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Tag Archives: Tariffs

Contracting Factories, Curiously Rebounding Inbound Cars, And the Confirmed End of Decoupling

The US manufacturing sector may not be in as bad a shape as its German or Japanese counterparts, though it appears to be catching up on the downside. The Census Bureau reports today that new orders for all types of goods in all industries fell 1.6% year-over-year (unadjusted) in May 2019. This was the first minus sign for the broad category which includes both durable and non-durable goods manufacturing. Orders hadn’t fallen on annual basis since 2016. It is further evidence that the supply...

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Insight Conversation: Mark Gyetvay, Novatek

Mark Gyetvay, CFO and deputy chairman of the management board at Novatek, visited S&P Global Platts for an interview with senior writer for LNG, Lucie Roux. Novatek is a Russian independent gas producer known for its Yamal LNG terminal, launched in 2017, and now for its Arctic LNG projects. Last may at the Flame conference you said Novatek aims to increase production to 70 million metric tons/year by 2030. Where is the market going to be for those volumes? Are you still seeing Asia as...

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The Yuan and Tariffs

Consensus thinking sees two levers.  One is the US tariff, and the other is the weakness of the Chinese yuan. They talk as if China may be depreciating the yuan, or tolerating a weaker yuan to offset the tariffs.  This feeds the fear that China can escape from US pressure and supports those favoring an aggressive confrontation with China.   The view is both mistaken and naive.   Many observe that the yuan and the Mexico peso weakened after the US imposed or threatened to impose...

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Weighing the Week Ahead: Is there Any Sense in the Conflicting Market Messages?

The economic calendar is a big one, including the major employment reports and the ISM indexes. In normal times, this would be the theme. But these are not normal times. Fed Speakers will be on the trail with every casual utterance parsed by algorithms and traders. The debate over the most recent tariff announcement will grab headlines. And who knows what the next tweet might be? The punditry will operate with advocacy in mind. Instead, we should all be asking: Can investors make any...

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“Oh no no no I’m a tariff man”

And I think it’s gonna be a long long time‘Till tariffs come down again I’m not the man the market thinks I amOh no no no I’m a tariff man– paraphrasing Rocket Man (starts tonight) Tariff man hit me right in the gut and wallet last night.  Then the Warriors lost the first game of the NBA finals.  A night ruined. I snapped this picture on Wednesday celebrating and in gratitude for free trade.  True story.   I paid $4.99 for my last watermelon purchase.  That’s a $2.00 increase in...

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23/5/19: Winning the Trade War: Easily and Bigly

NY Fed just published some interesting numbers on President Trump's Trade War with China. Available here: https://libertystreeteconomics.newyorkfed.org/2019/05/new-china-tariffs-increase-costs-to-us-households.html, the Fed note states that per recent study "the 2018 tariffs imposed an annual cost of $419 for the typical household. This cost comprises two components: the first, an added tax burden faced by consumers, and the second, a deadweight or efficiency loss... the tariffs that the...

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EU repeal of US ethanol antidumping levy raises environmental questions

The EU’s repeal of antidumping duties on imports of US ethanol in mid-May could pave the way for increased shipments to Europe of the biofuel. European ethanol producers have raised concerns over the environmental impact of increased imports, but deeper questions over the sustainability of biofuels remain unanswered. The European ethanol association, ePURE, voiced concerns over the harmful impact of the decision on European ethanol producers, especially as other destinations for US ethanol...

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Stress Testing Apple

Goldman finally getting around to stress testing Apple as the trade war escalates.  They are out today warning Apple is in a world of hurt if China targets the iPhone maker in the trade war. The U.S.-China trade war could take a big chunk out of Apple’s bottom line if China retaliates by banning its products, according to an analyst at Goldman Sachs. Analyst Rod Hall said in a note to clients that Apple’s earnings could drop by 29% if the company’s products were banned in mainland...

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Increased trade tensions could squelch US crude flow to China

Escalation of trade tensions between the US and China is likely to further dampen US crude flows to China, at time when China was seen stepping back into the US market following a cooling-off period. Although crude oil imports are not included in the latest round of China’s tariff increases to US goods announced on May 13, the heightened tensions between the two countries has been enough to put the brakes on oil trade. “China will be wary of buying US cargoes because it could be...

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Who Pays The Tariffs?

I had some very interesting discussions on social media last night on who is paying for the U.S.-China Trade War.   It was kind of shocking that many didn’t even understand the basic tenets of economics yet have strong convictions held strongly.   Not good in the trading business. It reminded me of my days teaching frosh economics at the university and encountering the 18-year old ignoramuses who thought they were the second coming of Adam Smith, JMK, and Milton Friedman.  I must now...

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