United States Archives

Trump Takes Aim at Chinese Ships with Docking Levies at U.S. Ports

Written by IntaCapital Swiss on March 26, 2025. Posted in News & Reports. Leave a Comment

The new U.S. administration has suggested imposing multi-million U.S. Dollar levies on Chinese ships wishing to dock in ports in the United States. Experts in this arena say that this will disrupt global trade and suggest the fall-out could be more disruptive to global trade than tariffs. An immediate example of this fall-out can be located in Germany where port workers should be loading a first round 16,000 MT of steel piping, bound for a huge Louisiana energy project. However due to the proposed levies, the cargo is now sitting gathering dust in a German warehouse.

This is a nightmare scenario for exporters, importers, and ship owners alike – especially as on this particular Atlantic shipping route, 80% of these ships were all built in China. The owners of the ships are not necessarily Chinese, it is just the ships that were built in China, which are being targeted. In this instance, the shipment of 16,000 MT of steel pipes are looking at a potential levy/surcharge of USD 1–3 Million which means the overall transportation cost could increase by 200%–300%.

Current data from the USTR (Office of the US Trade Representative), reveals that China now produces in excess of 50% of the world’s cargo ships by tonnage, (5% in 1999), with Korea and Japan accounting for most of the remaining cargo ship building. In 2024, shipyards in this arena accounted for 0.01% of cargo ships built, thus experts have surmised that this levy madness on Chinese-built ships can only help the long-held aim of the USTR in reviving the US merchant shipbuilding industry, a sleeping giant if there ever was one.

On Monday, 24th March 2025, a hearing begins in Washington D.C. into the ramifications of this trade levy, with representatives from industries from all corners of the world. They will explain to the hearing that these proposals are more damaging than Trump tariffs because of the severe threat to supply chains and, as a result, would severely disrupt global trade, dwarfing the results of any trade tariffs. Furthermore, some carriers have announced that not only will the increase in costs be passed on, but will pull out of docking at smaller ports which, of course, will suffer from the downturn in business.

Analysts suggest that, in theory, these levies could generate between USD 40–52 Billion for the United States. However many U.S. companies are worried as there are escalating tariffs on Chinese goods, aluminium, and steel, plus there are reciprocal tariffs due on 2nd April 2025. However, analysts point to the obvious downside, where U.S. businesses (especially the farming industry) and ultimately the U.S. consumer will come under pressure, raising prices throughout the United States, and threatening jobs across the board.

However, the revival of the U.S. shipping industry is definitely in the sights of President Donald Trump and has now been cast as part of National Security as per the issue of the draft document “Make Shipbuilding Great Again”. Once again, it is felt that President Trump will put pressure on allies to do the same or they will face penalties as well. It is feared the allies are currently not happy being treated like second-rate citizens, so this outcome will be interesting to see. Everyone involved in the United States appears to agree that U.S. shipbuilders cannot compete on an even playing field due to unfair production and market practices by the Chinese.

However some major U.S. carriers have advised if the full implementation of this draft document is achieved, it could put them out of business. There is hope that some of the proposals will be watered down, but if not one veteran in the maritime transportation industry advised that these proposals will be like an “Apocalypse for the trade”. Furthermore, due to lack of domestic production, the “Louisiana Energy Gateway” project (slated to deliver the next generation of LNG – Liquid Natural Gas a Trump favourite), still needs 16,000 MT of steel piping.

Federal Reserve Holds Interest Rates Steady

Written by IntaCapital Swiss on March 20, 2025. Posted in News & Reports. Leave a Comment

On Wednesday, 19th March 2025, the Federal Reserve announced they were holding their benchmark interest rates steady at 4.25% – 4.50%. The FOMC (Federal Open Market Committee) voted 8 – 1 in favour of keeping interest rates steady, with the dissenting voice belonging to Christopher J. Waller, who has been a member of the Board of Governors since December 18, 2020. It appears that members are concerned that inflation could remain stubbornly high whilst at the same time the economy could be slowing.

The Chairman of the Federal Reserve, Jerome Powell, confirmed that the significant policy changes attributed to President Trump were the main reason for the Fed’s high degree of uncertainty in regard to the U.S. economy. However, he went on to say that Federal Reserve officials will certainly wait for greater clarity on the impact of President Trump’s policies, before making any definite changes to borrowing costs.

Policymakers still suggest that further interest rate cuts will be necessary, with financial markets pricing in two further cuts, totalling 50 basis points in 2025 and a number of traders suggesting that there is a 62.1% of a further interest rate cut in June this year. Officials further marked down their outlook for inflation and growth and see the economy accelerating by just 1.7% this year, down from 2.1% as advised by their last projection in December 2024.

On the inflation front, Fed policymakers advise that inflation has remained elevated since Donald Trump was elevated to the Presidency and have raised their average estimate for core inflation (does not include food and energy prices) for 2.5% to 2.8% for year end 2025.

