Baltic
Dry Index. 2003 +08 Brent Crude 71.91
Spot Gold 3290 US 2 Year Yield 3.94 unch.
US Federal Debt. 37.175 trillion
US GDP 30.172 trillion.
To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.
Thomas Jefferson
It is tariff madness Friday. President Trump’s Great Tariff Gamble with the global and US economy starts today.
I think it will all end badly. The global and US economies will both suffer. Trade will slow, unemployment rise and with it anti-American sentiment.
A rising global boycott against US goods and services and travel.
Eventually, a global stock market crash.
But what do I know?
Asia-Pacific markets fall after Trump
modifies tariff rates
Updated Fri, Aug 1 2025 12:03 AM EDT
Asia-Pacific markets fell Friday after
U.S. President Donald Trump modified
“reciprocal” tariff
rates on several countries, ranging
from 10% to 41%
Indian stocks fall in early trade
Indian stocks fell in early trade Friday.
The benchmark Nifty 50 was down 0.35%,
while the BSE Sensex index fell 0.34% as of 9:30 a.m. Indian Standard time (12
a.m. ET).
Asian tech giants mostly fall as investors
digest Wall Street’s tech earnings
Asia-Pacific tech giants mostly fell
Friday as investors digested the Big Tech earnings on Wall Street overnight, as
well as U.S. President Donald Trump’s fresh duties on several countries.
In Japan, Tokyo Electron plunged
17% as of 11 a.m. Singapore time (11 p.m. ET Thursday), leading losses among
the country’s tech names.
Lasertec had lost 4.67%,
while Advantest Corp declined
2.51% and SoftBank Group fell
2.07%. Meanwhile, Renesas
Electronics was last seen up 0.7%.
Over in South Korea, SK Hynix had plunged
5.12%, while Samsung Electronics was down 1.92%.
Taiwan’s TSMC declined by 1.72%,
while Hon Hai Precision
Industry — known globally as Foxconn — increased by 1.12%.
Over in Hong Kong, the tech-heavy Hang Seng Tech index was
down 0.23% in choppy trade.
Among the worst performers were China Petroleum & Chemical Corp,
which dropped by 5%, Zhongsheng
Group Holdings, which lost 3.02% and Li Auto which declined by
2.6%, according to LSEG data.
China’s manufacturing activity shrinks,
Caixin PMI shows
China’s factory activity deteriorated in
July as new business growth softened after manufacturers scaled back production
due to uncertainties in the U.S.′ tariffs on Chinese exports, a private sector survey released Friday showed.
The Caixin/S&P Global services
purchasing managers’ index fell to 49.5 in July from 50.4 in the month before.
The metric fell below the 50-mark which
separates an expansion from contraction and missed the 50.4 reading expected by
analysts polled by Reuters.
S&P Global Market Intelligence’s
Economics Associate Director Jingyi Pan noted that “manufacturing production
fell for only the second time since October 2023.”
“While successful business development
efforts within the domestic market were able to sustain higher new work
inflows, overall sales growth was only fractional as demand from overseas
remained subdued on the back of global trade uncertainty,” she noted.
Pan added that companies had also cut
their selling prices amid rising input costs.
— Amala Balakrishner
Asia
stock markets today: live updates
Trump rejigs tariff rates ahead of deadline,
levies 40% duties on all transshipped goods
Published Thu, Jul 31 2025 7:47 PM EDT
U.S. President Donald Trump signed an
executive order Thursday that modified “reciprocal” tariffs on dozens of
countries, with updated duties ranging from 10% to 41%.
Trump, in a phone interview with NBC News following the order, said that he would be open to
more compelling offers, but it was “too late” for other nations to avoid
tariffs set to kick in next week.
“It doesn’t mean that somebody doesn’t
come along in four weeks and say we can make some kind of a deal,” he said.
The latest tariff rates will start from
Aug. 7, a White House official told CNBC-TV18 in an emailed statement.
“This should not be read as an extension,
but to give [the U.S.] Customs and Border Protection ample time to implement
these [tariffs],” the official added.
Trump said Wednesday in a post on Truth Social that the Aug. 1 deadline for tariffs to
restart will remain.
“THE AUGUST FIRST DEADLINE IS THE AUGUST
FIRST DEADLINE — IT STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR
AMERICA!!!” he wrote.
