President Trump Announces Tariffs on Canada, Mexico and China and the World Holds Its Breath

Economic

Summary:

Late on 1 February, President Trump signed three executive orders, announcing new tariffs on Canada, Mexico, and China. The tariffs include 25% on imports from Canada and Mexico, and 10% on imports from China. Energy products from Canada, crucial for US crude oil imports, are also affected, but 'only' by a 10% tariff.

Trump imposes new tariffs on Canada, Mexico, and China

Even though media reports in the last few days indicated that Trump would implement the tariffs this time, there was still uncertainty until the official announcement. On 1 February, President Trump followed through and declared a national emergency, using the powers granted by the International Emergency Economic Powers Act (IEEPA) to impose these additional tariffs for the first time since the law came into effect in 1977. After threatening to invoke IEEPA several times, such as against Mexico in 2019, Trump had to deliver on his threats, otherwise risking them being perceived as empty and ineffective.

What about the timing?

The new tariffs are set to come into effect at 12:01 a.m. Eastern Standard Time on 4 February 2025. This leaves a minimal negotiation period before the tariffs are enforced and gives the US authorities the opportunity to comply with the new regulations and also adhere to the legal requirements, such as the publication of the executive orders in the Federal Register. However, the timeline for fitting everything into the legal framework seems quite tight, which could lead to chaos unfolding at the border in the coming days.

However, since President Trump has not specified his exact demands from Canada, Mexico, and China regarding the fentanyl crisis, reaching an agreement before the deadline seems more challenging than during his first administration.

Retaliation is on: Canada, Mexico, and China respond to US tariffs

Following the announcement, Canada and Mexico declared their intentions to retaliate against the tariffs, while China pledged to challenge them legally at the WTO. Although all three countries would prefer negotiations over retaliatory measures, their respective governments stated that the US stance necessitates a firm response, with Canada already having its masterplan ready.

Canada: On Tuesday, 4 February, US imports entering Canada will face tariffs of 25% on goods worth $20 billion (C$30 billion). Then, in 21 days, additional tariffs for goods worth $86 billion (C$125 billion) will come into effect, including beverages such as beer, wine and bourbon, agricultural products such as fruits and orange juices, as well as clothing, or household appliances. In a public statement, Canadian prime minister Justin Trudeau also called upon Canadian citizens to ‘buy Canadian’.

Mexico: Mexico’s government stated that they would prepare similar tariffs on US goods, although a detailed list has not been published yet. Mexican President Claudia Sheinbaum instructed her economy minister to apply tariff and non-tariff measures in defence, potentially ranging from 5% to 20%, on agricultural products as well as manufactured steel and aluminium, according to media sources.

China: Next to China filing a complaint with the World Trade Organization, which often takes over a year though, China's commerce ministry announced that it would take unspecified countermeasures. But unlike Mexico and Canada, no immediate tariffs were announced, although this might be due to the fact that some policymakers could still be on holiday during the Chinese New Year break.

Seeing that the tariff hike is with an additional 10%, which is relatively small – don’t forget that tariffs against Chinese goods entering the US have been in place for the last 7 years – we expect that the initial retaliation from China's side is likely to be mild. Despite the tough talk, we are still of the opinion that the fentanyl issue is one where China and the US could find it relatively easier to find room for cooperation, so this will be an important early barometer on how relations will develop. We do feel that if pushed into a corner, China's retaliation could be stronger than what most expect, but at this stage we haven't reached that point yet. Overall, the path to avoid a more destructive US-China trade war is a narrow one.

Potential economic impact

With more than 15% of all US imports coming from Mexico, 13.7% from Canada, and 13.9% from China in 2023, almost half of everything the US imports will be affected by higher tariffs, potentially disrupting supply chains and impacting the US, Canadian, and Mexican economies significantly. Industries like automotive and manufacturing, which are deeply integrated with US supply chains, will face increased costs and disruptions, since many parts cross the border multiple times before becoming final product. The total output of US manufacturing was $2.85 trillion in 2023 according to the GDP figures – less than the $3.1 trillion of goods imports that year. As such the US manufacturing sector would need to more than double in size to allow full substitution and that is unfeasible in the near term.

