Trump says he'll have to ‘take a look' at deporting Elon Musk
'I don't know,' Trump told reporters at the White House on Tuesday when asked if he would deport the South African-born entrepreneur and US citizen, before adding that 'we'll have to take a look.'
The president's comments are the latest salvo in a renewed feud between Trump and the world's richest person, who has ramped up his criticism of a Republican tax bill that expedites the end of a consumer credit for electric vehicle purchases. Musk is the CEO of electric carmaker Tesla Inc., whose shares weaken more than 4% in premarket trading.
Trump has attributed Musk's opposition to the bill to elimination of subsidies that his many business ventures benefit from. Earlier Tuesday, Trump took to social media, threatening to withdraw subsidies from Musk's companies, a warning he reiterated to reporters.
The president said Musk was 'losing his EV mandate' and added that 'Elon could lose a lot more than that.'
The EV mandate generally is a reference to a suite of fuel economy standards and tailpipe-pollution limits that effectively compel automakers to sell an increasing number of electric models.
The administration has moved to unwind those policies, which are untouched by the measure pending in the Senate. However, the tax-and-spending measure would end a tax credit for individual electric vehicle purchases that has helped boost EV sales.
Musk has lambasted the Republican legislation, calling it an 'insane spending bill' and threatened to help create a third political party in the US. He has denied, however, that his opposition is based on preserving government subsidies for his companies.
Musk threw his support behind Trump in the 2024 election and went on to serve as the head of the Department of Government Efficiency effort that worked to slash the federal government's workforce and responsibilities before departing in late May.
The two had a public falling out over Musk's criticisms of the tax bill, trading insults on social media. While that fight appeared to have cooled, Musk in recent days has posted repeated attacks on the legislation, reigniting their fight. –BLOOMBERG
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The Star
2 hours ago
- The Star
Bonded to interest rates
PETALING JAYA: The strong demand for ringgit-denominated bonds among foreign investors who have shifted their portfolio to minimise risks from US president Donald Trump's policies will depend on the trajectory of central bank monetary policy going forward, say bond specialists. Experts said that if the US Federal Reserve (Fed) decides to maintain the benchmark US interest rate while Bank Negara cuts the overnight policy rate (OPR) to support the domestic economy leading to widening yield differentials between US and Malaysian government securities (MGS), then investors chasing yields could shift their focus back to US treasuries (UST). Bond yields represent the rate of return an investor receives on a bond upon its maturity. The Fed maintained the benchmark interest rate at the 4.25% to 4.5% range in the May meeting as the US central bank sees the economy growing at a modest pace, with inflation slightly above its 2% target. Bank Negara has also held the OPR steady at 3% in its recent meeting, but reduced the statutory reserve requirement (SRR) to 1% from 2% that resulted in the release of an additional RM19bil in liquidity into the banking system to support the economy. However, despite the SRR decision, experts said there was still a high risk for an OPR cut in the second half of the year. In comparison, the bond yield spread between the 10-year UST and the 10-year MGS stood at 0.84% on June 5, 2025, based on the Bond Pricing Agency Malaysia's (BPAM) data. The 10-year UST on that date was at 4.40% and the 10-year MGS was at 3.56%. BPAM chief executive officer Meor Amri Meor Ayob told StarBiz several challenges could weigh on the ringgit bond market in 2025, with US monetary policy being one of them. 'UST continues to offer relatively higher yields compared to MGS, which may limit the appeal of MGS going forward. 'Moreover, with growing expectations that Bank Negara may cut the OPR in the second half of the year, yield differentials could widen further, potentially dampening foreign appetite for ringgit-denominated bonds. 