Among countries facing the steepest
“reciprocal” tariffs, Syria has the highest rate at 41%. Exports from Laos and
Myanmar to the U.S. will face a 40% duty. Switzerland and South Africa will be
hit with tariffs of 39% and 30%, respectively.
For some Asian nations that have not
confirmed a trade pact with the U.S., the latest executive order offered some
relief with lower duties. The new tariff rates on imports from Thailand will be
lowered to 19% from 36%, and those from Malaysia will be reduced to 19% from
the 24% rate set earlier.
Shipments from Taiwan will face a 20%
tariff, lower than the 32% rate set earlier.
All goods that are considered to have been
transshipped to avoid applicable duties will also be subject to an additional
40% tariff, according to the White House.
Countries that are not listed in the
latest order will face an additional duty of 10%, the order said. The updated
directive modifies tariffs imposed under the earlier executive order issued in April.
Trading partners that have reached or are
near reaching trade and security agreements with the U.S. will be subject to
the modified rates until those agreements are concluded, according to the
executive order.
----Continued uncertainties around
upcoming sectoral tariffs and more potential tariff increases will be of
particular concern, Cutler said, especially if the Trump administration
believes countries are not implementing agreed-upon terms in “good faith.”
Stephen Olson, senior visiting fellow at
ISEAS-Yusof Ishak Institute and a former U.S. trade negotiator, was of the same
view, saying: “Don’t assume this is the end of the story ... more deals and
further tariff increases are almost certain to follow.”
“Countries wishing to trade with the US
will now face dramatically higher tariffs that could be further increased at
the whim of a president who has shown a disdain for trade rules and agreements,
even those he himself has signed,” Olson added.
Trump also followed through on his plan to
raise tariffs on exports
from Canada to 35% from 25%, starting Friday, barring goods that are
covered under the U.S.-Mexico-Canada free trade pact he signed during his first
term.
More
Trump
rejigs tariffs ahead of deadline, targets transshipment with 40% duty
US Appeals Court Skeptical of
Trump Tariff Justification
July 31, 2025 at 10:47 PM GMT+1
Amid a flurry
of announcements of last-minute deals ahead of Donald Trump’s latest
tariff deadline, the underlying legal justification for the US president’s
global trade war was
the subject of significant doubt before a panel of 11 members of
the US Court of Appeals for the Federal Circuit in Washington.
The highly anticipated hearing was to
consider a lower court ruling finding the Republican president’s use of
the International Emergency Economic Powers Act to circumvent Congress’s power
to levy tariffs was, in fact, illegal. Neal Katyal, a lawyer for the
plaintiffs, argued Trump’s citation of a statute that doesn’t even mention
tariffs to launch an unprecedented trade war was a “breathtaking claim to power
that no president has asserted in 200 years.”
A majority of the panel, including both
Democratic and Republican appointees, expressed varying levels of skepticism
with the government’s position. Tariffs, said US Judge Alan David
Lourie, an appointee of Republican President George W. Bush, seemed “to have no
friends” in the law.
Still, Trump has plenty of room to run if
he loses. Any decision will likely take weeks and would almost certainly be
stayed in order to give the US Supreme Court time to consider a request
for review.
The high court, controlled by a 6-3
Republican-appointed supermajority, has over the past several months repeatedly
cleared the way for Trump’s agenda. But even if it didn’t this
time, he has
other legal avenues along which to prosecute a trade war. And of
course, there’s always the more extreme option: A Washington Post study
of the ongoing constitutional crisis has found the administration is accused of
not following a full
one-third of all court rulings against it. —David
E. Rovella
US
Court Skeptical of Trump Trade War Justification: Evening Briefing - Bloomberg
Tariff Price Hikes Crept Into The Fed's Favorite
Inflation Gauge In June
July 31, 2025
Key Takeaways
- Inflation
accelerated in June according to the PCE price index. Prices rose 2.6%
over the year, higher than the 2.4% annual price increase in May.
- "Core"
PCE prices rose 2.8%, the same as in May, above the Federal Reserve's 2%
annual goal.
- Tariffs
are pushing up consumer prices for certain items, economists said.
Prices for goods rose in June as
businesses passed the cost of tariffs on to customers, according to the Federal
Reserve's preferred measure of inflation.
Prices rose 2.6% in June compared to the
year before, according to the Personal Consumption Expenditures price index.
That was up from a 2.4% increase in May, and well above its recent low point in
September, when annual inflation was 2.1%. "Core" prices, which
exclude the volatile prices for food and energy, rose 2.8% over the year, the
same as in May.