Additionally, agricultural products, food and beverages, and wood could see significant price hikes this year.

President Trump Announces Tariffs on Canada, Mexico and China and the World Holds Its Breath_1

In the short term, the additional tariffs may slightly boost spending as awareness spreads and consumers accelerate purchases to avoid the tariffs. However, the squeeze on household incomes, particularly for lower-income families, will become noticeable in the following months as we’ve discussed in length here. While price increases for non-perishable foods such as cucumbers, lettuce, or meat might be felt almost immediately, the impact on durable goods may be delayed.

For example, in 2018, it took about three months for washing machine prices to rise as retailers depleted their pre-tariff inventory. Subsequently, consumer prices for laundry equipment increased by 12%, leaving consumers to bear the brunt of the tariff hikes. Additionally, domestic manufacturers raised their prices, further impacting consumers, until supply chain adjustments and increased competition eventually lowered prices again.

Furthermore, with the announced retaliations, American exporters will get hurt, particularly in industries like agriculture and manufacturing. 17% of US goods exports go to Canada, 16% go to Mexico and 7% go to China. When the US imposed tariffs on Chinese goods during Trump’s first term, China responded with tariffs on American agricultural products, such as soybeans and pork, hurting American farmers and leading to reduced sales and financial strain. To offset lost US sales to China from the trade war, the US administration had to step in with generous subsidies.

As regards China, we are expecting a very modest impact on China's growth from this initial move. In 2024, China saw exports to the US grow by 4.9% YoY to $524bn and China’s trade surplus with the US totalled $360bn, with this data benefiting from some front loading of exports toward the end of the year. Another 10% tariff will further squeeze low margin exports to the US and likely will price out a portion of exports. The more vulnerable sectors will likely be those with easy replacements, such as textiles and certain electronics and machinery goods. However, given tariffs have been in place for the last 7 years, many of the more price sensitive and easily replaceable exports have already been redirected – many of the direct exports remaining often do not have an easy substitute. Given Mexico's tariffs were hiked by 25%, this will also impact one of China's main export rerouting channels. We could see exports redirected toward other countries with ASEAN and Latin American countries as likely targets if the tariffs to Mexico hold, or worse, see further escalation. China is likely to focus on boosting trade ties with other countries to help offset a more protectionist US.

What does this mean for Europe?

The European Union has not (yet) been subject of the US administration’s tariff announcements. However, President Donald Trump has regularly publicly criticised the EU for running trade surpluses with the US. In fact, looking at the US bilateral trade balances, the country runs the third largest bilateral trade deficit with Germany, after China and Mexico. Given the swiftness with which the Trump administration implements election promises, it is hard to see how the EU could escape the tariff dance. In fact, Donald Trump already initiated a comprehensive investigation into US trade relationships. A report of this investigation is due on 1 April 2025. A crucial moment for the EU.

However, it won’t take until April before the EU would feel the economic pain of US tariffs. Given that many European (car) manufacturers have production facilities for the US market in Mexico, as part of the near-shoring and derisking strategy of the last four years, US tariffs on Mexico will also harm Europe.

There is little known how the EU would react to US tariffs on European goods. During the last Trump administration, the EU first reacted with direct retaliation on US tariffs on European aluminium and steel and was later able to prevent a tariff escalation by threatening to impose tariffs on Levi’s jeans and Jack Daniels. Also, the EU promised the US administration to purchase more US LNG and soybeans. A similar strategy looks possible this time around. The EU could, for example, offer to buy more US LNG or military equipment. However, the overarching question remains how transactional president Trump’s approach to tariffs in his second term in office will really be.

