Foreign trade headlines of the week | Trump once again brandishing the tariff stick Biden: think twi

Mr Trump said he would sign a series of executive orders on the day he became president, imposing a 25 per cent tariff on all Mexican and Canadian products entering the US. Biden wants him to "reconsider." Trump nominated billionaire George Bessant, a former chief investment officer of Soros Fund Management, to be Treasury secretary.

The dollar is heading for its biggest weekly loss in three months as investors start to rethink the so-called Trump trade. The core PCE, an inflation measure watched by the Fed, rose 2.8 percent from a year earlier, supporting recent comments by many officials that they are in no hurry to cut rates.

Musk, who will head the "Government Efficiency Department," said he wants to streamline government departments. He has previously spoken out in favor of cutting the number of federal agencies by about 75 percent, saying that "99 would be enough" out of about 428 agencies. Zuckerberg, who has always had a strained relationship with Trump, was also rumored to have dined with the president-elect at Mar-a-Lago.

[News of the week] Trump wielded the tariff stick, Biden shouted to think twice, Canada threatened retaliation

Us President-elect Donald Trump said on Monday (November 25) that he will sign a series of executive orders on the day he takes office, imposing 25% tariffs on all products coming into the United States from Mexico and Canada. In addition, Trump has said that he will impose a 10% tariff on all goods imported from China.

Trump claimed the tariffs were aimed at forcing Canada and Mexico to tighten border controls to curb illegal immigration and the flow of drugs into the United States. He said the tariffs would remain in place until Canada and Mexico resolve these issues.

Trump's announcement triggered a rally in the U.S. dollar and a plunge in the Canadian dollar and Mexican peso. The dollar rose 1% against the Canadian dollar and 2% against the Mexican peso. The Canadian dollar fell to its lowest point in years.

Trump's move was particularly shocking to Canada, because before this, the Canadian government had frequently expressed loyalty to Trump, "backstabbing" Mexico, declaring that it was "concerned" about Chinese investment in Mexico, and hyping the renewal of the "United States-Mexico-Canada Trade Agreement" (USMCA).

On Monday evening local time, Canadian Prime Minister Justin Trudeau spoke with Trump by phone after Trump's tariff threat. Trudeau said he had a good call with Trump in which he laid out some facts, discussed the close and effective ties between the two countries and some of the challenges that can be addressed together. Trudeau said that the Canadian side will present facts and reason, and move forward in a constructive way, which requires certain efforts.

On Wednesday, Trudeau held an emergency virtual meeting with Canadian provincial leaders, who want Trudeau to negotiate a bilateral trade deal with the United States that does not include Mexico.

On November 28, a senior Canadian official warned that Canada was already studying the possibility of imposing retaliatory tariffs on certain products from the United States.

Canadian officials have warned that the tariffs will have a very serious impact on both countries. Canada is the number one export destination for 36 US states. Goods and services worth C $3.6 billion ($2.7 billion) cross the border every day. About 60% of U.S. crude oil imports come from Canada, and 85% of U.S. electricity imports (99.86, -0.03, -0.03%) come from Canada. In addition, Canada is the largest foreign supplier of steel, aluminum and uranium to the United States, and owns 34 critical minerals and metals that the Pentagon urgently needs and invests in for national security.

Mexican President Simbaum said her government was already working on a list of possible retaliatory tariffs "should the situation come to that." But she said she spoke with Trump and "had a very good conversation." Trump later confirmed he had spoken with Shinbaum and said she had agreed to stop illegal immigrants from entering the United States through Mexico, "effectively closing our southern border." Hinbaum was quick to respond, saying that "Mexico's position is not to close the border, but to build Bridges between the government and communities."

On Thursday, US President Joe Biden said he hoped Trump would reconsider plans to impose tariffs on Mexico and Canada, saying it could "undermine" relations with close Allies.

Speaking to reporters on Nantucket Island, Massachusetts, Biden said: "I hope he reconsiders. I think that would be counterproductive." He was spending the Thanksgiving holiday with his family.

"The United States is in an unusual situation where we are surrounded by the Pacific Ocean, the Atlantic Ocean and our two Allies, Mexico and Canada. The last thing we need to do is start messing up those relationships." Biden added.

