Ata mārie and welcome to your Tuesday summary of international business and political news from overnight.
We start again with tariffs and multiple media outlets continue to cover events as they unfold around the world.
US President Donald Trump has threatened China with an extra 50% tariff from Wednesday if it doesn't remove its retaliatory tariffs of 34%, the Guardian reported.
“Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately. Thank you for your attention to this matter!” Trump wrote.
Meanwhile, the European Commission proposed counter-tariffs of 25% on a range of US goods in response to Trump’s tariffs on steel and aluminium, Reuters reported.
The tariffs on some goods would come into effect on May 16 and others later in the year. The goods included diamonds, dental floss, sausages, nuts, and soybeans, the Guardian noted.
Bourbon, wine, and dairy were removed from the original list. Some countries, including France and Ireland, had asked for bourbon to be dropped from the list, after Trump threatened 200% tariffs on French wine and champagne.
Meanwhile, the bloodbath on global sharemarkets continued overnight. The BBC reported European markets initially plunged on opening but then recovered some ground.
Al Jazeera reported Hong Kong’s sharemarket suffered its worst one-day decline in about three decades amid the wave of panic selling. The benchmark Hang Seng Index closed down 13% on Monday local time.
It followed another negative session on the local NZX50 index yesterday, with NBR reporting it was the largest single-day fall since March 2020.
The Top 50 Index closed down 449 points, or 3.7%, to 11,776 with $158.4 million worth of shares changing hands. The broader market was down by as much as 3% in early trading and continued to deteriorate over the course of the day.
The NZX is now in correction territory – when a stock index falls more than 10% – having fallen 11.3% since its high on December 30.
US President Donald Trump.
Over the Ditch, the ABC’s business editor Michael Janda assessed implications for the local ASX200 index, after about A$110 billion of value was wiped from listed companies yesterday.
He said the 4.2% slump for Australia's index followed the 2.4% decline on Friday. “I'm not sure what it says about Aussie traders that they had the chance to react first to Donald Trump's tariff announcement, and Thursday's local consensus appeared to be broadly, ‘meh, not too much to see here’.
“Or maybe they're just quietly confident Australia will continue to be the lucky country, which global financial catastrophes recently appear to have largely bypassed,” Janda said.
Meanwhile, Bill Ackman – a billionaire backer of Trump – urged the president to pause the tariffs, or risk "a self-induced economic nuclear winter," the BBC reported.
Ackman said the president should take three months to allow countries to renegotiate their trading relationships with the US. Trump had said: "Sometimes you have to take medicine to fix something."
Ackman acknowledged Trump’s argument that global trade had "disadvantaged" the US. He said the tariffs that Trump had imposed were "massive and disproportionate".
CNBC also reported on comments from BlackRock chief executive Larry Fink, who said a number of key business leaders thought the US economy was already in a significant downturn.
“Most CEOs I talk to would say we are probably in a recession right now. One CEO specifically said the airline industry is a proverbial bird in a coal mine – canary in the coal mine – and I was told that the canary is sick already,” Fink said.
He said the tariffs could put upward pressure on inflation and make it difficult for the Federal Reserve to cut interest rates. “This notion that the Federal Reserve is going to ease four times this year, I see zero chance of that. I’m much more worried that we could have elevated inflation that’s going to bring rates up much higher than they are today.”
BlackRock CEO Larry Fink.
And finally, global vehicle manufacturer Stellantis has hired McKinsey & Co for strategic advice on luxury brands Maserati and Alfa Romeo, amid the trade tariff war, Bloomberg reported.
Chair John Elkann asked the consulting firm to assess options for the brands, including partnering with manufacturers for new technology, according to sources.
“McKinsey has been asked to provide its considerations regarding the recently announced US tariffs for Alfa Romeo and Maserati,” a spokesperson confirmed.
Trump’s 25% automotive tariffs threatened to slash billions of euros off Stellantis’s earnings. The company had been offering discounts in the US to ease fears that the levies could make its cars more expensive, Bloomberg noted.