They also increased their estimate for the end of 2025 from 4.3% to 4.4%, whilst confirming that consumer confidence had gone south, resulting in softening spending figures.

It is expected that the Federal Reserve’s interest rate decision will incur the wrath of President Trump, who has repeatedly suggested that he should have a role in interest rate decisions. Indeed, he announced to the world in January 2025, at the World Economic Forum in Davos, “With oil prices going down, I’ll demand interest rates drop immediately, and likewise they should be dropping all over the world”.

Experts suggest that in the coming months, President Trump will certainly try and get a firm grip on the Federal Reserve as he will wish to exert his influence on interest rate decisions. Indeed since the inauguration of President Trump on January 20th 2025, the Federal Reserve has held two meetings where the decision was to hold interest rates steady, with the first meeting in January bringing an end to a run of three consecutive interest rate cuts.

In the run up to the presidential election on November 5th 2024, Trump announced he would not fire Jerome Powell, but with two interest rate holds two months into the Presidency we will have to wait and see. However, a President only has the power to appoint a Fed chairman, he cannot fire the chairman unless he has “cause” as per the Federal Reserve Act. In other words, President Trump cannot fire Chairman Powell over policy disagreements, but Trump being Trump he may find a way to get what he wants.

Donald Trump, Tariffs, Gold, U.S. and European Stock Markets, Climate Change and Greenland

Written by IntaCapital Swiss on March 18, 2025. Posted in News & Reports. Leave a Comment

Tariffs

Since Donald Trump officially took office on 20th January 2025, the 47th President of the United States of America has imposed across the board tariffs of 25% on all imports from his two closest trading partners, Canada and Mexico, and increased tariffs on all of China’s exports to the United States to 20%. On 10th February, President Trump also announced a global tariff of 25% on all imports of steel, aluminium and their derivative products, eliciting a response from the President of the European Union who said, “Such tariffs are bad for business, worse for consumers, and would trigger a firm and proportionate European response”.

However, President Trump has since signed an executive order temporarily exempting a significant number of items from tariffs in regard to Mexico. As far as Canada is concerned, Trump threatened a 50% tariff on all aluminium and steel export products to the United States, but backed down when Canada withdrew counter-tariff measures on US-bound electricity and the two parties are now planning new trade talks. In response to US tariffs, China has imposed tariffs of 15% on the importation of US goods such as pork and chicken which began March 10th 2025.

The Europeans have responded to US metal tariffs of 25% with two stage tariffs of their own on US goods totalling circa USD 28 Billion. First, Brussels announced it would from 1st April 2025 reimpose tariffs on such iconic US products such as jeans, Harley-Davidson motorcycles and bourbon, (50% tariff) and second, from mid-April, and subject to agreement from all EU member states, will implement further tariffs of circa USD 18 Billion on other imports from the United States.

The 27 nation members of the EU are determined to send a message to Donald Trump that the European Union is serious about defending their economic interests. The EU has left the door open to Trump saying, “they remain ready to work with the U.S. administration to find a negotiated solution and measures can be reversed at any time should such a solution be found”. The rumour mill suggests that President Trump went ballistic when he was informed of the counter-tariffs by the European Union and said further retaliatory measures on European imports to the U.S. will be imposed for their “nasty” 50% levy on bourbon.

Indeed, President Trump, true to his word, has announced a threatened tariff of 200% (yes 200%) on all wine and champagne imports from member countries of the European Union. The French Foreign Trade Minister said, “We will not give into threats, Donald Trump is escalating a trade war which he chose to unleash”. The pan European/United States transatlantic trade relationship is worth circa USD 1.7 Trillion, but President Trump is still repeating his election-winning rhetoric that there is persistent U.S. trade deficits in goods and tariffs is a way to force businesses to bring industrial investments and jobs back to the United States.

Gold

On 14th March 2025, gold hit an all-time record high of USD 3,004.86 per troy ounce, with commentators and experts suggesting that the above trade wars initiated by Donald Trump has prompted investors to flee into safe haven products such as gold. Indeed, the fear over global growth due to tariffs is such that bullion has been among the best performing assets, rising by 14% from the day Donald was inaugurated on 20th January 2025 and has risen tenfold since 2000, outperforming many big stock indices.

Some experts suggest that there are two drivers pushing gold to these new heights. First, uncertainty pervades the financial markets and appears to be rising thanks mainly to President Trump’s social media comments and his on-going threats and realities of tariffs, plus geopolitical problems in the Middle East and the Ukraine/Russia war. Second, central banks have been buying up gold, perhaps as some analysts suggest they are moving reserves away from the US Dollar. Both of these dynamics have helped drive gold up to its recent record peak with experts saying that they do not see them diminishing in the near future.