Trade war is a lose-lose situation

The US administration’s first move on tariffs does not only stress the determination to use tariffs as a main instrument in foreign policy but it also marks a complete overhaul of trade as we know it, clearly breaching existing trade agreements like the United States-Mexico-Canada Agreement (USMCA) and World Trade Organization (WTO) rules. If really implemented, the announced tariffs are of a very different nature than the tariffs during Trump’s first term in office. Targeting three of the US most important trading partners, with the fourth to follow soon, at the same time is a very different beast. If Mexico, Canada and China push through with the announced retaliation, the global economy would see an unprecedented escalation of trade tensions. During Trump’s first term in office, tariffs and trade tensions brought attention to the more general topic of the advantages but also disadvantages of globalisation. Globalisation has not only seen winners but also losers. This time around, it is hard to see how an escalation of trade tensions can do any good, to anyone. At least over the longer run. Economically speaking, escalating trade tensions are a lose-lose situation for all countries involved.

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Adam

Economic

Political

China’s Initial Reaction: Cautious but Firm

Following President Donald Trump’s announcement of a 10% tariff on all Chinese imports, China swiftly responded despite being in the middle of its Lunar New Year holiday. The Ministry of Commerce condemned the move, stating that the tariffs "seriously violate WTO rules" and vowed to take "appropriate countermeasures." While Beijing has yet to specify its full response, it confirmed plans to file a formal complaint with the World Trade Organization (WTO) and warned of retaliatory actions.

Compared to Canada and Mexico, which immediately imposed counter-tariffs on U.S. goods, China’s response has been measured, reflecting a strategic approach rather than immediate escalation. Notably, Trump’s 10% tariff on Chinese goods is significantly lower than the 25% imposed on Mexico and most Canadian imports, which may have influenced Beijing’s reaction.

U.S.-China Relations Under Trump’s Second Term: A New Phase?

Trump’s latest move comes amid a complex phase in U.S.-China relations. China appeared to have had a better-than-expected start in dealing with Trump’s second administration. The Chinese government took early steps to maintain diplomatic ties, including sending Vice President Han Zheng to Trump’s inauguration. Furthermore, a phone call between Trump and Chinese President Xi Jinping was described by the U.S. leader as "very good," suggesting potential room for negotiation.

However, Trump has consistently framed his trade stance as a “fight to win against China”, appointing China hawks to key policy positions. Given his campaign rhetoric, Beijing likely understands that tensions may escalate but appears to be adopting a wait-and-see approach before taking more aggressive steps.

Is There Still Room for Negotiation?

The 10% tariff rate is notably lower than the 60% figure Trump floated during his campaign, indicating that Washington is leaving space for future adjustments or negotiations. Instead of focusing on trade imbalances, Trump’s administration has tied the tariffs to China’s alleged role in fentanyl trafficking, creating a non-traditional economic justification for the measures.

Some analysts believe Trump is holding back stronger tariff measures while awaiting the results of a broader investigation into U.S.-China trade practices. This review, ordered through an executive action signed on Trump’s first day back in office, is expected to conclude by April 1. Depending on its findings, Washington could expand or adjust tariffs, putting more pressure on Beijing to make concessions.

How Will China Retaliate?

For now, China’s leadership has struck a conciliatory tone, with Vice Premier Ding Xuexiang emphasizing Beijing’s commitment to "balanced trade" at the World Economic Forum in Davos. Xi Jinping has also called for a "new beginning" in U.S.-China relations, signaling that Beijing may prefer diplomatic solutions before escalating economic countermeasures.

China’s WTO complaint serves as a symbolic move to position itself as a defender of global trade rules, contrasting with Trump’s administration, which Beijing accuses of violating international norms. Additionally, Chinese officials have dismissed Washington’s fentanyl accusations, arguing that the U.S. opioid crisis is "America’s domestic issue."

Despite these restrained statements, many experts anticipate China will unveil further retaliatory measures in the coming days. State-run media outlets, including China Central Television (CCTV), have already criticized Trump’s policies as “misguided”, with editorials warning of potential economic consequences for U.S. industries.

