Weekend Review: India Raises Tariffs on US Goods as Hong Kong Protests Continue

Over the weekend, investors and analysts around the world continued to focus on the crisis in the Middle East. This is after two oil tankers were attacked on Wednesday at the Strait of Hormuz. The United States, through Mike Pompeo and Donald Trump, placed their blame on Iran. They also provided video evidence of the attack. Iran immediately rejected the allegations and placed the blame on United States or one of its allies in the region. These allies include Saudi Arabia and Israel. In response, the European Union urged for restraint because they believe that a military conflict could happen. This issue matters because it is partly because of the decision by Trump to abandon the nuclear deal. It also matters because two thirds of all seaborne oil passes through the Strait of Hormuz.

In Hong Kong, hundreds of thousands of people held protests in the city. The demonstrators have been concerned with a new government bill that will allow the country to extradite criminals to other countries like China and Taiwan. The origin of the bill was after a person killed his girlfriend in Taiwan and freed to Hong Kong. Because the city did not have an extradition treaty with Taiwan, the fugitive could not be extradited. While the bill has good intentions, Hong Kong residents believe that it exposes innocent residents to being extradited to the mainland China, which is not known of having a proper justice system.

In an interview, Wilbur Ross, who is the commerce secretary under Donald Trump lowered the expectation that Trump will make a deal with Xi at the G20 meeting. Ross said that the most that can come out of the meeting will be ceasefire or the call to complete the deal that was under negotiation. Trump has threatened additional tariffs on Chinese goods worth more than $300 billion. In letters sent to the United States Trade Representative office, many companies that will be affected asked the administration to forego the tariffs. They argue that their businesses, which rely on China fir cheap labour will be affected because they cannot source their goods in other countries. Most of the companies have ruled out bringing their plants to the US because of the high labor costs. Meanwhile, India announced that it will impose higher tariffs on American goods like apple, almonds, and walnuts. This is after Washington stripped the country preferential access to the US market. Already, the country imposes tariffs as high as 120% on American goods.

In South America, a massive power outage left millions of people without electricity. The countries affected were the likes of Argentina and Uruguay. Parts of Brazil and Paraguay were also without power. While no explanation was made, heavy rains around Buenos Aires may be to blame. As the weeks starts, investors will pay close attention to the news because the region is one of the biggest in terms of agriculture. It leads in the production of crops like sugar, soybeans, and coffee.

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