Inflation measures are stubbornly above
the Federal Reserve's goal of a 2% annual rate. President Donald Trump's
wide-ranging import taxes, which he began imposing in February, have pushed
prices up, according to analysis by several economists. The report echoed a
resurgence of inflation shown in the Consumer Price Index, a separate inflation
measure released earlier in July.
What Does the Data Mean For the Fed?
Stubborn inflation has also, indirectly,
kept borrowing costs high on all kinds of loans.
The Federal Reserve has kept
its benchmark interest rate flat this year at a higher-than-usual
level in an effort to discourage borrowing and spending and stamp out high
inflation. The Fed pays especially close attention to PCE inflation, using the
"core" PCE price index as its benchmark for whether inflation is
running at the central bank's target of a 2% annual rate.
Tariff Price Hikes
Crept Into The Fed's Favorite Inflation Gauge In June
Trump issues blitz of tariff announcements on
copper, Brazil, small-value imports
31 July 2025
WASHINGTON (Reuters) -U.S. President
Donald Trump on Wednesday issued a blitz of tariff announcements ranging from
changes to previously threatened levies on imports of copper and on goods from
Brazil to ending an exemption from tariffs for small-value shipments from
overseas.
The wave of announcements came as the
clock ticked down toward an August 1 deadline for higher tariff rates to kick
in on goods imported from most of the world as Trump presses on with his bid to
reshape global trade. The president also touted what he said was a deal with
South Korea that would include a 15% U.S. tariff on imports from the country.
Capping a day that began with Trump
announcing a 25% tariff rate on goods from India after months of negotiations
between Washington and New Delhi failed to produce a trade deal, Trump said a
50% tariff on copper pipes and wiring would kick in on Friday.
Details of the levy, though, fell short of
the sweeping restrictions expected and left out copper input materials such as
ores, concentrates and cathodes.
The surprise move dragged down U.S. copper
prices more than 17% on the Comex exchange and unwound a premium over the
London global benchmark that had grown in recent weeks, with shipments diverted
there in anticipation of higher domestic prices.
Markets are now busily repricing refined
copper much lower after Trump's epic backflip on his own import tariff
policy," said Tom Price, an analyst at the London brokerage Panmure
Liberum. "Someone must have finally got through to (Trump) that the U.S.
economy simply can't afford this new trade-hit."
Trump first teased the copper tariff in
early July, implying that it would apply to all types of the red metal, ranging
from cathodes produced by mines and smelters to wiring and other finished
products.
Yet the proclamation released by the White
House said the tariff will apply only to pipes, tubes and other semi-finished
copper products, as well as products that copper is heavily used to
manufacture, including cable and electrical components.
The move aids manufacturers, but does
little to boost the constrained U.S. copper mining industry, which for years
has asked Washington for permitting reform or other steps that could fuel
growth. The move is essentially a boost for Chile and Peru, two of the
world's largest copper miners and major suppliers to the United States.
The measure came after a U.S.
investigation under Section 232 that Trump ordered in February, findings from
which were delivered by Commerce Secretary Howard Lutnick on June 30.
BRAZIL
Trump on Wednesday slapped a 50% tariff on
most Brazilian goods to fight what he has called a "witch hunt"
against former President Jair Bolsonaro, but softened the blow
by excluding sectors such as aircraft, energy and orange juice from
the heavier levies.
That came as a relief for many in
Brasilia, who since Trump announced the tariffs had been urging
protections for major exporters caught in the crossfire. Shares of planemaker
Embraer and pulpmaker Suzano rose.
"We're not facing the worst-case
scenario," Brazilian Treasury Secretary Rogerio Ceron told reporters.
"It's a more benign outcome than it could have been."
The new tariffs will go into effect on
August 6, not August 1 as Trump announced originally.
'DE MINIMIS'
The White House also said the United
States is suspending a "de minimis" exemption that allowed low-value
commercial shipments to be shipped to the United States without facing tariffs.
Under Trump's order, packages valued at or
under $800 sent to the U.S. outside of the international postal network will
now face "all applicable duties" starting on August 29, the White
House said.
Trump earlier targeted packages from
China and Hong Kong. The tax-and-spending bill recently signed by
Trump repealed the legal basis for the de minimis exemption worldwide starting
on July 1, 2027.