A third driver has been the potential for President Trump to slap tariffs on gold imports, which since December has upended the market with massive demand for 1kg gold bars in New York. There is a quirk in the gold market where in London most of the gold trading is in 400 troy ounce bars roughly the size of a brick and weighing about 12.5kg, however in New York the Comex Exchange uses 1kg bars roughly the size of a smartphone.

The possibility of potential levies on gold by Donald Trump has seen more than USD 61 Billion pour into the U.S. market via New York as traders and investors have attempted to avoid tariffs. On a standard trading day gold rarely leaves the vault, but such was the rush to get physical across the ocean the result was a shortage in London, considered the largest gold trading centre in the world. This put smelters in Switzerland under pressure as they had to melt down London’s bricks and transform them into New York’s smartphones before transporting them across the Atlantic.

U.S. and European Stock Markets

Prior to Donal Trump being elected on 5th November 2024, experts confirmed that there was a general consensus among financial analysts and economists that a Trump win would push the dollar higher and be good news for U.S. stock markets. However, such thoughts were built on sand as since Donald Trump’s elevation to the White House on inauguration day on 20th January 2025, stocks in the United States have tanked and the U.S. Dollar has taken a beating moving south against most major currencies.

As mentioned above, there are major uncertainties in the financial markets and companies are still waiting to see what economic damage may be done to the U.S. economy when trading partners throughout the world impose reciprocal tariffs. Trump trade policy, which is generally viewed by the world at large as a rollercoaster and together with the many executive orders has placed downward pressure on business with indicators showing sagging confidence in the consumer sector.

Indeed, analysts advise that under the Trump administration, markets are struggling. Since the inauguration in January 2025, the S&P 500 is down 7.1% and overall the index is down 9.3% lower than the high achieved on 19th February 2025. The Dow Jones index is also down 9% from its December peak. The new administration has spooked investors and as of March 10th 2025, USD 4 Trillion has been wiped out from the S&P 500. Delta Airlines recently announced they were slashing first quarter profit estimates by 50%, citing heightened U.S. economic uncertainty.

Elsewhere and whilst President Trump’s economic policies are sending tremors through Wall Street, such policies are having the opposite effect across the Atlantic ocean. One of Trump’s top foreign policy goals has been achieved, being the increase in defence expenditure by the European Union. Key leaders in Europe have reaffirmed military support for the Ukraine and as such have driven up shares in international military firms giving an upward jolt to stock markets in some of the very countries President Trump has attacked with his trade war.

Indeed, analysts advise that stocks in Europe are seeing their strongest start to 2025, a start not seen since 1990, with the STOXX Europe 600 Index* up 7.7%, the DAX Index** is up 15%, the CAC 40*** is up 9% and in London the FTSE is up 5.6%. The European Commission, which is the executive branch of the EU (European Union), recently announced loans to its 27 members of Euros 150 Billion, plus will loosen fiscal rules for military spending for an additional Euros 650 Billion.

*STOXX Europe 600 – This index is a broad measure of the European Equity Market, consisting of 600 components. It provides extensive and diversified coverage across 17 countries and 11 industries within Europe’s developed economies, representing 90% of the underlying investable market.

**DAX Index – This index measures the performance of Germany’s 40 largest companies that trade on the Frankfurt Stock Exchange and is considered by many analysts as a gauge of Germany’s economic health.

***CAC 40 – This index is the benchmark equity index for public companies traded on the Euronext Paris (the Paris Stock Exchange) and is made up of the largest 40 companies listed in France screened by market capitalisation, trading activity, size of balance sheet and liquidity.

Climate Change

It appears that President Trump has little time if any for climate change as he threatens to rip up the rule book regarding greenhouse gases, and amazingly his administration is looking to reconsider official findings that such gases are harmful to the public. On 12th March 2025, President Trump’s EPA (Environmental Protection Agency) issued 31 announcements with their sights firmly directed towards any rule designed to protect water, clean air, and liveable climatic conditions. Indeed, the EPA has instructed that USD 20 Billion in grants to help the climate crisis be withheld citing potential fraud, a move which democrats feel may well be illegal.

President Trump is well known for calling the climate crisis “a hoax” and is determined to repeal any and all laws regarding climate protection and the ultimate health of all Americans, including those who voted for him in the recent elections. There is a massive body of evidence that rising emissions of greenhouse gases cause devastation and economic costs in the trillion of U.S. Dollars. The current administration will roll back, according to Interior Secretary Doug Burgum, as much as 20% – 30% in order to promote the use of fossil fuels.