China’s Strategic Considerations: Retaliation vs. Long-Term Stability

Economists suggest that the 10% tariff does not pose an immediate threat to China’s economy, especially when compared to the full-scale trade war of 2018, when Trump imposed tariffs on hundreds of billions of dollars in Chinese goods. During that period, Beijing retaliated with $185 billion in tariffs on U.S. exports, severely disrupting global supply chains.

Since then, China has been strategically reducing its dependence on the U.S. market. In 2024, Chinese exports to the U.S. accounted for less than 15% of its total exports, and trade with America contributed only about 3% to China’s GDP. Beijing has actively diversified its economic partnerships, particularly with Southeast Asia, Africa, and Europe, reducing the overall impact of U.S. economic actions.

In contrast to Biden’s administration, which maintained Trump-era tariffs while restricting China’s access to advanced technologies, Trump’s tariff-driven approach appears to focus more on economic pressure than technological decoupling. This shift might provide China with more flexibility in how it counters U.S. actions.

The Long-Term Outlook: Is a Trade Truce Possible?

Keyu Jin, an economics professor at the London School of Economics, believes that China has been preparing for years to minimize U.S. economic leverage. She notes that China’s trade diversification efforts and growing self-reliance in key sectors indicate that Beijing is in a stronger negotiating position than in 2018.

Despite tensions, she also argues that Trump is seen as someone China can negotiate with, unlike other U.S. politicians who favor indefinite economic restrictions on China. If Washington signals openness to a deal, Beijing may be willing to negotiate rather than escalate further.

In the coming weeks, analysts will closely watch whether China escalates its response or opts for a strategic waiting game, banking on potential diplomatic openings with Washington. While the risk of another full-scale trade war remains, both sides may seek off-ramps to avoid severe economic fallout.

Source: CNN

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Warren Takunda

Stocks

London stocks nudged higher in early trade on Wednesday as investors mulled disappointing US tech results and continued to assess the impact of Trump’s trade war.

At 0830 GMT, the FTSE 100 was up 0.1% at 8,577.75.

Kathleen Brooks, research director at XTB, said: "Risk appetite continues to dwindle this week and European shares have opened lower, although the FTSE 100 is eking out a gain. There is too much uncertainty which is eroding the foundations of a broad-based stock market rally as we move through February. The two big themes driving markets right now are earnings reports and the threat of tariffs, which are tricky for investors to navigate.

"As we mentioned on Tuesday, the majority of companies on the S&P 500 that have reported earnings, have beaten estimates, and the market is rewarding stocks who do beat earnings estimates by a higher margin than average. This also means that the opposite is true. Companies are getting punished if their earnings disappoint. This is why Alphabet is expected to open significantly lower on Wednesday, and chip maker AMD could follow suit.

"Alphabet reported Q4 revenues of $81.6bn, which was lower than the $82.8bn expected. The company boosted its capex spend by more than expected, capex will be $75bn in 2025, vs expectations of $57.9bn. This is a significant increase, and it shows that Alphabet is throwing the kitchen sink at its AI plans."

In UK equity markets, pharma giant GSK surged to the top of the FTSE 100 as it missed forecasts slightly with its annual results, but raised its guidance for long-term growth and announced plans to buy back £2bn of stock over the next 18 months.

Sales in 2024 increased by 3% to £31.38bn, slightly short of the £32bn expected by analysts, while core earnings per share rose 3% to 159.3p, missing the 163.9p consensus estimate.

However, due to progress in its late-stage drug pipeline, GSK upped its 2031 sales outlook to more than £40bn, from £38bn previously.

Private housing provider Grainger was in the black as it said net rental income rose 15% year-on-year in the four months to the end of January 2025, driven by strong demand and portfolio growth.

Housebuilder Crest Nicholson was boosted by an upgrade to ‘buy’ at Investec.

On the downside, Ferrexpo slid again, having tumbled late on Tuesday after it said a civil claim worth 157 billion Ukrainian hryvnia (£3bn) had been filed against its Ukrainian unit Ferrexpo Poltava Mining (FPM) in relation to the alleged sale of waste products from the production of iron ore pellets.