"Trump is acting more quickly to
suspend the de minimis exemption than the OBBBA requires, to deal with national
emergencies and save American lives and businesses now," the White House
said, referring to the bill known as the One Big Beautiful Bill Act.
Goods shipped through the postal system
will face one of two tariffs: either an "ad valorem duty" equal to
the effective tariff rate of the package's country of origin or, for six
months, a specific tariff of $80 to $200 depending on the country of origin's
tariff rate.
More
Trump issues blitz
of tariff announcements on copper, Brazil, small-value imports
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.
Stocks
and bonds are behaving like the US economy is recession-proof
July
30, 2025
"Recession-proof."
Professional
economists might balk at the phrase, but it's how the stock and bond markets
see the economy in the second half of 2025.
DataTrek
Research wrote on Tuesday that markets are flashing signs of extreme confidence
in the trajectory of the
US economy.
Nicholas Colas, cofounder of the firm, pointed to two signals being sent in the
stock and bond markets in particular:
In
the stock
market, valuations
look similar to levels seen during the internet boom in the 1990s, Colas said,
with the S&P 500 achieving a series of record highs in recent weeks.
The
benchmark index now looks like it's 8% more expensive than it was during the
dot-com bubble, based on the forward price-to-earnings multiple
among S&P
500 companies,
DataTrek said. Given earnings estimates for 2026, the index looks on track to
be 23% more expensive than it was during the dot-com
bubble next
year.
There's
no way to explain those valuations without using a price-to-earnings ratio that
implies "Peak confidence" or "Super Peak" confidence among
investors, Colas said.
"Whether
one likes or not, US large cap valuations imply at least a 'highly recession
resistant US economy,' if not a 'recession-proof' one," he said.
In
the bond
market, a similar
story is unfolding in the 10-year
US Treasury yield.
When
recession odds decrease, investors tend to expect two things, Colas said:
- They don't
expect a decrease in inflation. Recessions are inherently disinflationary,
and tend to reduce the overall inflation rate by an average of 4.4
percentage points, Colas said.
- They expect
long-term interest rates to rise. That's because investors don't expect
the Fed to lower interest rates to boost growth, leading to a higher
10-year yield.
The
10-year US Treasury yield hovered around 4.4% on Tuesday, higher than levels
seen 10 years ago.
Meanwhile,
the 10-year breakeven inflation rate hovered around 2.44% on Tuesday. That's
also higher than the average through 2010-2019, when inflation
expectations hovered
around 2%.
"The
idea that markets are cutting future recession
odds does
a good job of explaining why nominal yields may remain high," Colas said.
"It is optimism about the US economy's recession resistance, not pessimism
regarding the Fed's inflation fighting credentials, driving this
phenomenon."
More
Stocks and bonds
are behaving like the US economy is recession-proof
China’s
July manufacturing activity contracts more than expected — declines for
fourth-straight month
Published
Wed, Jul 30 2025 9:44 PM EDT
BEIJING
— China’s official
gauge for manufacturing activity on Thursday pointed to a
worse-than-expected contraction in July amid slower economic growth and ongoing
U.S. trade tensions.
The
Manufacturing Purchasing Managers’ Index for July was 49.3, missing
expectations for 49.7 according to a Reuters poll.
China’s
official manufacturing PMI has been below the 50 mark, reflecting contraction
rather than expansion, since April.
“The
PMI is lower due to weather challenges, as well as shifting some orders to
lower-tariffed countries such as Vietnam,” said Cameron Johnson, Shanghai-based
senior partner at consulting firm Tidalwave Solutions.
Overall
export figures are expected to remain stable for the next quarter, Johnson
said, noting that some production will be shifted to other countries to take
advantage of lower tariffs until China sets its duty rates with the U.S.
Tensions
between the world’s two largest economies escalated in April with each side
imposing tariffs of more than 100% on imports of goods from the other. The two
sides agreed in May to roll back most of the additional duties for 90 days,
bringing the effective rate for China exports to the U.S. to around 43%.
The
truce is set to expire in mid-August. Representatives from the world’s two
largest economies ended a meeting in Stockholm this week without announcing
an extension of the agreement, which had been widely expected.
Earlier
in July, the U.S. reached a deal with Vietnam that imposed a 40% tariff if the
goods were made elsewhere and were only transferred to the Southeast Asian
country for sale to the U.S. Goods made in Vietnam will otherwise face a 20%
tariff when shipped to the U.S.