As for Europe, European Central Bank President Christine Lagarde said on Thursday that the EU could be in a stronger position if it negotiated potential trade tariffs with the United States rather than taking immediate countermeasures.

Lagarde reiterated earlier warnings about the negative impact of a full-blown trade conflict and said "we can offer to buy certain things from the United States and send a signal that we are ready to come to the table and see how we can work together."

"I think this is a better scenario than a purely retaliatory strategy, which could lead to a tit-for-tat process where no one really wins," Ms Lagarde said, according to a transcript of the interview posted on the ECB's website.

Musk, do it! The announcement of the "layoff list" of public officials began to worry

Us President-elect Donald Trump has announced that he will create a Department of Government Efficiency (DOGE) to reduce bureaucracy in the US federal government. On November 27, Speaker of the US House of Representatives Mike Johnson said that American entrepreneur Elon Musk and former Republican presidential candidate Vivek Ramaswamy will travel to Capitol Hill on December 5 to discuss major reform ideas with House and Senate Republicans "to achieve regulatory rollback, administrative cuts and cost savings."

And Musk seems to be acting like he can't wait. According to the US "Washington Post" reported that one of the heads of the "government efficiency Department", American billionaire Elon Musk has taken aim at the US Consumer Financial Protection Bureau (CFPB), calling for the elimination of the agency.

On the 27th, Musk posted on the social platform X that he owns: "Repeal the CFPB. There are too many duplicate regulators. The CFPB was created in 2011 as an agency created by the U.S. government in the wake of the financial crisis to protect Americans from unfair, fraudulent or predatory financial practices. Since its inception, the CFPB's enforcement actions have resulted in more than $19 billion in compensation for American consumers and a range of penalties against financial institutions and technology companies that allegedly mishandled Americans' money. The Washington Post noted that unlike other federal agencies, the CFPB is funded by grants from the Federal Reserve, an arrangement designed to protect the agency from political battles and industry lobbying. The CFPB's regulation has often angered large US banks, credit card companies and loan companies, and has been repeatedly sued for "excessive regulation".

In addition, a CNN report on November 27 said that when President-elect Trump said that Elon Musk and Vivek Ramaswamy proposed deep cuts in federal government spending, a number of public officials began to panic. He has spoken out in favor of cutting the number of federal agencies by about 75 percent, saying that "99 would be enough" out of about 428 agencies.

Last week, in a series of daily posts, Musk retweeted two posts on the social platform X, revealing the names and titles of four previously unknown climate-related government employees. Each post gets millions of hits, and those named are subjected to a barrage of negative attention. At least one of the four women named has logged out of their social media accounts.

While Musk's posts about government jobs are available through public online databases, they are aimed at relatively unknown government employees who do not deal directly with the public. Several current federal employees said they feared their lives would be changed forever, including physical threats, as Musk turned behind-the-scenes officials into personal targets.

On Sunday, Musk also criticized manufacturer Lockheed Martin's F-35 legacy fighter jet. Elon Musk retweeted a video of Chinese drone swarms on social media platform X, tweeting: "Meanwhile, some idiots are still building manned fighter jets like the F-35." On the 25th, Musk further explained in a post: "The F-35 design has a problem at the demand level, because it needs to meet too many requirements of too many people." "And in the drone age, manned fighter jets are obsolete. It just kills the pilot."

Drones play an important role in the military, and the U.S. military is investing in a variety of drone and unmanned technologies. In response to Musk's comments, Lockheed said: "The F-35 is the most advanced and survivable fighter in the world, a critical deterrent and the cornerstone of joint, all-domain warfare." However, these statements to defend the fighter jet seem to have little effect. Lockheed shares fell nearly 4% in intraday trading on Monday. Meanwhile, President Trump's son Donald Trump Jr. has agreed to become an adviser to Unusual Machines, a maker of small drones. Unusual Machines shares surged 155% in five days.

[Weekly market] The "Trump trade" stalled, and the dollar suffered its biggest weekly decline in three months

On Friday, November 22, local time, U.S. President-elect Donald Trump nominated billionaire George Bessant, who once served as the chief investment officer of Soros Fund Management, to serve as Treasury secretary. After the nomination was announced, investors responded positively, and the market quickly shifted from the "Trump trade" that had been going on for some time to the "Besent trade."

