This
week, investors continued to focus on trade issues. This is after Donald Trump
decided to add tariffs to Chinese goods worth more than $200 billion. This
week, the Chinese retaliated against the US and announced that they would add
tariffs on goods worth more than $60 billion. While the size of these goods is
small, they have designed it to have major impacts on the electoral college
because most farmers voted for Trump. Traders now hope that the upcoming G20
meeting will lead to dialogue between China’s Xi Jinping and Trump.
In
other trade news, the Trump administration announced that it would differ the
tariffs of the global automobile brands for six months. The administration had
promised to add more tariffs to these imports, which are aimed at the European
Union. Analysts argue that such tariffs will raise the price of an average car
by at least $4000. It would also affect the European economy, which would lose
at least $20 billion every year. In addition, more US jobs would be lost.
On
Wednesday, Donald Trump signed an executive order banning Huawei from the
country. The executive order was long in the works but was not signed because
of the ongoing talks. The ban led to more talks of boycotting Apple in China.
Middle
East
The
week started with the announcement by Saudi Arabia and the United Arab Emirates
that their oil infrastructure and ships were under attack. The two countries
pointed their finger on Iran, their biggest rival in the region. The Houthi
rebels who are supported by Iran said that they were behind these attacks. In
response, Saudi Arabia had airstrikes in the Houthi region of Yemeni.
At
the same time, it was reported that the Trump administration was torn on how to
respond to the provocations by Iran. On the one hand, hawkish members like John
Bolton have called for military war with Iran. Donald Trump on the other hand
has opposed such a measure, arguing that it would not yield any results.
Instead, he has called for talks between the US and Iran.
Theresa
May
Another
big news this week was that Theresa May was considering resigning. The prime
minister, who came to power after the Brexit vote said that she would resign
after the UK decides on how to leave the European Union. She also said that she
would submit her Brexit bill to parliament again in early June. Experts believe
that it will be rejected again. Meanwhile, data from the UK showed that the
unemployment rate dropped to 3.8% in March.
Economic
Data
It
was a low data week. The biggest was from China, where the retail sales rose by
7.2%, which was lower than the expected 8.6%. The industrial production rose by
5.4% while fixed asset investments rose by 6.1%. In Canada, the CPI remained
unchanged while in the US, the manufacturing production declined by -0.5%. In
Australia, the unemployment rate moved up slightly to 5.2% while the
participation rate rose to 65.8%.
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