Group 1 - The Japanese government announced the cancellation of the visit to the U.S. by Minister of Economic Revitalization Akizumi Shunichi due to unsuccessful prior consultations between the U.S. and Japan regarding tariff agreements [1] - The trade agreement includes a "reciprocal tariff" rate of 15% for Japan, with Japan committing to invest $550 billion in the U.S. and open its market [3] - There are discrepancies between the U.S. and Japanese governments regarding the implementation of the 15% tariff rate, particularly concerning existing tariff rates on various goods [3][4] Group 2 - The U.S. government has indicated that Japan's taxed goods will incur an additional 15% on top of existing rates, leading to significant increases in tariffs for certain products [3] - The main purpose of Akizumi's visit was to urge the U.S. to change the execution method of the 15% tariff and to reduce tariffs on Japanese automobiles to 15% [4] - The lack of an official joint document on the trade agreement has contributed to the cancellation of the visit, as Japan did not receive commitments from the U.S. regarding changes to tariff execution [4]

Core Viewpoint - Canada will eliminate the 25% retaliatory tariffs on U.S. goods that comply with the USMCA starting September 1, as a response to the U.S. reducing tariffs on Canadian products [3][7]. Group 1: Tariff Changes - The Canadian government has imposed retaliatory tariffs on U.S. goods worth CAD 60 billion since the trade war began, including additional tariffs on U.S. automobiles [3][7]. - Canadian Prime Minister Carney indicated that the focus will be on assisting industries facing high tariffs, such as steel, aluminum, automotive, and lumber [3][7]. - The U.S. has increased tariffs on certain Canadian goods to 35%, but products covered by the USMCA are exempt from this increase [3][7]. Group 2: Impact on Small Businesses - A survey by the Canadian Federation of Independent Business (CFIB) revealed that 38% of small businesses may not survive another year if current tariff rules persist, with 58% affected by retaliatory tariffs [7][8]. - Many small businesses are bearing the full cost of U.S. import tariffs, with 67% indicating they have paid these tariffs themselves [7][8]. - The cost of shifting to domestic manufacturing for some companies, like Starfield Optics, can be as high as CAD 12,000, while their profits were CAD 150,000 last year [7]. Group 3: Trade Statistics - As of January, approximately 34% of Canadian goods exported to the U.S. complied with the USMCA, which increased to nearly 57% by June [7]. - Over 85% of goods in Canada-U.S. trade currently enjoy tariff exemptions [7]. Group 4: Ongoing Tariffs and Future Concerns - Tariffs on U.S. automobiles, steel, and aluminum will remain in effect, with Canada being significantly impacted as a major supplier of these materials to the U.S. [10][11]. - In 2024, Canada is projected to export CAD 12.1 billion worth of steel, with 91% going to the U.S., and import CAD 15.5 billion worth of steel, with nearly 45% from the U.S. [11]. - The Canadian legal expert warned that maintaining retaliatory tariffs could jeopardize Canada's exemptions under the USMCA, especially as other countries have reached agreements with the U.S. [11].

Group 1 - The Trump administration is conducting a significant tariff investigation on furniture imports, with tariffs to be determined within 50 days [2] - The imposition of tariffs across various sectors, including furniture, is expected to have profound impacts on inflation and global supply chains [3] - Canadian Prime Minister Carney announced the cancellation of several retaliatory tariffs on U.S. goods, while maintaining tariffs on U.S. automobiles, steel, and aluminum, indicating a complex trade relationship between the U.S. and Canada [3] Group 2 - Fitch Ratings reported that U.S. consumer spending is expected to slow significantly in the first half of 2025, influenced by trade policy uncertainty and stock market volatility [4] - Despite a rebound in Q2 GDP data, the underlying growth structure is not ideal, with consumer and investment growth showing signs of slowing down due to ongoing tariff impacts [4] - The potential for continued downward pressure on U.S. consumer spending and private investment growth is anticipated as a result of Trump's tariff policies [4] Group 3 - The Federal Reserve's actions are closely monitored by global capital markets, with calls for a 100 basis point rate cut this year from a prominent candidate for the Fed chair position [5] - Fed Chair Powell's recent comments suggest a potential shift towards a more dovish stance, opening the door for rate cuts in September [6] - Concerns about an aging population impacting economic growth and inflation have been raised, with labor shortages potentially leading to increased wage demands [8]

