Most Markets Down As Fed Holds And Trump Announces Fresh Tariffs
The central bank held interest rates steady and refrained from suggesting it would cut any time soon despite as he brushed off relentless pressure from the US president, with recent data indicating inflation remains elevated.
While two members of the policyboard took the rare move of dissenting and voting to cut, investors pared their bets on a reduction in September sending the dollar rallying against its peers.
The bank cited a moderation in economic activity in the first half and "solid" labour market conditions but warned "uncertainty about the economic outlook remains elevated", while inflation too is somewhat heightened.
Asked about Trump's tariff deals and whether they brought more certainty, Fed boss Jerome Powell told reporters: "It's been a very dynamic time for these trade negotiations."
He added that "we're still a ways away from seeing where things settle down".
Kerry Craig of JP Morgan Asset Management said: "With some details on baseline tariffs only just becoming clear, and many of the details of the recently agreed 'deals' still to be ironed out, the risk is that inflation rates will continue to rise in the coming months."
The latest developments on the trade front saw Trump announce a deal that sees 15 percent tariffs on South Korean goods and a commitment from Seoul to invest $350 billion in the United States.
He also said India was to face 25 percent tolls, coupled with an unspecified penalty over New Delhi's purchases of Russian weapons and energy.
And he signed an executive order implementing an additional 40 percent tax on Brazilian products, as Trump lambasts what he calls Brazil's "witch hunt" against his far-right ally, former president Jair Bolsonaro on coup charges.
Traders are keeping tabs on talks with other countries that are yet to sign deals with Washington ahead of Trump's self-imposed Friday deadline.
After a broadly negative day on Wall Street, Asian markets struggled.
Hong Kong, Shanghai, Sydney, Singapore, Seoul, Manila, Wellington and Bangkok all fell, though Tokyo, Taipei and Jakarta edged up.
There was little movement in the yen after the Bank of Japan decided against hiking interest rates, while lifting economic growth and inflation costs. It also cautiously welcomed the country's trade deal with the United States.
Traders had been given a healthy lead from the tech sector after titans Microsoft and Meta posted better-than-expected earnings, sending their stocks soaring in after-market trade.
Amazon and Apple are die to release later Thursday.
Tokyo - Nikkei 225: UP 0.9 percent at 41,020.91 (break)
Hong Kong - Hang Seng Index: DOWN 1.2 percent at 24,871.40
Shanghai - Composite: DOWN 0.7 percent at 3,591.17
Euro/dollar: UP at $1.427 from $1.1409 on Wednesday
Pound/dollar: UP at $1.3260 from $1.3239
Dollar/yen: DOWN at 148.81 yen from 149.50 yen
Euro/pound: UP at 86.18 pence from 86.15 pence
West Texas Intermediate: FLAT at $70.00 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $73.10
New York - Dow: DOWN 0.5 percent at 44,632.99 (close)
London - FTSE 100: UP 0.6 percent at 9,136.32 (close)
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DW
an hour ago
- DW
How can US-India ties recover from Trump's tariff threats? – DW – 08/05/2025
Donald Trump is using tariffs to pressure India to stop buying oil from Russia and Iran, as trade deal talks have stalled. With India holding firm, what is next for the traditionally friendly bilateral relationship? US President Donald Trump's pressure on India to halt its oil imports from Russia and comply with sanctions on Iran has strained ties between Washington and New Delhi, who have enjoyed a healthy strategic partnership for decades. With trade talks still stalled after several rounds of negotiations, Trump has imposed a 25% tariff on Indian exports to the US which took effect on August 1, and on Monday threatened to "substantially" increase it. India has hit back, saying the tariffs are "unjustified and unreasonable" and that it would take "all necessary measures" to safeguard its "national interests and economic security." After calling India a "friend" last week, Trump hardened his tone on Monday, saying New Delhi authorities "don't care how many people in Ukraine are being killed by the Russian War Machine" and are helping fund Russia's war effort in Ukraine through their purchases of Russian oil. The tougher rhetoric is a marked shift in relations between India and the US. Ties have deteriorated in recent months, despite the display of personal warmth and symbolic friendship when Prime Minister Narendra Modi met with President Trump earlier this year in Washington. Commodore Uday Bhaskar, a security and strategic affairs expert, believes that despite Trump's "intimidatory" approach, India "does not seek a confrontation." "However, the US has chosen to weaponize trade tariffs in a unilateral and abrasive manner. That is intimidation. And yes ... trust in Washington is low and the disappointment is high," Bhaskar