'If the Fed maintains the current interest rates while Bank Negara cuts its OPR, the widening yield between the UST and MGS differential could reduce the attractiveness of Malaysian bonds to foreign investors and put pressure on the local ringgit,' he added. Meor Amri said another challenge lies in geopolitical uncertainties, especially around US trade policies under President Trump's administration, which could trigger market volatility and risk-off sentiment. He said the recent surge in foreign demand for ringgit bonds in March and April 2025 was driven by uncertainty surrounding President Trump's flip-flopping tariff policies and his proposed 'One Big Beautiful Bill'. These developments have prompted some bond investors to reduce their exposure to UST and seek diversification in emerging market assets such as MGS, he noted. Foreign net buying of Malaysian bonds surged to RM10.2bil in April this year compared to RM3.2bil in March, marking the second consecutive month of net inflows, despite 'Liberation Day' tariffs announced on April 2, 2025. The increase was primarily driven by strong demand for MGS and government investment issues (GII), which attracted RM9.7bil of inflows (March inflow: RM3bil), as well as the shorter-term Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (MITB). OCBC Bank (M) Bhd head of global markets Stantley Tan said the future demand from foreign investors for ringgit-denominated bonds would largely depend on a variety of macroeconomic and domestic factors. Since the onset of 2025, he said global economic uncertainties have escalated, primarily due to rising geopolitical risks and inconsistencies in US tariff policies. He said the imposition of substantial trade tariffs by the United States on its trading partners has disrupted global trade flows and increased the risk of a recession, particularly within the United States. As trade negotiations continue, investors have also rebalanced their portfolios, reallocating investments towards emerging markets and economies less impacted by the tariff conflicts. 'On the domestic front, Bank Negara has reiterated its confidence in the resilience of Malaysia's economy, which is fundamentally supported by robust domestic demand. 'However, the tone of the monetary policy committee (MPC) statement has shifted from cautious optimism to a neutral-dovish stance, reflecting the heightened external risks. 'In its latest meeting, the MPC reduced the SRR by 1% to provide additional liquidity support to the economy,' Tan said. He said the ringgit bond market has started to price in the possibility of a policy rate cut in the coming months following the central bank's slightly dovish tone. However, he said the risks to the current bond valuations remain, particularly if the economy proves resilient, prompting Bank Negara to hold policy rate steady, which could lead to a repricing of the bond market. 'A significant fiscal improvement by the government could mitigate the risk of a sell-off by easing the supply of MGS and GII in future issuances. Additionally, external risks may arise from the potential resolution of the US fiscal situation, which is currently under intense scrutiny by global investors. Should the US fiscal outlook improves, there is a possibility that investors may shift back to safe-haven assets, resulting in potential outflows from emerging markets including Malaysia,' Tan noted. RAM Rating Services Bhd economist Nadia Mazlan said foreign investor appetite for Malaysian bonds may continue to be under pressure in 2025 amid continued heightened uncertainties arising from US protectionist trade policies. She said the 'risk-off' sentiments among investors at the start of the year and at the onset of the 'Liberation Day' tariffs have already triggered a sell-off across both the equity and bond markets, including in Malaysia. Nadia said while there was some temporary reprieve from the postponement of higher reciprocal tariffs and signs of easing US-China trade tensions, which contributed to the net inflows in March and April, the continued unpredictability of US policies may still haunt global investors. 'The continued easing of market volatility recently may help support investor appetite for risker emerging market bonds in the short term, but it may be capped by the still-elevated uncertainties, especially as the 90-day pause on higher reciprocal tariffs is nearing its end. 'The potential future volatility from other proposed tariffs will likely leave foreign investors teetering on the edge,' she said. However, she said a tapering yield differential between the UST and MGS may help buoy some foreign demand for domestic bonds this year. 'With the Fed widely expected to reduce the federal funds rate in the face of slower economic growth, Bank Negara is expected to keep its OPR at 3%. This could help compress the UST-MGS yield spread, which should increase the appeal of Malaysian bonds and strengthen the ringgit this year. 'The country's strong economic fundamentals and prudent fiscal discipline also play important roles in making the country an attractive investment destination. 'Therefore, maintaining stable and effective domestic policies is essential to strengthening foreign investor confidence while ongoing improvements in fiscal metrics could further support demand for Malaysian bonds,' Nadia added.
