Management. “You could check a lot of boxes. You’re running massive deficits,
and nobody wants to stop that on either side of the aisle. You’re alienating
friends both militarily and trade-wise. You’ve got enough potential negative
catalysts. And then once momentum starts, it’s hard to kind of stop it.”
Indeed, the dollar’s slid started in
mid-January and has shown only occasional signs of moderating since. Hopes
that President
Donald Trump’s tariffs would not be as steep as thought helped spark a
brief rally in mid-April, but for the most part the gravitational pull has been
lower.
Market impact
Of course, the dollar’s slide hasn’t
exactly been poison for stocks.
With more than 40% of revenue for S&P
500 companies coming from international sales, a weaker dollar helps make
American exports cheaper, an important point to consider amid the ongoing trade
war.
However, the move lower has coincided with
growing chatter about the potential end of American exceptionalism and dollar
hegemony, with the public share of U.S. debt nearing $30 trillion and the 2025
deficit on track for close to $2 trillion. Should American assets such as the
greenback and Treasury debt lose their prominence on the global stage, that
could have strong ramifications for risk assets like stocks.
Global central banks, for one, are ramping
up their gold purchases, to 24 tons a month, per the World Gold Council, as an
alternative to U.S. assets. Gold had its best first-half run since 1979.
“We think central banks are buying gold to
diversify reserves, reduce reliance on the [dollar], and hedge against
inflation and economic uncertainty,” Lawson Winder, research analyst at Bank of
America, said in a note. Winder said it’s “A trend that we think is set to
continue, especially amid uncertainty surrounding US tariffs and fiscal deficit
concerns.”
More
The
declining dollar faces more headwinds after posting worst first-half return in
52 years
In other news
Hiring confidence worst in 13 years as businesses
brace for further tax hikes
Monday 07 July 2025 8:05 am
Appetite for hiring among employers has
fallen to lows not seen since 2012, as bosses bring up the drawbridge following
bruising hikes to business rates and more tax rises looming at the next
Budget.
Research from the BDO
Business Trends barometer found that firms are “holding back recruitment”
despite indications of a summer recovery.
Employment is “stagnant” in spite of green
shoots for businesses in terms of output, with a 109,000 drop in May of those
currently on payroll “amid policy uncertainty and elevated cost
pressures”.
It remains to be seen what impact the
government’s u-turn on its welfare package will have on business confidence, as
this survey of 4,000 companies was carried out beforehand.
City analysts have warned that Starmer’s
about turn on proposed welfare cuts will
mean a £30bn tax raid.
Scott Knight, Head of Growth at BDO, said:
“We’re seeing early signs of recovery in business output, largely down to the
services sector who have buoyed the economy for a second month in a row.”
Taxed into decline?
Although the BDO notes that hospitality
has boosted the economy during a particularly hot May and June – with summer
sporting and music events boosting spending – the jobs market in the sector
continues to slump.
Elsewhere, the CBI (Confederation
of British Industry) pinned
cuts to hiring and headcount in the financial sector on declining business
output and an ongoing profit crunch.
In concerning numbers for the industry,
the industry body found that the proportion of those reporting a dip in
headcount had ballooned from 2 per cent in March to minus seven per cent in
June.
And 52 per cent of respondents expect
reduced headcount by September, amid “heightened economic uncertainty” in the
wake of last October’s Budget.
The CBI’s deputy chief economist Alpesh
Paleja said: “Conditions deteriorated in the financial services sector over the
second quarter, with business volumes falling at their fastest pace since late
2023 and sentiment dropping sharply.
“Firms … expect to cut back on hiring and
investment going forward.”
City
AM reported
last week that hospitality had shed 69,000 jobs since Rachel
Reeves’s hikes to NICs (national insurance contributions) came into effect in
April.
Hiring confidence
worst in 13 years as businesses brace for further tax hikes
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.
China bans government procurement of EU medical
devices worth over 45M yuan in retaliation for EU trade restrictions
6 July 2025
China has hit the European Union with a
retaliatory ban after the continent’s governing body decided to limit Chinese
participation in public tenders for medical devices.
Both the EU and China are escalating
measures to sever ties and reliance on each other in critical sectors such as
green technologies, healthcare, and advanced manufacturing.
China has begun restricting the imports of
high-value medical devices from the European Union, intensifying a growing
trade dispute between the two countries as a result.
China bans high-value EU medical devices
On Sunday, China’s finance ministry
announced that government procurement of medical equipment from the EU worth
more than 45M yuan, approximately $6.3M, will no longer be permitted.
This announcement is a direct response to
the European Union’s decision last month to limit Chinese participation in
public tenders for medical devices within its member states. That was the first
time the EU invoked the International Procurement Instrument (IPI).