Group 1: Trade Agreement and Tariffs - The United States and the European Union have reached a framework agreement on trade, reaffirming a 15% tariff cap on most EU goods, including automobiles, pharmaceuticals, semiconductors, and timber [1][2] - Since the beginning of the year, the U.S. has gradually increased tariffs on European goods, with most EU products facing a 15% baseline tariff as of August, significantly higher than the previous average of less than 5% [2][3] - The EU's exports to the U.S. have seen a year-on-year decline of over 10%, reflecting the severe impact of the U.S. tariff measures [1][3] Group 2: Impact on European Industries - The automotive industry is under significant pressure, with German and French manufacturers heavily reliant on the U.S. market, facing uncertainty in long-term planning due to tariff fluctuations [3][4] - The metal industry is experiencing severe challenges, with steel and aluminum products subjected to a 50% tariff, leading to a sharp reduction in orders from major exporting countries like Germany and Italy [3][4] - The wine and spirits industry is also affected, with French wines and Italian spirits facing a 15% tariff, potentially leading to a 30% increase in financial burdens for the industry [3][4] Group 3: Corporate Strategies and Adjustments - European companies are actively seeking strategies to cope with high tariffs, including price increases to pass on costs to consumers, as seen with brands like BMW and Mercedes [4][5] - Some companies are accelerating localization efforts and considering expanding production capacity in the U.S. to mitigate tariff risks, with Volkswagen planning attractive investment initiatives [4][5] - Smaller exporters are shifting their market focus to Southeast Asia and the Middle East to reduce dependence on the U.S. market [5] Group 4: Economic Indicators and Future Outlook - The eurozone's industrial output fell by 1.3% month-on-month in June, indicating pressure on the manufacturing sector, despite positive GDP growth in Q2 [6] - Economists warn that if automotive tariffs are not reduced soon, eurozone exports may face further pressure in Q3, potentially impacting corporate profits and overall economic growth [6]

Core Points - The article highlights the severe consequences of U.S. tariff policies on African countries, particularly Lesotho, which has historically maintained a strong trade relationship with the U.S. [1] - Lesotho has declared a "disaster state" due to rising export prices of clothing and textiles resulting from U.S. tariffs, leading to factory closures and job losses [1][5] - The U.S. tariffs, including a 15% tariff on Lesotho and a 30% tariff on South Africa, are expected to have a ripple effect on nearly 20 African countries [1][5] Group 1: Trade Relations and Economic Impact - The U.S. and African trade relationship has been viewed as a solution to poverty in Africa, with the African Growth and Opportunity Act (AGOA) allowing eligible countries to export goods to the U.S. duty-free [3] - AGOA has stimulated local manufacturing and created job opportunities, helping African countries move away from reliance on raw material exports [3][9] - Despite AGOA's successes, only 32 African countries benefit from duty-free treatment, leaving many poorer nations without access to these advantages [3][9] Group 2: Tariff Policy and Future Uncertainty - The comprehensive tariff policies of the Trump administration pose a threat to the AGOA program, which is set to expire unless renewed by Congress [5] - The expiration of AGOA could lead to increased economic influence from other countries in Africa and higher prices for U.S. consumers on goods like jeans [5][9] - The trade deficit between the U.S. and several African nations, including a $234 million deficit with Lesotho, is seen as a sign of successful cooperation, facilitating economic development in Africa [3][9]