On Monday (November 25) in New York, US Treasury bond yields fell across the board, of which the US 10-year Treasury bond yield, known as the "anchor of asset pricing", plunged more than 14 basis points, pushing the dollar down nearly 70 points to below 107, and major currencies such as the euro, yen, and sterling rose significantly.

Meanwhile, European and U.S. stocks rose, with the Dow up nearly 0.9% among the three major U.S. indexes.

Bessant is widely seen as a pro-market person who supports tax cuts and deregulation, has more pragmatic views on tariffs, and is a budget hawk, so the dollar cooled after the nomination was announced.

The dollar index DXY had its biggest weekly decline in three months. The dollar has weakened against all other G10 currencies this week, with the biggest drop against the yen.

"Pressure on the yen to strengthen is building against the backdrop of expectations that the Bank of Japan will raise interest rates at its December meeting," Yujiro Goto, head of FX strategy at Nomura Securities, wrote in a note.

He also pointed out that "the momentum of the Trump trade has also come to an end, the pressure on the strengthening dollar has eased, and the yen has been favored in the dollar selling session."

Mingze Wu, currency trader at StoneX Financial in Singapore, said: "The market is still trying to find the direction of the US dollar. "We expect the dollar to move sideways until Trump is sworn in in January, with more clarity once he announces his policies."

Fed minutes: Officials favor a gradual approach to future rate cuts

Minutes of the Fed's latest monetary policy meeting showed that officials generally supported a cautious approach to future rate cuts while the economy remained solid and inflation slowly cooled.

According to the minutes of the Federal Open Market Committee's Nov. 6-7 meeting, "Participants anticipated that if data came in roughly in line with expectations, inflation continued to decline toward 2 percent and the economy remained near full employment, a gradual shift to a more neutral stance of policy over time would likely be appropriate."

The Fed cut interest rates by 50 basis points in September and earlier this month cut its benchmark rate by 25 basis points to a range of 4.5 percent to 4.75 percent.

Federal Reserve Chairman Jerome Powell said earlier this month that the economy was not sending any signals that it needed to rush to lower interest rates. Fed officials will hold their last policy meeting of the year on Dec. 17-18.

Policymakers at their November meeting also cited a lack of clarity about the so-called neutral rate as a reason for caution. The neutral interest rate is the level of policy that neither restricts nor stimulates economic growth.

According to the minutes released in Washington on Tuesday, many officials said uncertainty complicated the assessment of how restrictive monetary policy was, which they believed made a gradual easing appropriate.

Fed officials' projections for the neutral rate have risen steadily over the past year, but it remains unclear how close rates are to that level.

The minutes also showed that Fed officials were considering a "technical adjustment" to the rate on the overnight reverse repurchase facility.

Labor market

Policymakers saw downside risks to employment and growth as having "diminished somewhat." The minutes showed officials generally agreed that the job market "showed no signs of rapid deterioration."

U.S. payrolls data for October were buffeted by severe hurricanes and widespread strikes, but the broader picture points to a cooling but still solid labor market with low unemployment and limited layoffs.

On inflation, officials said price increases had come down significantly from their peak, but noted that core measures, which exclude food and energy, remained "somewhat elevated".

"Participants indicated that they continued to believe that inflation was moving sustainably toward 2 percent, although a few officials noted that this process might take longer than previously anticipated," according to the minutes.

Investors have scaled back expectations that the Fed will cut interest rates again in December as Fed officials urge caution in light of recent firm inflation data.

South Korea's central bank unexpectedly cuts interest rates Trump's victory heightens trade risks

South Korea's central bank unexpectedly cut its benchmark interest rate in a row on Thursday, following a policy shift last month.

South Korea's central bank cut its seven-day repo rate by 25 basis points to 3 percent, a move that may be pre-emptive in response to growing trade and economic concerns following Trump's presidential election victory.

Only four out of 22 economists polled by the media predicted a rate cut. The remaining 18 expect the central bank to hold rates at 3.25 percent and assess the impact of October's first rate cut in more than four years.

The dollar rose against the Korean won for the first time in four days on the news. 10-year government bond futures rose to their highest level since March 2022.

A slowing property market, cooling inflationary pressures and slowing export growth set the stage for this week's rate cut. Tariffs are likely to rise under Trump,

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