The Star
2 hours ago
- The Star
Singapore and Cambodia to expand collaboration in renewable energy, carbon markets and agri-trade
SINGAPORE: Singapore and Cambodia will deepen their collaboration in several areas, including renewable energy, high-quality carbon credits and trade in food products, as the two countries mark 60 years of diplomatic relations. Prime Minister Lawrence Wong said this on Wednesday (July 2) in the Cambodian capital of Phnom Penh, the latest in his series of introductory visits to Asean capitals. At a luncheon hosted by Cambodian Prime Minister Hun Manet at the Peace Palace, PM Wong thanked Manet for his invitation to visit and said the two countries' relationship had continued to grow from strength to strength over the last 60 years. 'Our ties... were built on the strong foundation laid by then-Prime Minister Lee Kuan Yew and His Majesty King-Father Norodom Sihanouk,' PM Wong said in a toast speech. 'It is a foundation of mutual respect, trust and friendship that continues to guide our relationship today.' He noted that Singapore is one of Cambodia's largest investors and trading partners. In 2024, the Republic was Cambodia's third-largest foreign investor, with bilateral trade between the countries increasing 7.1 per cent year on year to S$4.83 billion. During his visit, PM Wong called on Cambodian King Norodom Sihamoni at the Royal Palace. He also called on Senate President Hun Sen. At his meeting with Manet, the two leaders discussed several priority areas of cooperation. The first such area is renewable energy, in which the two countries' cooperation will help build a greener and more interconnected Asean, said PM Wong. He cited a project for Singapore to, which will be a key building block towards an Asean Power Grid. The plan is for the grid to link up the electricity networks of the group's member countries and enable cross-border power trading by 2045. Some progress has already been made on this front, with Singapore's Keppel having inked a pact in 2023 with Cambodia's Royal Group Power for the long-term import and sale of 1 GW of low-carbon electricity. In the area of high-quality carbon credits, the countries are working together on an implementation agreement for an earlier memorandum of understanding. 'This will mobilise financing for clean-energy projects, uplift rural communities and improve livelihoods, while enabling both our countries to hit our net-zero goals,' said PM Wong. PM Lawrence Wong at a luncheon hosted by his Cambodian counterpart, Hun Manet, at the Peace Palace in Phnom Penh on July 2, 2025. - Photo: ST With Cambodia being a key agricultural exporter and Singapore importing almost all its food, the two countries will also deepen their cooperation in this field. 'We are also keen to diversify our sources of food imports, so closer collaboration in this area will be mutually beneficial for both our countries,' said PM Wong. Both countries also agreed to continue working to strengthen Asean centrality and unity, to keep the grouping relevant and advance the region's collective interests. 'In this uncertain global environment, it is more important than ever for Asean to stay cohesive, uphold open channels of dialogue, and work together to resolve our differences peacefully,' said PM Wong. He added that Singapore and Cambodia continue to be steadfast partners in human development, with nearly 19,000 Cambodian officials having received training in areas like public health, digital governance and public administration under the Singapore Cooperation Programme (SCP). Much of this training is conducted right in Phnom-Penh at the Cambodia-Singapore Cooperation Centre, noted PM Wong. The centre is one of three Singapore Cooperation Centres that the SCP has been operating since the Initiative for Asean Integration was launched under Singapore's chairmanship of Asean in 2000. The other centres are in Laos and Vietnam. PM Wong said Cambodia has made remarkable strides over the past six decades to transform from a post-conflict society to a rapidly developing nation, and that under Manet's leadership it has charted an ambitious strategy to become a high-income nation by 2050. 'Singapore will continue to walk alongside Cambodia in this development journey,' he said. He added: 'I am confident that with Prime Minister Manet's support and leadership, we will continue to deepen our bilateral partnership and expand our cooperation for win-win outcomes, and deliver meaningful benefits for both our people.' - The Straits Times/ANN
The Star
2 hours ago
- The Star
Trump's 35% tariff threat feeds Japan's worst-case scenario fear
US President Donald Trump threatened Japan with tariffs of up to 35% as he ramped up tensions for a third straight day, fueling fears of a worst-case scenario among market players and raising doubts over Tokyo's tactics in trade talks. Japan should be forced to "pay 30%, 35% or whatever the number is that we determine, because we also have a very big trade deficit with Japan,' Trump said, again flagging the possibility that across-the-board tariffs could go much higher than the 24% initially penciled in for July 9. "I'm not sure we're going to make a deal. I doubt it with Japan, they're very tough. You have to understand, they're very spoiled.' Market participants and analysts warned against taking Trump's comments at face value and suggested that some kind of deal will eventually get done. But they also warned that