China knows that its power is not in what it buys, but in what it sells. Xi Jinping’s economic weaponry is squeezing supply chains and the foreign industries which depend on them https://t.co/KRRwHcQZzW ...

Xi Jinping wants to indigenise supply chains, so China is not at the mercy of its enemies for critical inputs. But the more it uses its economic arsenal, the weaker it will become https://t.co/4tPk2cgz06 ...

"I think we're going to experience some very serious inflation over time."Anglo American CEO Duncan Wanblad tells @KritiGuptaNews businesses will need to deal with rising costs and affected supply chains as a result of tariffs https://t.co/KeucuvZ9uy https://t.co/Q7pIV3GwtL ...

US-Japan Trade Agreement - The US and Japan have reached a trade agreement involving reciprocal tariffs, particularly on autos, with Japan proposing an innovative solution involving equity, credit guarantees, and funding for major projects in the US [5][6] - Japan will provide new capital targeted at strategic industries in the US to de-risk supply chains, especially in areas like medicine and semiconductors [6][7] - The agreement includes a 15% tariff rate for Japan, specifically for reciprocal tariffs on autos, which is linked to Japan's innovative financing mechanism [5][6] - The 15% tariff rate for Japan is considered a result of their innovative package, with President Trump pushing them to do even more [10] US-EU Trade Relations - The EU has not yet presented an innovative package similar to Japan's, but trade talks are progressing [11] - The EU is reportedly preparing to impose 30% tariffs on €100 billion (approximately $107 billion USD) worth of goods if no deal is reached [12] - The US views itself as a deficit nation compared to the EU's surplus, suggesting that trade escalations would impact the EU more [13] US-China Trade Relations - The US is in a good place with China and can start moving on to bigger discussions, with the potential for a rebalancing of the US-China relationship [14][15] - The US aims to bring back precision manufacturing and wants China to become more of a consumption economy [15] - Discussions with China will include purchasing agreements, especially for agriculture, with a focus on rebalancing the trade relationship [16][17] - Regular meetings with China are planned, with no desire to decouple but a need to de-risk part of the US supply chain [19] Federal Reserve and Monetary Policy - The Treasury Secretary believes the Federal Reserve's analysis of tariffs is off, as they have seen very little price pressure from tariffs [26] - The Treasury Secretary suggests the Federal Reserve should conduct an internal review to separate monetary policy from other activities [31] - The Treasury Secretary believes that regulation has been too stringent since the great financial crisis, leading to a build-up outside the regulated financial system, with private credit up ten times [36]

Just how resilient is the economy? On “Checks and Balance” this week:🎧 Assessing supply chains and tariffs, with @birdyword🎧 Looking back at the introduction of the income tax🎧 What the next year may look like, with @MichaelRStrain https://t.co/BlcbhQ3HOY ...

Global Economic Outlook - The US is behaving like a developing nation, exhibiting core market correlations more common in developing countries, such as currency weakening despite rising yields and the breakdown of negative correlations between bonds and equities [4] - The market initially had an 80% probability of a "Reagan moment" but fluctuated to below 50% by early April, and is now around 70%, indicating uncertainty about whether the US will experience a positive transformation or stagflation and recession [6] - There's a 50/50 chance of either "globalization light" or total fragmentation, with the outcome depending on how other countries react [6] Market and Corporate Reactions - The market views US corporations as strong with good balance sheets and innovations, and believes the US is escalating trade tensions to de-escalate, expecting either deadline extensions or favorable outcomes from negotiations by August 1st [8][9] - CEOs are generally in a "wait and see" mode, postponing major investment plans due to uncertainty about tariffs (e g, whether they will be 30% or 10%, volatile or fixed), impacting supply chains and market strategies [11][12] - Financial markets have adapted to the idea that deadlines will be pushed back, but the ultimate destination of trade policies remains unknown [14][15] Trade and Geopolitical Risks - Mexico was surprised by the potential 30% tariff, indicating that countries not currently in focus could quickly become targets [20] - China is not out of the woods regarding tariff issues and is no longer a locomotive of global growth, with concerns that it may start dumping exports, especially on the European Union, causing trade tensions [21][22] - The EU is preparing a response to US tariff threats and may seek alliances with other countries [23] Investment Strategies - European financial markets have outperformed US markets in the first quarter by 17 percentage points, benefiting from an excessive overweighting of US assets at the start of the year [26] - For Europe to continue outperforming, it needs to attract capital back, which it hasn't been doing sufficiently [27] - Companies are considering "C plus many" or "many" strategies for supply chains, reducing reliance on China and increasing resilience, which involves rewiring supply chains and is time-consuming and expensive [18]

Supply Chain Shift - Supply chains have significantly shifted from China/Asia to North America, moving from 30% procurement from those regions to 45% in North America [1] - The industry anticipates a continued significant shift of supply chains back to North America [1] Manufacturing & Automation - High volume automated manufacturing is expected to move closer to the point of use [2] - The combination of AI, robotics, and automation presents significant opportunities in these sectors [2] Challenges - Magnetics and batteries are identified as potentially challenging areas [2]