Business & Tech News
Trump Tariff Day Today – What will the Global Impact be
In the Whitehouse Rose Garden, later today, in what the White House is calling its “Liberation Day”, US President Donald Trump will be announcing his global tariff rates and how this is to be implemented. The impact of the announcements is expected to be vast and will in essence be changing a system of economic globalisation that has been running for decades. While many countries who trade with the US have import taxes or duties, the US in the past has provided wide import duty exemptions to a large array of countries. There is no clarification on what the tariff structure will be, however there is a possibility of a universal tariff on all imports into the USA.
President Trump has made it clear that the tariffs will be “reciprocal” and that the US will be “nicer” to its trade partners. That doesn’t rule out wide-scale imposition of tariffs at 10 or 20%, if, for example, the US deems that Value Added Taxes are tariffs. Donald Trump has already raised duties on Chinese imports, steel, aluminium and some goods from Canada and Mexico. Higher levies on cars are due to go into effect this week. The world is now waiting for Trump to unveil the details of his plan for a wider set of tariffs, which his team has spent the last few weeks developing.
Global Trade System Revised
While the tariffs alone are going to change the global trading system, there is a much bigger implication at stake. In the eyes of the US administration globalisation has failed and the idea that had been embraced that “rich countries would move further up the value chain, while the poor countries made the simpler things”, has not translated into reality according to Vice President JD Vance. The US now has taken the stance that this system has not worked out and so the US is moving away from this global trade world perspective and resetting the global trade structure. While there is the likelihood that things will settle down soon, the shake-up is creating a lot of uncertainty and caution in the short term and whatever is announced in the Rose garden today , will leave the global trading stage changed for the foreseeable future.
Market Impact
The US Dollar was trading steady as well as oil while yesterday saw US stocks gain momentum, with the S&P and Nasdaq indices closing higher. Gold prices have also been impacted and saw it rise above $3,130 per ounce this morning, climbing back toward record levels reached in the previous session, driven by risk aversion as markets braced for news of the impending US tariffs that may result in a global trade war.
South African Budget D-Day
South Africa’s much contested national budget passed its first test in parliament on yesterday, however it will face its biggest test today as parliament is set to vote to pass it. That prospect remains uncertain with the two biggest political parties in the ruling coalition government not yet having reached agreement. The African National Congress (ANC), secured the support it needed on parliament’s Standing Committee on Finance with the help of the small Action SA party outside the coalition. The committee’s report expressed reservations about some of the budget’s key revenue-generating measures, such as the proposed increases to value-added tax (VAT) and not adjusting personal income tax brackets for inflation, but it gave its overall support for the fiscal framework. It asked the National Treasury to consider its reservations and get back to it within 30 days.
The ANC’s main coalition partner, the Democratic Alliance, accused the ANC of crossing a “line in the sand” by using a party outside the coalition to get the fiscal framework approved. The South African Currency hit its lowest point against the US dollar in a month this morning and was trading at R18.48 as the country faces internal pressure as well as external pressures with the US unhappy with Pretoria’s policies. The US is South Africa’s second largest trading partner and currently benefits from lower trade tariffs from the US under the AGOA treaty. This may well however be changing today when the US announces its new Tarriff regime.
Markets by Numbers
Currencies:
Currency markets are indicating the major currencies remain fairly level, with the US Dollar trading slightly upwards and currently at 1.07892 against the Euro, and at 1.29141 against the Pound. The Yen is trading flat against the Dollar, and at 149.88 to the dollar currently. The rand has lost more ground today after budget disagreements in the GNU and is trading at R18.53 to the dollar currently.
Commodities:
- Gold futures prices are currently trading lower after hitting 3130 earlier today, and currently at $3115.
- Copper prices have levelled out this morning, and at 5.0316 currently.
- Silver prices are trading lower today, and at 33754 currently.
- Platinum is trading at $1001 currently, while Palladium prices are currently trading higher today and at $985.50 currently.
- Brent Crude Oil prices are trending higher today and at $74.44 currently, with WTI also trading upwards, and at $71.15 currently.
- Cocoa futures has gained upward momentum above the $8000 level this morning, with prices currently at $8326 per ton.
- Coffee futures prices have continued to trade upwards today, and at $389 currently.
Crypto Currencies:
- Bitcoin prices have gained overnight, and is currently trading at $84299.
- Ether prices have remained below the $2000 mark, and currently trading up today at $1859, losing over 18% this month.
- $Trumpcoin has remained just above the $10 level, and the coin is currently trading at $10.16 currently
(All prices quoted at approximately 07H30 – Central African Time)
Other News in Africa Today
Congo Peace Talks – Fresh Hope
After several failed attempts at getting the warring parties around a table, the Congo government and Rwanda-backed M23 rebels aim to hold direct talks on April 9, sources from both camps said on Tuesday, a potential boost to Qatar’s efforts to end the Central African country’s worst fighting in decades. The meeting in Doha would be the two sides’ first direct negotiations since M23 fighters captured eastern Congo’s two largest cities in a rapid offensive that has left thousands dead and forced hundreds of thousands more from their homes.
