Happy Wednesday and welcome to your morning wrap of the latest political and business headlines from around the world.
Once again we begin in the United States, where President Donald Trump’s administration has said that 104% import duties on goods from China will take effect shortly after midnight local time, Reuters reports.
Trump threatened raising the existing tariff rate on Chinese imports earlier this week unless China dropped its retaliatory duties on US goods but it did not yield.
US Treasury Secretary Scott Basset told CNBC the US held a substantial advantage in this trade war.
“I think it was a big mistake, this Chinese escalation, because they’re playing with a pair of twos. What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them.”
But financial markets seem to disagree, with Wall Street slipping into the red after surging in early trading on news that the US will begin negotiations with key allies about tariffs.
Ritholtz Wealth Management co-founder and chief executive Josh Brown told CNBC the comeback staged in early trading needed to be seen in context.
“Put today’s bounce into the entry of classic bear market bounce, because that’s exactly what you have today. When you look at the level of technical damage done, though, I think you have to conclude ‘hey, this was warranted.’ We need to exhale and take a little bit of a breath. Not every day should we be down 1,500 or 1,600 points on the Dow.”
The yield on the US 10-year bond has risen 8 basis points to 4.235% while the 2-year bond is little changed. The face value of a bond and its yield are inversely related, meaning that as the price drops (in other words, as investors sell out of bonds) the yield goes up.
Meanwhile, European markets snapped a four-day tariff-induced losing streak to finish higher this morning.
The regional Stoxx 600 closed 2.7% higher, the FTSE 100 was 2.7% higher and the DAX closed up 2.5%.
In other business news, Elon Musk has called Trump’s trade advisor, Peter Navarro, a “moron” after comments he made about his electric vehicle firm, Tesla, the BBC reports.
Musk, who is a member of Trump’s administration, also called Navarro “dumber than a sack of bricks” in posts on the social media platform X.
It was in response to an interview Navarro gave in which he called Tesla a “car assembler”, rather than a manufacturer, because of its use of foreign-made parts. Navarro made the comment as he argued that Trump's tariffs would bring back manufacturing, and the jobs and profits that go along with it, to the United States.
Musk, in his social media post, linked to a 2023 article which included findings that Tesla had the most parts produced in the US of any US car maker.
Elon Musk.
Moving to non-tariff news, at least 58 Palestinians have been killed and 214 injured from Israeli attacks in Gaza in the past 24 hours, Al Jazeera reports.
The United Nations chief António Guterres has called for unimpeded humanitarian access to Palestinians in Gaza.
“No humanitarian supplies can enter Gaza. Meanwhile, at the crossing points, food, medicine and shelter supplies are piling up, and vital equipment is stuck.”
He said Israel had obligations to ensure food and medical supplies for the population under occupation.
To the war in Ukraine, where the country’s leader, Volodymyr Zelensky, said armed forces had captured two Chinese nationals fighting with the Russian army, Associated Press reports.
He said they were two of many more Chinese members of the Russian armed forces, and accused the Kremlin of trying to bring China into the conflict.
Zelensky’s foreign minister would be contacting China for a response, he said.
The Guardian reports that a few hundred Chinese nationals are thought to be fighting as mercenaries alongside others from Nepal and central Asian countries.