Within
China’s latest manufacturing PMI, sub-indexes showed that employment, new
orders and raw materials inventory also contracted in July. The index for jobs
ticked up to 48, from 47.9 in June, while that for new orders fell to 49.4,
down from 50.2 in June.
The
National Bureau of Statistics attributed
the manufacturing PMI decline in July to the traditional
off-season and factors such as extreme heat and torrential rain in parts of the
country.
More
China's July manufacturing activity contracts more than expected
Moderna
to slash 10% of workforce as biotech cuts costs, Covid shot sales slow
Published
Thu, Jul 31 2025 7:15 AM EDT
Moderna on Thursday
said it plans to slash roughly 10% of its global workforce by the end of the
year, as Covid shot sales continue to
dwindle and
the company grapples with uncertainty in the vaccine market.
In a
memo to
employees, Moderna CEO Stephane Bancel said the company expects to have fewer
than 5,000 workers by the end of the year. Moderna had approximately 5,800
full-time employees in 18 countries as of Dec. 31, 2024, according to its 2024
annual report.
Shares
of Moderna have dropped more than 20% this year. In May, the company reported
first-quarter vaccine sales that missed Wall Street’s estimates. Moderna is
also navigating policy hurdles under Health
and Human Services Secretary Robert F. Kennedy Jr., who has taken steps to
change vaccine guidelines and potentially threaten access to shots in the U.S.
Also
in May, Moderna said it will reduce annual operating expenses by about $1.5
billion by 2027. That target adds to cuts that the company previously
announced.
Moderna
will provide another update on its business when it posts quarterly results
Friday morning.
In
the memo, Bancel said Moderna has made significant progress toward
cuts by scaling down research and development, especially as it concludes
trials on respiratory products, renegotiates supplier agreements and reduces
manufacturing costs.
“Every
effort was made to avoid affecting jobs,” he said. “But today, reshaping our
operating structure and aligning our cost structure to the realities of our
business are essential to remain focused and financially disciplined, while
continuing to invest in our science on the path to 2027.”
More
Moderna to slash
10% of workforce amid Covid vaccine sales
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.
French
floating solar system for near-shore use gains marine classification
Tue 29 Jul 2025 — updated 30 Jul
2025
French clean-tech company HelioRec has reached a
significant certification milestone for its near-shore floating solar system.
The firm received approval in
principle (AiP) level II for its technology from Bureau Veritas Marine &
Offshore, a certification body for the maritime and offshore energy industries.
Founded in Nantes, France, in
2019, HelioRec has been developing floating solar power plants for near‑shore
and port environments.
While conventional solar
farms sometimes attract controversy because of the amount of land they
use, floating solar farms occupy
much less valuable space above bodies of water.
They have become a feature in
the secluded waters of lakes and reservoirs; however, HelioRec’s system
can also be used in coastal waters.
The company is focusing on
ports and near-shore sites close to urban areas and industrial sites so the
system can more easily and cost-effectively connect to the electricity grid.
HelioRec said the
certification was “a strong endorsement of the technical integrity and
feasibility of our marine energy system.
“The AiP confirms that the
core design choices and system architecture meet marine classification
requirements ‘in principle’ – a vital step in scaling our floating solar
technology across ports, coastal municipalities and offshore infrastructure.”
The certification covers
design regulations for offshore floating structures, mooring systems, material
and welding requirements, and fatigue testing of key components such as mooring
chains.
HelioRec’s technology
features a patented hydro-lock design. The system’s floating solar units are
able to retain water inside their hollow structures. This water provides
additional mass, which helps to stabilise the system on the water surface. As
such, it doesn’t require a heavy metal or concrete ballast to anchor it as
other types of marine renewable technologies do.
It is also considered to be
an environmentally friendly solution as the floating design has a low impact on
the marine environment.
The system is made from
recyclable materials and features UV and saltwater-resistant flexible
connectors between the floating elements, which helps distribute mechanical
stress across the floating array during turbulent weather.
This design means that
HelioRec’s floating platforms are able to withstand extreme near-shore weather,
including wind speeds exceeding 160km/h and wave heights up to two
metres.
More
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Another weekend and the first weekend of Trump’s
unrestrained tariff war on the rest of the world by taxing American consumers
and businesses! An interesting few months lies ahead in the rest of 2025.
In tomorrow’s LIR, more on Gaza, the Stain on Israel.
Have a great weekend everyone.
It is
the debtor that is ruined by hard times.
Rutherford B. Hayes