Prime Minister Shigeru Ishiba's government may need to change tack from a friendly and firm stance that is now leading the two sides to brinkmanship. "There is some risk of a US tantrum that results in higher punitive actions by Washington this month,' said Kurt Tong, a former senior US diplomat in Asia who's now a managing partner at the Asia Group. "If that happens, Japan may have no choice but to hit back with its own specific countermeasures.' Trump's latest threat fits in with a high-pressure deal-making strategy that sometimes results in big last-minute concessions on both sides, as seen with China, but market players still need to game out how to position themselves should talks founder. While few analysts see Japan's stocks collapsing on a no-deal scenario, some of them forecast the Nikkei 225 to fall into the 38,000 range, a decline of more than 4%, rather than rallying above 40,000 if there's an agreement. The Nikkei 225 edged down 0.6% to close at 39,762 on Wednesday while the yen was trading at 143.88 against the dollar, down around 0.3%. Japan has so far stood firm in negotiations over across-the-board reciprocal tariffs, insisting that they be removed along with additional sectoral tariffs on autos, steel and aluminum. The car duties are particularly painful for Japan as the industry contributes the equivalent of almost 10% of gross domestic product and employs around 8% of the workforce. Tokyo has insisted that a "win-win' deal must encompass all the tariffs in one go with Ishiba preferring no deal to a bad deal ahead of a July 20 upper house election. The prime minister on Wednesday reiterated his view that focusing on jobs and investment in the US was the way forward, just like it was for Nippon Steel as it patiently sought to change Trump's view and take over US Steel. "Japan is the biggest global investor in the US and the world's biggest contributor to US jobs,' Ishiba said in Tokyo on Wednesday. "That means Japan is different from other countries.' But as July 9 gets closer, some observers say more needs to be done to convince the US to back off. "We have to work on Trump himself, to first try to avoid the tariffs to be imposed from July 9,' said Ichiro Fujisaki, former Japanese ambassador to the US, adding that the president's remarks show that Tokyo hasn't brought enough to the table yet. "We don't have something like rare earths but the US is dependent on Japanese industry as well. About half of materials for making semiconductors come from Japanese industry,' Fujisaki said, pointing to a possible area of leverage, too. In the meantime, market players are evaluating the potential scale of the fallout. "There is a lot more risk of things falling apart than is being priced in by the market,' said Zuhair Khan, a fund manager at UBP Investments. "There is always the risk of a policy blunder by either side.' He points to the 32,000 Nikkei level on the day Trump first announced the reciprocal tariffs. "If the probability of a no deal is 25% then the Nikkei should be at 38,000.' What Bloomberg Economics Says... "If Japan is ultimately forced to pay reciprocal tariffs at those rates, on top of the 24% rate announced on 'Liberation Day' - currently suspended at 10% - the macroeconomic fallout would be sizable. Our estimate through a model of global trade suggests a medium-term GDP hit of around 1.2%, roughly double the 0.6% drag expected under the current levy.' - Taro Kimura, economist For the full report, click here. The point of imposing a deadline in negotiations is to create an opportunity for leverage, so it's not surprising to see Trump pushing high tariffs as a threat to push for better deals as the date approaches, said Phillip Wool, head of portfolio management at Rayliant Global Advisors Ltd. "There's also an element of political theater here, as Trump's narrative to American voters is that the US has been bullied on trade for so long, and there's clearly a desire to look 'tough' on trade,' Wool said. "But there has to be a face-saving deal at some point so that it looks like the negotiation was truly a success as opposed to the mutually assured destruction of impasse and perpetually high tariffs.' Like some other market players, Wool is wary of an overly pessimistic knee-jerk response to each remark Trump makes. If there is a big selloff in a worst-case scenario, Wool sees it as a great buying opportunity for long-term, active investors. Strategists are split on how a bad scenario might play out for the yen. While some such as SBI Liquidity Market Co.'s Marito Ueda see the possibility of risk aversion sparking a strengthening of Japan's currency to the 138 range against the dollar, others see a weakening as more likely. A stalemate in trade talks would likely delay the Bank of Japan's next interest rate hike, especially if it led to tariffs of up to 35% in the meantime, said Akira Moroga, chief market strategist at Aozora Bank. Movement would slow after the 145 mark, making a push past 147 difficult, he said. Still, the consensus is that a deal will be reached sooner or later, and that Japan will have to concede more ground to achieve it. "If it's concluded I don't think it's going to be a win-win situation,' said Fujisaki. "Maybe a capital-letter 'WIN' for US, but a small letter 'win' for Japan.' --With assistance from Momoka Yokoyama, Toshiro Hasegawa, Umesh Desai, Hidenori Yamanaka, Mari Kiyohara, Aya Wagatsuma and Akemi Terukina. - Bloomberg