The EU stated that they had unequal access
to China’s medical market and so were justified in the ban, saying European
companies were routinely denied fair opportunities to compete in Asia’s largest
and most lucrative healthcare sector. Notably, the EU’s medical device sector
rakes in $70B per year.
Tensions have been building between both
countries over recent months due to back and forth trade restrictions. The EU’s
restrictions fall under its International Procurement Instrument, a law that
came into force in 2022 and is aimed at enforcing reciprocity in public
procurement markets.
In a separate statement, the Chinese
commerce ministry criticized the EU’s actions, stating that the EU has insisted
on going its own way.
“Regrettably, despite China’s goodwill and
sincerity, the EU has insisted on going its own way, taking restrictive
measures and building new protectionist barriers.”
In addition to banning direct procurement
of EU-made medical devices valued above 45M yuan, Beijing is blocking imports
of devices from other countries that include more than 50% EU-made components
by contract value. These measures came into effect immediately on Sunday, July
6.
The commerce
ministry clarified that
the new policy will not affect products made by European firms operating within
China.
Trade frictions persist
Tensions have been building between
the EU
and China over
the past months. Last month, the European Commission announced new tariffs on
Chinese electric vehicles.
The European Commission cited subsidies
that distorted the global market as a reason for the decision. In retaliation,
China launched an investigation into EU
brandy imports,
which concluded just days ago with the imposition of duties of up to 34.9% on
EU-origin brandy, most notably French cognac.
Other major French producers like Pernod
Ricard, LVMH, and Remy Cointreau were exempted from these
duties under undisclosed conditions.
Analysts view the medical devices ban as a
strategic means of protecting Beijing by signaling its willingness to push back
forcefully against European restrictions.
China’s finance ministry emphasized the
principle of reciprocity, saying it had no choice but to implement
countermeasures after repeated diplomatic overtures were met with resistance.
“China has no choice but to adopt
reciprocal restrictive measures,” the ministry stated bluntly.
So far, the European Union has not issued
an official response. The EU delegation in Beijing also did not immediately
respond to media requests for comment following China’s announcement.
A planned EU-China leaders’ summit is
scheduled to take place in China later this July. The gathering is expected to
focus on economic relations, climate change, and global security, but the
deepening trade rift could overshadow the intended agenda.
Observers say the timing of Beijing’s
announcement could be a deliberate effort to apply pressure ahead of the
summit.
While both countries have emphasized the
importance of dialogue and cooperation, the current trajectory of trade policy
points to growing fragmentation between the second and third largest economies
in the world.
For European medical device manufacturers,
the new Chinese restrictions could deal a significant blow, especially for
companies that relied on large government contracts. Multinational firms will
also need to evaluate whether or not to localize more of their production in
China or seek alternative markets.
Likewise, the EU’s restrictions will
likely continue to exclude Chinese firms from a share of public healthcare
tenders in Europe.
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.
2 houses in this Florida county caught fire caused by lithium-ion
batteries. Here's what insurance will cover
Sun, July 6, 2025 at 9:30 PM GMT+1
It started with a lithium-ion battery left charging on a
workbench.
That single battery caused a raging fire that tore through the
Odonnell family's garage in Spring Hill, Florida.
“Absolutely it was sitting on his work bench, which is wooden.
Probably had some oil and WD-40 and things on it and I think it just went up,”
homeowner Cindy Odonnell told WFLA.
The fire erupted without warning, gutting the entire garage of the
home in Hernando County. “And there were fire trucks all up and down the road
and there was smoke pouring out of the house and water running down the sides,
from all sides from everywhere I could see,” she added.
The incident makes clear the risk posed by lithium-ion batteries —
and it’s a risk that fire departments across the country are sounding the alarm
on.
‘We’re just grateful to walk away’
“Lithium-ion batteries and electric vehicles, that’s a hot topic
in the fire services across the country,” said Hernando County Fire Chief Paul
Hasenmeier. “There are a large number of fires. Probably right now our leading
cause of fires in residential houses is from lithium-ion batteries.”
Hasenmeier confirmed this is the second lithium-ion battery fire
within a few weeks in Hernando County alone.
Just two weeks before the Venetia Drive garage blaze, Hernando
County Fire Rescue responded to another lithium-ion battery fire, this time in
Brookridge, at a mobile home on Moriah Avenue, according to a report by
WFLA.
The blaze had started while a golf cart was charging inside a side
garage, then quickly spread and engulfed the mobile home. Though firefighters
extinguished the fire in about 30 minutes, the property was a total loss.
Fortunately, no injuries were reported.
While the Odonnells lost much of their property, they're counting
their blessings.
“We're just grateful to walk away from it all,” Steve Odonnell
said. He and their beloved three-legged squirrel, Flash, escaped unhurt.
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
People
of the same trade seldom meet together, even for merriment and diversion, but
the conversation ends in a conspiracy against the public, or in some
contrivance to raise prices.
Adam Smith
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