Environmentalists are in total uproar over Trump’s attack on climate change and have vowed to fight him tooth and nail through the courts. A previous administrator under President Obama declared “today marks the most disastrous day in EPA history, rolling these rules back is not just a disgrace, it’s a threat to all of us”. Jason Rylander, the Legal Director at the Centre for Biological Diversity Climate Law institute said, “Come hell or high water, raging fires and heatwaves, Trump and his cronies are bent on putting “polluter profits” ahead of people’s lives, we are going to fight it every step of the way”. Analysts suggest that the Donald may find this piece of legislation more difficult to pass than previously anticipated.

Greenland

On 13th March 2025, President Donald Trump met with the Secretary General of NATO, Mark Rutte, where the President appeared to double down on his plans to annex Greenland. Politicians in Greenland have issued a joint statement condemning President Trump, saying his behaviour is unacceptable. The out-going premier, Mute B Egede, wrote on Facebook “Our country will never be the USA and we Greenlanders will never be Americans”.

Experts say that President Trump feels that control over Greenland is essential for national and international security, with experts advising that if Russia were to fire nuclear missiles at the USA, the quickest route would be via the North Pole and Greenland. However, a January 2025 poll of Greenlanders suggest that 85% rejected becoming part of the United States while 6% were in favour, the rest being undecided.

President Trump has a taste for rare minerals especially as China has an advantage in this arena, and it is felt that there are a number of these minerals to the south of Greenland which may have also caught his attention. However, one thing is certain: President Trump does not appear to give much thought to sovereignty, especially with his comments on Canada and actions over the Ukraine but attempts to annex Greenland may be a political step too far in the global geopolitical arena.

Conclusion

Whilst many may react with horror regarding President Trump’s approach to climate change and dismay at his attitude towards sovereignty, he has managed to pull in significant investment into the United States. A number of manufacturers and businesses both in the United States and overseas have, since Donald Trump took office, announced billions of US Dollars in investments.

These companies include such luminaries as Apple, which has pledged a USD 500 Billion investment securing 20,000 jobs, Mercedes Benz has pledged to grow its vehicle production in America, Stellantis has announced it will build their latest Dodge Durango in Michigan, and let’s not forget Saudi Arabia which has pledged a USD 600 Billion to the United States over the next four years.

Finally, it must be remembered that with Donald Trump, it’s not politics that drives him forward, but “the deal”. The deal which will make America great again no matter the geopolitical cost, the political cost at home, or lives lost in the Middle East between Gaza and Israel, and in the war between the Ukraine and Russia. If there is a deal to be had with the United States as the winner, President Trump will pursue that trade to the bitter end. In the election, he won the popular vote as well as electoral vote, so he feels he has the right to govern his way. Is he correct? Only time will tell.

America’s LNG Diplomacy

Written by IntaCapital Swiss on March 12, 2025. Posted in News & Reports. Leave a Comment

Eight years ago, the United States was irrelevant when it came to exporting LNG (Liquified Natural Gas) as it was an exceptionally minor player. Move forward to March 2024, and the United States has become the world’s largest supplier of LNG having ramped up its production, with President Trump expected to increase supply by 60% over the next two years. By the time December 31st, 2030 arrives, experts suggest that one third of all tankers carrying LNG will have originated from the United States. This will, according to some analysts, give President Trump his best chance of fulfilling one of his major campaign promises, that of attaining energy dominance.

Liquified Natural Gas has enabled President Trump to rip up the textbook regarding post World War II alliances because before it would have been nigh on impossible due to America’s massive reliance on imported energy. Today however, the second administration of Donald Trump can rely on this critical global commodity to help him increase his geopolitical leverage on friends (allies but maybe not for long) and foes alike. Experts in the LNG arena point out that currently no matter how much Donald Trump does to upset and alienate his allies, the demand for American-made LNG has not wavered.

LNG was once viewed as a bridging or transitional fuel which would help the world to stop using coal as it moved towards renewable clean energy. However, the movement towards a net zero planet* is somewhat behind schedule and, as such, LNG has endured and has become a global component of energy supply. Indeed, President Biden (very pro renewables and no friend to the oil and gas industry), pushed forward America’s LNG agenda as set forth in the first administration of Donald Trump. Indeed, after the illegal invasion of Ukraine by Russia, the United Kingdom, France, and the Netherlands (previously clients of Russian LNG) became the biggest customers for American made LNG, thus depriving Putin, and his Russian war machine of much needed sales receipts to fund the war effort.

*Net Zero – is a globally agreed target of completely negating the amount of greenhouse gases produced by human activity using fossil fuels. To obtain a net zero state requires the removal of all emission of greenhouse gases and moving from fossil fuels (e.g., carbon dioxide, methane, nitrous oxide, and water vapour), to renewable sustainable energy sources. NB LNG is considered a fossil fuel and is simply gas cooled down to a natural state for easier transportation. However, when burned, LNG produces less greenhouse gas than other fossil fuels such as coal.