Group 1 - Canada is caught in a difficult position between the US and China, facing potential economic crisis and diplomatic turmoil [2] - The Canadian government has decided to impose a digital tax on US tech giants, which is seen as a direct challenge to US tech dominance [6][8] - This digital tax aims to fill tax revenue gaps and establish Canada’s position in international economic rules, but the government may have underestimated the US response [8] Group 2 - The digital tax could impose up to 3% on US tech companies operating in Canada, potentially costing them up to $2 billion [13] - The US response has been aggressive, with threats to freeze trade negotiations and impose tariffs on Canadian goods, particularly in the automotive and energy sectors [10][15] - Canada’s economic dependency on the US is significant, with nearly one-fifth of its economy reliant on exports to the US, especially in critical sectors like energy and automotive [10][16] Group 3 - The potential for a "301 investigation" by the US could lead to comprehensive trade sanctions against Canada, forcing the Canadian government to reconsider its strategy [16] - Alberta's oil industry is heavily reliant on the US market, and any tariffs could severely impact its economy, highlighting Canada's lack of independent energy transport infrastructure [18] - Ultimately, Canada may have to cancel the digital tax to reopen trade negotiations with the US and avoid economic disaster [18]

Federal Reserve Developments - The U.S. Department of Justice plans to investigate Federal Reserve Governor Lisa Cook, urging Chairman Powell to remove her from the board due to concerns over her financial history [2] - Cleveland Fed President Loretta Mester stated she would not support a rate cut if a policy decision were made immediately, citing persistent high inflation [2][3] - Atlanta Fed President Raphael Bostic believes only one rate cut this year is appropriate, while Boston Fed President Susan Collins is open to cuts if employment prospects worsen [3][4] Jackson Hole Economic Symposium - Market focus is on the upcoming speech by Fed Chairman Powell at the Jackson Hole symposium, with investors looking for clues on the interest rate path [7] - Current market sentiment is bearish, with concerns that the Fed may not shift to a dovish stance as implied by the rate markets [7] - CME FedWatch Tool indicates a 25% probability of maintaining rates in September and a 75% probability of a 25 basis point cut [4] U.S.-EU Trade Agreement - The U.S. and EU have reached a framework agreement on trade, covering various sectors including agriculture, automobiles, and semiconductors [9] - The agreement stipulates that the U.S. will apply either the Most Favored Nation (MFN) tariff rate or a 15% tariff rate on EU goods, with specific products to be subject to MFN tariffs starting September 2025 [9][10] - The agreement is seen as a positive development for European automakers, potentially reducing the current 27.5% tariffs on cars and parts [9][11]

Core Viewpoint - The U.S. tariff policy is causing a "disaster state" in Lesotho and potentially across Africa, disrupting a previously beneficial trade relationship that provided jobs and income stability [1][3]. Group 1: Impact on Lesotho - Lesotho's textile manufacturing sector, which heavily relies on U.S. market demand, is facing factory closures and job losses due to new tariffs, leading to a spike in unemployment [3]. - The U.S. has imposed a 15% tariff on Lesotho, with similar tariffs affecting nearly 20 other African countries, including a 30% tariff on South Africa and 25% on Tunisia [3]. Group 2: Trade vs. Aid - The article argues that trade, rather than aid, is essential for poverty alleviation in Africa, a principle supported by bipartisan U.S. policy through the African Growth and Opportunity Act (AGOA) [4]. - AGOA, enacted in 2000, significantly increased non-oil exports from sub-Saharan Africa to the U.S., growing from approximately $8 billion to nearly $40 billion [4]. Group 3: Criticism of AGOA - Critics point out that AGOA has limitations, as only 32 out of 54 African countries qualify for duty-free exports, and the benefits are concentrated in a few nations [5]. - There are concerns that AGOA is not mutually beneficial, as many African countries are too poor to purchase more U.S. goods, limiting the program's effectiveness [5]. Group 4: Trade Deficits and Economic Growth - The U.S. has trade deficits with several African nations, including $234 million with Lesotho, which is seen as a sign of successful cooperation that helps develop local industries and create jobs [6]. - The article suggests that trade deficits can lead to economic prosperity in Africa, contrasting with the limitations of aid [6]. Group 5: Future of AGOA - AGOA is set to expire unless Congress approves its renewal, raising concerns that its expiration could allow other countries to increase their influence in Africa and lead to higher prices for U.S. consumers [6].