Sales, marketing and support services group DDC lost ground as it said operating profit in its technology segment declined in the third quarter due to a weak market for consumer technology products in the UK and Europe over the holiday season.

Spirax was also on the back foot after a downgrade to ‘hold’ at HSBC.

Source: Sharecast

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Cohen

Cryptocurrency

In mid-morning trade in Asia, Brent crude was trading at $75.80 per barrel with West Texas Intermediate at $72.40 per barrel.

Prices had spiked on Tuesday temporarily following the maximum pressure news but later retreated after China said it would impose retaliatory tariffs on U.S. energy imports, including a 10% tariff on crude oil imports.

The U.S. president said on Tuesday that he would once again seek to reduce Iranian oil exports to zero in a bid to prevent Tehran from developing its own nuclear weapon. “With me, it's very simple: Iran cannot have a nuclear weapon,” Trump said ahead of a joint press conference with Israeli Prime Minister Benjamin Netanyahu—the first foreign head of state to visit with Trump after his inauguration.

It was at this press conference that Trump broke the news that he wants the United States to take over the Gaza Strip and develop it economically after the resettlement of all Palestinians from the area.

“The U.S. will take over the Gaza Strip, and we will do a job with it, too,” Trump said Tuesday evening during a joint press conference with Israeli Prime Minister Benjamin Netanyahu. “We'll own it and be responsible for dismantling all of the dangerous, unexplored bombs and other weapons on the site,” Trump said as quoted by Fox News.

“Level the site and get rid of the destroyed buildings, level it out, create an economic development that will supply unlimited numbers of jobs and housing for the people of the area,” the U.S. president continued. “Do a real job. Do something different. Just can't go back. If you go back, it's going to end up the same way it has for 100 years.”

Source: OILPRICE

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Justin

Economic

Forex

Nominal cash earnings for workers climbed 4.8% in December from a year earlier, up from a revised 3.9% gain in November, the labour ministry said Wednesday. The reading exceeded economists’ consensus forecast and marked the largest jump since 1997. The strong gain was driven by a jump in bonuses.

The yen strengthened as much as 0.8% to 153.17 versus the dollar, leading gains among Group-of-10 currencies. Yields on Japanese government debt rose.

“Bonds were sold off heavily due to the wage data, as the market is speculating that the BOJ rate hikes will continue or be brought forward,” said Naoya Hasegawa, chief bond strategist at Okasan Securities.

In another positive development for pay, real wages grew for a second consecutive month in December. Economists had expected real wages to fall amid accelerating inflation. Overall inflation in the country has been above 2% for nearly three years, hitting 3.6% in December.

Wage trends continue to face market scrutiny even after the BOJ’s latest decision to raise borrowing costs, as they could influence the timeline of future rate hikes. Last month the central bank implemented its third rate increase in less than a year, after evaluating wage growth and the initial market reaction to Donald Trump’s return to the White House.

“Wage trends will of course remain a key indicator for the BOJ’s policy decisions,” said Masato Koike, senior economist at Sompo Institute Plus. “The trend so far looks on track, but it’s unlikely that base pay will see further gains until the spring negotiations,” he said, adding that the bank’s focus is on how the spring pay talks unfold.

Swaps market pricing for the likelihood of a rate hike by the BOJ’s July meeting increased to about 78% on Wednesday.

At the post-decision press conference in January, Governor Kazuo Ueda signaled the possibility of additional rate hikes, noting that the country’s interest rates still remain below the neutral level. Ueda emphasised the need to monitor economic conditions before making the next move, reminding the market of the importance of keeping an eye on pay developments.

In Wednesday’s data, a more stable measure of wage trends that avoids sampling distortions showed that full-time workers’ base pay rose 2.8%, maintaining growth above 2% for more than a year.

Most BOJ watchers anticipate another tightening step in roughly six months, with July emerging as the most popular timing, according to a Bloomberg survey published last week following the January meeting.