The President of the European Union praised President Biden’s LNG policy and for being a reliable partner with the European Union and suggested that the relationship between Europe and the United States was stronger than ever. Such words however are not expected to be heard from the lips of Ursula von der Leyen for many years to come. Indeed, many commentators suggest that as President Trump does not have to worry about imported energy, he is in fact dealing from a position of power when negotiating for peace in Europe, the Middle East, or threatening countries with very large tariffs.

Many parts of the world are a magnet for LNG and the export market can produce higher prices than the domestic market. Asia for example needs fuel to satisfy their growing economies, Europe needs fuel to replace exports from Russia and thanks to AI (Artificial Intelligence), most of the developed world needs power to satisfy the increasing number of data centres. It appears that Donald Trump has the whip hand for now, but what goes round comes round, and whatever happens, markets could be in for quite a bumpy ride in the next few years.

Investors Pile Into Ultra-Short Term Bonds ETFs

Written by IntaCapital Swiss on March 12, 2025. Posted in News & Reports. Leave a Comment

Currently, President Trump’s economic policies are fanning the flames of concerns regarding a recession and a sell-off in the stock markets, and investors are pumping money into Ultra-Short Term Bonds ETFs*. Led by products such as the iShares 0 – 3 Month Treasury ETF, this sector has received in excess of USD 16 Billion since January 1st 2025 with iShares 0-3 Month Treasury accounting for circa USD 7 Billion. Last week March 3rd – March 8th 2025, data reveals that the iShares ETF received USD 1.4 Billion recording the largest inflow of funds to date.

*Ultra-Short Term Bonds – These are bond funds that invest only in fixed income instruments with very short-term maturities. Such instruments will have maturities of less than one year and are usually defined as government or corporate bonds, CDs (Certificates of Deposits), commercial paper, and money market funds.

*Ultra-Short Term Bonds ETFs (Exchange Traded Funds) – These funds are designed for investors who are focused on reserving assets but would also like to earn income. Utilising short-term investment grade corporate, bonds, government bonds and money market instruments, these ETFs aim to best returns on cash and your typical money market funds without incurring substantially more risk.

Data provided by experts show that lay-offs in the US federal workforce, softening economic data and President Trump’s on-again, off-again tariff war on the allies and top trading partners of the United States has fuelled a sell-off in the stock market. Indeed, since election day of November 5th 2024, President Trump and the rest of the financial markets has seen all the gains since that day on the S&P 500 Index completely wiped out. Furthermore, economic models provided by a number of investment banks and other such luminaries, suggest that the risk of a recession in the US economy is on the up.

During times of volatility and turbulence in stock markets those ETFs with short-dated maturities tend to receive an accelerated amount of incoming funds. Data received shows that from 2013 during downturn months in the S&P 500, flows into the above-mentioned funds were circa USD 2.7 Billion, and during the up-turn months funds received were circa USD 440 Million.

Elsewhere in the week through March 5th 2025, Global Money Market Funds witnessed a huge inflow of funds, and data provided by LSEG Lipper* showed the amount received as USD 61.32 Billion, with a net inflow of USD 39.55 Billion the week before. Many commentators and experts attribute this inflow to President Trump escalating his trade war by imposing steeper tariffs on imports from China, Mexico, and Canada.

*LSEG Lipper – provides global independent fund performance data, in a precise granular fund classification system, and includes mutual funds, CEFS (Closed-End Funds), ETFs, hedge funds, domestic retirement funds, pension funds, and insurance products.

Experts have suggested that President Trump has put the strength of the economy on the backburner while he pursues his political goals and agendas. This could turn out to be a massive mistake as more and more analysts, experts, and economists, suggest that his somewhat outdated “America First” platform is knocking confidence and weighing on confidence. Indeed, an increasing number of economists had revised downwards their growth predictions with warnings that Trumpenomics and his trade wars are proving more damaging to the US economy than first anticipated.

Furthermore, the R word is beginning to be used more and more with many feeling that a recession could soon be appearing on the horizon. Furthermore, when asked that very question on Sunday 9th March 2025, President Trump declined to rule out the possibility that the US Economy could indeed fall into recession.

Major US Investment Banks are Recalibrating and Pulling Back from China

Written by IntaCapital Swiss on February 27, 2025. Posted in Industry, News & Reports. Leave a Comment

Once upon a time China was regarded as one of the major centres for the expansion of investment banking, with many of these banks viewing China as one of the crown jewels within their portfolios. Today, with the United States applying more tariffs and restrictions on the country, the China economy is reeling from huge losses in the property sector; the economy which conservatively speaking has been sluggish, has put the brakes on deal flows. As a result, many global investment banks are rethinking their “China Strategy” and pulling back from the USD67 Trillion financial services market.