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The Fed is likely to cut interest rates in September, and the market is focusing on pricing the rate cut amplitude. Inflation pressure will limit the scope of this rate cut [3][4][13]. - China's "dual discount interest" policy has been implemented to boost domestic demand, and the probability of a domestic interest rate cut in the third quarter has further decreased [5][6]. - China's economic data in July was affected by multiple factors, but it is still likely to achieve the annual economic growth target of 5% [8][10][12]. - In the short - term, geopolitical risk premiums have temporarily ended, but there are still persistent impacts. A - shares are in a bull market pattern, but the index may experience short - term corrections. Bond prices will be in a low - level shock state [15][16]. Summary by Directory 1. This Week's Macroeconomic Observation 1.1 Impact of Tariffs on Inflation and Fed Rate Cut Expectations - US CPI in July was slightly lower than expected, but core CPI reached a new high for the second time this year. PPI exceeded expectations, with a 0.9% month - on - month increase, the largest in three years, and a 3.3% year - on - year increase, the highest since February [3]. - The impact of tariffs on commodity prices is gradually emerging, and the upward pressure on commodity inflation will continue to accumulate. The price of the service industry in July significantly contributed to inflation, and the pressure on CPI to rise in the coming months is increasing [3][4]. - Although inflation data shows signs of an uptick, the Fed is likely to cut interest rates in September. The market is focusing on pricing the rate cut amplitude, and inflation pressure will limit the scope of this rate cut [4]. 1.2 Implementation of the "Dual Discount Interest" Policy to Expand Domestic Demand - The "dual discount interest" policy of personal consumer loan discount interest and service industry business entity loan discount interest has been launched, which forms a synergy to stimulate consumption with other policies. It helps improve the efficiency of fiscal funds [5]. - In the future, the policy may continue to explore the synergy between fiscal funds and financial resources, and the weight of structural tools and special fiscal policies may increase. The probability of a domestic interest rate cut in the third quarter has further decreased [5][6]. 1.3 China's Economic Situation in July - China's economic data in July showed a contraction in both supply and demand, with a more obvious slowdown in domestic demand. Consumption recovery momentum weakened marginally, investment remained weak, and financial data also showed slow demand - side repair [8][10][11]. - Although China's economy is affected by multiple temporary factors in the short - term, it is still likely to achieve the annual economic growth target of 5% [12]. 1.4 Next Week's Key Points - The Fed is likely to cut interest rates in September, and the market is pricing the rate cut amplitude. Inflation pressure will limit the scope of this rate cut [13]. - The short - term geopolitical risk premium from the US - Russia summit has ended, but there are still persistent impacts. A - shares are in a bull market pattern, but the index may experience short - term corrections. Bond prices will be in a low - level shock state [15][16]. 2. Domestic Key Events and Important Economic Data - The central bank will implement a moderately loose monetary policy, aiming to maintain liquidity, promote reasonable price increases, and release consumption potential. This week, the central bank achieved a net withdrawal of 4149 billion yuan [17]. - The "dual discount interest" policy has been introduced, with a 1 - percentage - point annual discount interest rate. The personal consumer loan discount interest policy has a cumulative discount interest cap of 3000 yuan per borrower, and the service industry business entity loan discount interest policy has a maximum loan scale of 1 million yuan per household [17]. - China's deflation pressure eased slightly in July. CPI was flat year - on - year, PPI was negative for 34 consecutive months, but the month - on - month decline narrowed. Core CPI increased by 0.8% year - on - year, the highest in 17 months [17]. - In July, the added value of industrial enterprises above designated size increased by 5.7% year - on - year, and social consumer goods retail sales increased by 3.7% year - on - year. The "national subsidy" funds of 138 billion yuan were issued, and the automobile sales volume increased by 14.7% year - on - year [17][18]. - From January to July, national fixed - asset investment increased by 1.6% year - on - year, and real estate development investment decreased by 12.0% year - on - year. The sales prices of commercial residential buildings in 70 large and medium - sized cities decreased month - on - month, and the year - on - year decline narrowed overall [18]. - China and the US suspended the implementation of 24% tariffs for 90 days. As of the end of July, M2 increased by 8.8% year - on - year, M1 increased by 5.6% year - on - year, and M0 increased by 11.8% year - on - year [18]. 3. Overseas Key Events and Important Economic Data - In the US, the PPI in July increased significantly, with a 3.3% year - on - year increase. CPI was flat compared to the previous month, slightly lower than expected, while core CPI reached a five - month high, higher than expected [19]. - After the release of the US CPI data, the probability of the Fed cutting interest rates in September rose to 90.1%. Trump nominated E·J·Anthony as the next director of the Bureau of Labor Statistics and expanded the list of candidates for the Fed chairman [19]. - The EU plans to formulate the 19th round of sanctions against Russia and provide more military assistance to Ukraine. The Japanese central bank is under pressure to abandon an inflation indicator to pave the way for an interest rate hike [19]. - Trump said he would not impose tariffs on gold. The US Treasury Secretary said that the trade team will meet with China in the next two or three months. The US - Russia summit has not reached an agreement but is close [20]. 4. Next Week's Key Data/Events - On August 18, the US will release the NAHB housing market index for August. - On August 20, China will release the one - year and five - year loan prime rates (LPR) for August, and the eurozone will release the CPI and core CPI year - on - year and month - on - month for July, as well as the preliminary PMI values for August. - On August 21, the US will release the number of initial jobless claims for the week ending August 16, the Markit manufacturing, service, and composite PMI preliminary values for August, and the year - on - year total of existing home sales in July. - From August 22 to 23, the Jackson Hole Global Central Bank Annual Meeting will be held (to be determined). [21]