Looking ahead, the market is closely watching wage negotiations set to culminate in March to assess the sustainability of wage growth. So far, the talks appear to be progressing solidly, with some large companies, including Asahi Breweries Ltd and Aeon Co, reportedly pledging to offer some workers salary increases exceeding 7%.

Japan’s largest trade union leader has also been meeting frequently with business representatives to push for higher wages, emphasising their goal of 5% for overall pay gains, and a slightly higher 6% target for smaller firms.

For real wages to see sustained gains, a key concern remains inflation, and ongoing yen weakness which is driving up import prices. Japan’s prices have risen at or above the BOJ’s 2% inflation target for nearly three years, weighing on consumer sentiment.

The yen remains more than 3% lower versus the dollar than this time last year and it is likely to stay under pressure for some time, as US Federal Reserve officials are increasingly signaling a potential delay in rate cuts amid Trump-driven uncertainties. Additionally, a wave of tariff-related announcements has heightened inflation risks in the US, which could further weaken the yen.

Slow real wages have already made many households cautious about spending, a source of concern not only for the BOJ, but also for Prime Minister Shigeru Ishiba’s government. Ishiba’s administration is aiming to shore up consumption through measures in the ¥21.9 trillion (US$141 billion or RM635.11 billion) stimulus package, including utility subsidies and cash handouts for low-income households.

Japan’s latest consumption trend is set to be shown in upcoming data, including household spending data due Friday. The gross domestic product figure for the final three months of last year will also be released later this month, with economists expecting a slowdown in private consumption.

“The upward wage trend has not fed into consumption, largely due to real wages growth not clearly increasing,” said Sompo’s Koike. “If real wages stably grow as inflation slows down towards the middle of the year, there is a possibility that private spending will recover from that point.”

Source: Theedgemarkets

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ING

Economic

Energy – China retaliatory tariffs

There were two key factors influencing oil prices yesterday, firstly downward pressure came from China announcing retaliatory tariffs against the US, which included targeting US energy flows. However, countering this later in the session was President Trump signing a directive to increase economic pressure on Iran by enforcing sanctions more strictly and so putting a large share of Iranian oil exports at risk.

On China’s retaliatory tariffs, US crude oil and LNG were included, with a 10% and 15% tariff, respectively. However, with these tariffs only coming into force on 10 February, there is still room for a deal, although there are reports that President Trump is in no rush to talk to President Xi. The tariffs on oil and LNG affect a relatively small share of Chinese imports. In 2024, of the 11.11m b/d of crude oil imported, only 1.7% came from the US. For LNG, of the 105bcm imported last year, 5.6% came from the US. Therefore, while not great for broader sentiment, it is something that oil and gas markets will be able to cope with fairly easily.

On the more bullish side for crude and as reflected in the price action during the latter part of yesterday’s trading session, was President Trump’s directive to increase economic pressure on Iran. This move shouldn’t come as too much of a surprise given that President Trump was hawkish towards Iran during his first term and reimposed oil sanctions against Iran back then. These sanctions were never lifted by Biden, but they were not enforced strictly, particularly after Russia invaded Ukraine. Therefore, stricter enforcement could see as much as 1m b/d of supply at risk. However, reduced flows from Iran will not help in lowering oil prices, something that President Trump is very keen to achieve. He would need to see OPEC increase oil output (something he has already called for) to offset any potential Iranian losses. However, convincing the Saudis and other members to increase output may prove difficult at current price levels.

Overnight, API numbers showed that US crude oil inventories increased by 5m barrels over the last week, above the roughly 2m barrels build the market was expecting. In addition, gasoline inventories increased by 5.4m barrels, while distillate stocks fell by 7m barrels. The more widely followed EIA inventory report will be released later today.