A number of analysts confirm that back in December 2024 a number of US Investment Banks conferred with the US Treasury regarding the rules and regulations as to how their clients may comply with investing in China. It is understood that many of these executives left the meeting with less understanding of the situation and many with more questions than answers. Experts suggest the bankers needed to understand the rules and guidelines concerning investing in those Chinese companies by their clients, which pose potential national security risks. Furthermore, which reporting requirements were needed and which deals would now qualify under the new rules.

So as these institutions pull back from China, the recipients of their largesse seem to be according to experts, Japan and India who are not filling the large investment hole that leaving China has produced. Indeed, many of these international investment houses and banks have reduced staff or as some analysts put it “pared to the bone” to levels that just meet the minimum staffing requirements by the Chinese financial regulators allowing these companies to operate in their jurisdiction. Despite numerous financial stimuli, many bank bosses are sceptical that there will be any decent improvement in China’s economic prospects.

Some experts point to November 2020 as the point where global confidence in China began to decrease. In that month, the Ant Group controlled by Jack Ma were just about to issue their IPO (Initial Public Offering), which at the time would have been the world’s largest, in the amount of USD35 Billion in Shanghai and Hong Kong. However, instead of marking what would have been a high point in China’s booming business sector, the Chinese authorities pulled the IPO at the last minute. Experts confirmed this action by the Chinese authorities marked the start of China’s war on private companies/enterprise, and the beginning of declining global confidence in China which also sabotaged Hong Kong’s standing as a major funding centre for Chinese companies.

Interestingly, analysts advise that some Wall Street banks consider China a long-term bet with one senior banker suggesting that there could be double digit growth in 2025, but experts suggest that his peers disagree, and China may take years to achieve this figure. However, let’s not forget Hong Kong where many US banks have successfully made significant profits from Greater China, which has historically accounted for a significant share of any earnings. Last week February 10^th – 14^th 2025 bankers were encouraged by a rebound in Chinese Stocks in Hong Kong (they hit a three year high), this on the back of China participating and maybe becoming a major player in the AI artificial intelligence sector.

However, all eyes are on the US administration and whether or not they will increase tariffs on imports from China having already levied a 10% charge and what will be China’s reaction and the overspill into their already problematic economy. Elsewhere on the tariff front, the recent bombshell of more tariffs announced on Tuesday 18^th February 2025 by Donald Trump where he intends to impose levies of 25% on the importation of auto parts, semiconductors, and pharmaceuticals as early as 2^nd April 2025. President Trump did not specify what countries he had in mind, but currently Germany seems to be on the cards.

The big question is will the president hold true to his pre-election promises or will he, like Canada and Mexico, use tariffs as a club to beat countries into agreeing to other demands. However, he has promised tariffs to put “America First” so whatever happens, 2025 may see an all-out trade war with the world and especially consumers are in for a fairly bumpy ride.

Trump Tariff Update February 2025

Written by IntaCapital Swiss on February 10, 2025. Posted in News & Reports. Leave a Comment

On Sunday 11^th February 2025, President Trump, whilst aboard Airforce One, announced to reporters that he would be applying tariffs of 25% on ALL imports of aluminium and steel widening the spread of tariffs to some of the United States’ top trading partners. Such partners include Canada and Mexico with whom he announced a moratorium on tariffs for one month, however the President did not specify when these new import duties will take effect.

President Trump, keeping to his word and pre-election promises also stated that the week starting 10^th February 2025 he would announce penalty or reciprocal tariffs on those countries that currently tax/tariff imports from the United States. He went on to say that once these reciprocal import duties had been announced such actions would be implemented almost immediately.

However, financial markets (that have recently been rattled by an unpredictable President regarding tariffs), where he has announced tariffs on both Mexico and Canada then he put them on hold, whilst at the same time carried out his threat of 10% import duties on all imports from China, who’s retaliatory tariffs come into effect today 10^th February. However, these current import levies are in part to help protect those domestic industries without whose help, President Trump may not have won those essential battleground states being fought over in last year’s presidential election.

According to experts in the ferrous arena, the United States has a vast demand for aluminium and in 2023 net imports were above 80% from countries such as Mexico, Canada, and the UAE (United Arab Emirates). Steel imports, whilst smaller in consumption to that of aluminium, are vital for areas manufacturing, aerospace, and in both green/renewable energy sectors and the fossil fuel sectors. During President Donald Trump’s first term some oil companies won exclusion from tariffs, so it will be interesting to see if such concessions are awarded in the second presidency.

Such announcements have put the executive arm for trading for the European Union on red alert, but they have announced that they will wait on further details before responding to the threat of these new tariffs. However, a spokesperson did go on to say that “the imposition of these new duties would be unlawful and economically counterproductive”. Elsewhere in Asia, South Korea which exports both steel and aluminium to the United States are already expediting searches for new markets, especially as by value the USA is the largest destination their of steel exports.