Core Viewpoint - The recent increase in tariffs on 407 derivative products related to steel and aluminum by the Trump administration is a strategic move aimed at protecting domestic industries while also serving political interests in an election year [1][3]. Group 1: Tariff Impact on Industries - The newly added 407 products include items closely related to steel and aluminum, such as alloy wheels for cars and cold-rolled steel sheets for appliances, effectively extending the tariff to a wide range of industries [3]. - Domestic automotive manufacturers that previously relied on imported specialty steel will face increased costs, potentially leading to reduced profit margins or price hikes for consumers [3]. - The tariffs are expected to provide short-term benefits to U.S. steel and aluminum companies, increasing their orders and production [4]. Group 2: Political and Economic Context - The stated purpose of the tariffs is to protect the struggling domestic steel and aluminum industries, which have been facing low capacity utilization rates [3]. - The tariffs may also be a strategic move to secure votes from workers in the "Rust Belt," a key demographic for Trump, as increased orders could lead to job stability [3]. - European countries have threatened retaliatory tariffs on U.S. agricultural products, which could impact U.S. exports of soybeans and corn, indicating a potential escalation in trade tensions [3]. Group 3: Investment Opportunities - Investors should monitor U.S. steel and aluminum companies that may benefit from the tariff-induced demand increase, but caution is advised regarding the sustainability of this policy [4]. - Companies with manufacturing facilities in Mexico or Canada that can circumvent tariffs by processing materials before exporting to the U.S. may find new opportunities [4]. - High-end steel and aluminum manufacturers in China could gain market share in Southeast Asia and South America if they can enhance their technological competitiveness [4]. Group 4: Long-term Investment Strategy - Trade tensions are likened to a prolonged arm-wrestling match, suggesting that investors should focus on companies with strong technology and market presence rather than getting caught up in tariff fluctuations [5].