Moving to European gas, TTF prices settled 3.25% lower yesterday following China’s retaliatory tariffs on US LNG. The market remains relatively nervous over storage levels and the bigger job Europe will face to refill storage over the injection season. However, one would expect the market to face some resistance around current levels (in the absence of any supply shocks). Gas is deep in the coal switching range, even when considering the recent strength in EUA prices. Furthermore, the investment fund long in TTF seems fairly stretched and so the appetite for speculators to increase this significantly more (in the absence of a bullish catalyst) is likely limited.

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Cohen

Economic

USD/INR holds ground amid rising trade tensions between the US and China.

India HSBC Composite Purchasing Managers’ Index fell to a 14-month low of 57.7, from the previous 59.2 reading.

Traders await Friday’s US Nonfarm Payrolls, which is expected a slight slowdown in job creation for January.

USD/INR continues its upward momentum for the fourth consecutive day, trading around 87.10 during Wednesday’s Asian session. The risk-sensitive Indian Rupee (INR) remains under pressure due to increased risk aversion following rising trade tensions between the US and China.

On the economic front, the seasonally adjusted India HSBC Composite Purchasing Managers’ Index (PMI) dropped from 59.2 in December to a 14-month low of 57.7. Despite the decline, the reading remains above the long-term average, signaling continued economic expansion. Meanwhile, the Services PMI registered at 56.5 in January, reflecting strong growth, though it slipped from 59.3 in December to its lowest level since November 2022.

In response to the new 10% US tariff that took effect on Tuesday, China imposed a 15% tariff on US coal and liquefied natural gas (LNG) imports, along with an additional 10% tariff on crude oil, farm equipment, and certain automobiles.

Despite the escalating trade dispute between the United States and China, traders remain hopeful for a potential resolution, similar to the agreements reached with Mexico and Canada. US President Donald Trump stated on Monday that he expects to speak with China soon but warned, “If we can't reach a deal with China, the tariffs will be very, very substantial.” However, no further developments have been reported.

Meanwhile, investors anticipate a 25-basis-point rate cut in the Reserve Bank of India's (RBI) upcoming monetary policy meeting on Friday, amid slowing economic growth. Market optimism has been further buoyed by expectations following the FY2026 Budget.

Looking ahead, traders await Friday’s US Nonfarm Payrolls (NFP) report, which is expected to influence the Federal Reserve’s (Fed) monetary policy direction. Consensus estimates suggest a slight slowdown in job creation for January 2025.

Economic Indicator

HSBC Composite PMI

The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and HSBC Bank, is a leading indicator gauging business activity in India This d by weighting together comparable manufacturing and services indices using official manufacturing and services annual value added. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the Indian private economy is generally expanding, a bullish sign for the Indian Rupee (INR). Meanwhile, a reading below 50 signals that the activity is generally declining, which is seen as bearish for INR.

Source: FXSTREET

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President Trump Announces Tariffs on Canada, Mexico and China and the World Holds Its Breath

Trump imposes new tariffs on Canada, Mexico, and China

What about the timing?

Retaliation is on: Canada, Mexico, and China respond to US tariffs

Potential economic impact

What does this mean for Europe?

Trade war is a lose-lose situation

How Strong is China’s Response to Trump’s Tariff Policies?

China’s Initial Reaction: Cautious but Firm

U.S.-China Relations Under Trump’s Second Term: A New Phase?

Is There Still Room for Negotiation?

How Will China Retaliate?

China’s Strategic Considerations: Retaliation vs. Long-Term Stability

The Long-Term Outlook: Is a Trade Truce Possible?

Source: CNN

London Open: FTSE Nudges Up; GSK Surges on Guidance Upgrade

Source: Sharecast

Oil Prices Down Despite The Return Of Trump’s Maximum Pressure Campaign On Iran

Source: OILPRICE

Japan Wages Grow Most Since 1997, Helping Boj Rate Path And Yen

Source: Theedgemarkets

The Commodities Feed: Retaliatory Tariffs Vs Iranian Sanction Risk

Energy – China retaliatory tariffs

USD/INR Maintains Position Above 87.00 after HSBC PMI Data Release

Economic Indicator

HSBC Composite PMI

Source: FXSTREET

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