Some analysts have pointed out that due to high costs steel mills in the United States are already running at less than full capacity due to high costs, and now they would have to either whirr up production to compensate for lower imports putting prices up to their customers. President Trump has put tariffs front and centre in his bid to rebuild the US economy, but how many of these tariffs will be used as just a threat for him to get his own way in other areas?.

European Union Looking to Avoid a Trade War with the United States

Written by IntaCapital Swiss on February 5, 2025. Posted in News & Reports. Leave a Comment

Ever since Donald Trump was re-elected to the White House on Monday 20^th January 2025, the European Union has been preparing counter measures to the new president’s tariffs, which would mark the beginning of a trade war with the United States. However, with President Trump pulling his tariffs at the last minute with both Canada and Mexico*, the EU has become emboldened and feel that they can come to a negotiated agreement with the Trump administration regarding tariffs.

*Canada and Mexico – Tariffs of 25% on goods from both counties were due to begin on Tuesday 4^th February 2025, but after conversations between Donald Trump and the President of Mexico Claudia Sheinbaum followed by a conversation with the Prime Minister of Canada Justin Trudeau, President Trump delayed tariffs for one month. Both the leaders of Canada and Mexico agreed to up the ante in fighting migration and the flow of fentanyl into the United States, key demands by the US administration to avoid tariffs.

However, there is, according to person(s) close to the EU’s executive arm in charge of trading, a major stumbling block with the EU’s strategy as they have been unable to establish decent contacts within the new administration, with some key posts still awaiting senate confirmation. Furthermore in March, the exports of steel and aluminium will be discussed, and the EU will look to avoid conflict on this matter which has been brewing for some time. The Eu will also wish to get agreements with the new administration and avoid tariffs, especially as recent increased rhetoric from President Trump aimed directly at the European Union said that due to large trade deficits with the eurozone means that tariffs are definitely on their way.

In view of President Trump’s remarks the President of the European Union Ursula von der Leyen said” When targeted unfairly and arbitrarily, the European Union will respond firmly”. However, what the EU has to take into account is that the angst that President Trump has towards the bloc goes back a long way, so getting agreements on tariffs may prove a lot more difficult.

Furthermore, Germany’s Chancellor Olaf Scholz is currently making a habit of dissing President Trump, plus his pre-election remarks making it quite clear he was voting for Kamala Harris for the White House, will not exactly endear himself to the new president. Germany will also be in President Trump’s crosshairs as they have a massive trade surplus with the USA of in excess of USD 63.3 Billion as of close of business 2023.

Experts are suggesting that if indeed President Trump announces tariffs on the European Union the response may initially be muted along the lines of the Chinese who announced retaliatory tariffs on imports of US oil and Energy among other levies, but which amounted to less than USD 5 Billion. The word on the street is that the EU may feel that President Trump is using tariffs as a diplomatic club or hammer to get his own way on his policies (e.g. Canada and Mexico).

The EU may well have to increase their Defence/NATO spending, an ongoing demand from President Trump, and make concessions regarding the Russia/Ukraine war. No doubt policymakers are well aware of these demands and only time will tell if indeed the USA and the European Union can come to an agreement on tariffs, but with the bloc suffering from a deepening economic and political malaise, President Trump may well hold the winning hand. It must be remembered that at the recent World Economic Forum in Davos the President of the United States was quoted as saying “the EU treats us very very unfairly, very badly”, so Europe has been forewarned.

Trade Tariffs 2025 – Trump Lives up to his Election Promises, However…….

Written by IntaCapital Swiss on February 4, 2025. Posted in News & Reports, Uncategorized. Leave a Comment

On Saturday February 1^st, 2025, President Donald Trump announced sweeping tariffs on imports of goods from China, Mexico, and Canada, with China being hit with 10% above current tariffs and Mexico and Canada being hit with 25% tariffs. Some experts warned that such moves by the US administration could see the start of a trade war that could reignite inflation and negatively impact global growth. The president of the NFTC (National Foreign Trade Council) said that this move “threatened to raise the cost of everything from avocado’s to automobiles” and he hoped a resolution between America, Canada, and Mexico, could be quickly found.

Donald Trump signed three executive orders imposing said tariffs with a starting date of Tuesday 4^th February 2025. The announcement and subsequent executive orders made good on President Trump’s promises during the election campaign despite repeated warnings from renown economists and analysts who advised that a trade war with Mexico and Canada (USA’s top trade partners) would erode growth both globally and in the United States with the result being increased prices for both companies and consumers.

However, before Monday the 3^rdof February ticked round President Trump had already dialled back his plans for tariffs to start on Tuesday 4^th February 2025, having announced a month’s respite for Mexico. President Trump confirmed that during a telephone call with the President of Mexico Claudia Sheinbaum, she confirmed that she would send 10,000 troops to the border to help combat illegal immigration and the flow on fentanyl, which is a key Trump demand to avoid tariffs.

Similarly, on Monday 3^rd February 2025, the Prime Minister of Canada Justin Trudeau announced that President Trump had abandoned the February 4th deadline for tariffs, and like Mexico had agreed to a one month delay providing he took tougher measures to combat drug trafficking and illegal migration across their shared border. The concessions President Trump received from Prime minister Trudeau is the appointment of a new Fentanyl Czar, listing cartels as terrorists and in a joint venture with the United States, create a new strike force that will combat money laundering, organised crime, and drug trafficking.

In the meantime, China’s response to President Trump’s imposition of tariffs, has been to introduce their own tariffs on a number of US goods and targeting a small number of US companies. On Tuesday 4^th February 2025, China announced an imposition of a 15% levy (under USD5 Billion) on imports of US energy and a 10% levy on US oil and agricultural equipment. The Chinese government also targeted PVH Corp (owner of Tommy Hilfiger, Calvin Klein, Olga and True) and Illumina Inc (a gene sequencing company) putting them on a blacklist.

The Chinese government also imposed stricter controls on the exports of critical metals such as tungsten, used in defence, aviation, and electronic industries. Experts suggest that this is a muted response designed to avoid an all out trade war, but enough to show President Trump that China can hit America where it hurts. The American President wishes to speak to President Xi before their tariffs and export controls take effect on 10^th February 2025, perhaps another reason why China held back on an all-out response.

Elsewhere, President Trump suggested that the eurozone (European Union) could be next in line for tariffs and could happen “pretty soon”. He went on to say that “they don’t take our farm products, they don’t take our cars, they take almost nothing, and we take everything from them. Millions of cars, tremendous amounts of food and farm products”. The European Union initially condemned President Trump for initiating tariffs and advised they will respond in kind if they become a target.

Conclusion

Throughout President Trump’s election campaign the slogan has been “America First”, “Tariffs”, he even said tariffs is his favourite word. Before Donald Trump became President and after he became President he trumpeted tariffs, tariffs, tariffs. We shall bring factories back to America, create more jobs, lower taxes for everyone are the words that have been put forth to the American people. However, is President Trump using tariffs as a diplomatic club to get his way in other areas such as with Mexico and Canada. We shall see what will happen with the United Kingdom and the European Union, but for those American voters waiting on tariffs, they could be sorely disappointed.

Federal Reserve Holds Interest Rates Steady January 2025

Written by IntaCapital Swiss on February 3, 2025. Posted in News & Reports. Leave a Comment

On Wednesday 29^th January 2025, the Federal Reserve announced that after lowering interest rates by 100 basis points in the last few months of 2024, they were holding interest rates steady in a range of 4.25% – 4.50%. The FOMC (Federal Open Market Committee) had no dissenting voters as they agreed unanimously to press the hold button on interest rates. The Chairman of the Federal Reserve said “We do not need to be in a hurry to adjust our policy stance” adding that the Federal Reserve was pausing interest rates in order to see further progress on inflation which currently remains somewhat elevated but has moved closer to the goal of 2%.

Currently some analysts are saying that the US economic landscape appears stable but at the same time wildly uncertain especially as recent macroeconomic fundamentals have been unchanged and healthy. However, with the elevation of Donald Trump to the White House Chairman Powell noted “Federal Officials are waiting to see what policies are enacted” and what effect such policies (tariffs, taxes, immigration) will have on inflation. Experts have said that the prospects of tariffs on Mexico and Canada, who are two key trading partners with the United States, have cast a shadow over the economy of the United States.

Following the announcement that the Federal Reserve were holding interest rates, President Donald Trump renewed his attack on the central bank saying they had “failed to stop the problem they created with inflation”. Previously, President Trump had demanded that interest rates come down further, but Chairman Powell, who is doing his best to keep himself and the Federal Reserve above political machinations noted that keeping interest rates on hold was not political despite the fact it may look that way. The president also went on to say that the Federal Reserve has “done a terrible job on bank regulation” and insisted he will put this responsibility solely within the purview of the Treasury Department. However, some legal experts have said that this would be against the law.

In December 2024 Federal Officials advised that they expected only two rate cuts throughout the whole of 2025, which was a reduction in policy that had not been previously anticipated by the financial markets. Recent data released showed that in December 2024, an underlying measure of consumer prices rose by less than anticipated being the first decrease since June 2024. Analysts have looked back at President Trump’s first stint in the White House where he promised more tariffs on countries exporting to America, taxes on workers and companies will come down, and a massive number of jobs and factories will come home. In the end the exact opposite happened, and the Federal Reserve faced a slowing economy led by factories announcing many redundancies. So perhaps Chairman Powell and his officials can feel somewhat vindicated by keeping rates on hold.

Tag: United States