told DW. Amitabh Mattoo, dean of the School of International Studies at Delhi's Jawaharlal Nehru University, said that India will not be bullied by "tariffs, tantrums, or threats." "Our ties with Russia and Iran reflect sovereign decisions, not defiance. We are not in the business of appeasement, nor of provocation. Strategic autonomy means engaging on our terms which is clear-eyed, confident, and calm. Let us not confuse noise for strategy," Mattoo told DW. The downturn between Washington and New Delhi has coincided with Trump pursuing closer ties with India's neighbor, Pakistan. The two nuclear-armed rivals recently fought a four-day conflict, which Trump said ended thanks to US mediation — a claim Modi rejected. The US and Pakistan signed a deal last month that will see Washington develop the South Asian nation's oil reserves in exchange for lower tariffs on its exports to the US. India is now the biggest buyer of Russian crude oil by volume, according to data from Finland-based think tank the Centre for Research on Energy and Clean Air. Approximately 35%-40% of Indian oil imports come from Russia, up from just 3% in 2021, the year before Russia launched its full-scale invasion of Ukraine. While the West has looked to cut ties with Moscow, India has not joined Western sanctions against Russia. Senior Indian officials and the Ministry of External Affairs have repeatedly stated that India's "steady and time-tested partnership" with Russia is not negotiable and will not be subject to outside pressure. Trump has also justified the tariffs by pointing to India's ongoing trade with Iran, which has also been hit by Western sanctions over Tehran's nuclear ambitions. Shanthie Mariet D'Souza, president of Mantraya, an independent research forum, said American policy "appears to be an expression of [Trump's] frustration to solve the Ukraine war and to pressure Iran." "It also clashes directly with India's policy of strategic autonomy," she told DW. D'Souza also cast doubt on whether Trump's aggressive approach will help resolve the situation, stressing that he risks alienating a willing and trustworthy partner in India. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video D'Souza said India will have to resort to diplomacy to navigate the crisis. In the coming weeks, she said New Delhi will have to analyze whether continuing to buy cheap Russian crude oil is in line with its long-term strategic objectives. "Over the past decade, India's strategic ties with the US have grown stronger, at the expense of its relations with Russia and Iran. Making a complete U-turn may no longer be a viable idea," D'Souza added. Ajay Bisaria, a former diplomat who just returned from the US, said Trump is trying to reshape the world order by deploying two blunt instruments — tariffs and sanctions — with India facing the threat of both. Despite the downturn and harsh rhetoric, Bisaria told DW that "India should play the long game, keep calm, and negotiate. The Trump phenomenon needs to be managed, not countered at every step." India "must prioritize its national interest" with regard to Russian energy imports, Bisaria said, while also conveying to Washington that it "values its partnership" with the US — as long as the White House tones down its increasingly confrontational rhetoric and respects "India's red lines." He pointed to an upcoming visit by a US delegation later this month as a target for a trade deal to be agreed. "Trump should be cordially welcomed to sign the deal later in the year," Bisaria said. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video
DW
2 hours ago
- DW
UN warns of food insecurity in northern Nigeria – DW – 08/05/2025
Jihadist violence has displaced rural communities from Nigeria's northern agricultural heartland. Now, aid agencies warn that funding cuts and abandoned farmlands threaten food security in Nigeria. The United Nations (UN) has described a looming hunger crisis in northern Nigeria as "unprecedented," with analysts estimating that at least 5 million children are already suffering from acute malnutrition. This is despite northern Nigeria traditionally being the nation's agricultural heartland, producing maize, millet, and sorghum. In northeastern Nigeria alone, which includes Borno State, over one million people are believed to be facing hunger. Margot van der Velden, Western Africa Regional Director for the World Food Programme (WFP), said nearly 31 million Nigerians face acute food insecurity and need life-saving food, just as funds for West and Central Africa are shrinking. Many aid programs in West Africa face closure following the Trump administration's dismantling of USAID. The WFP warned its emergency food aid program would stop by July 31 due to "critical funding shortfalls" and that its food and nutrition stocks "have been completely exhausted." By late July, the WFP's appeal for over $130 million (€113 million) to sustain operations in Nigeria for 2025 was only 21% funded. "It is a matter of emergency for the government to see what it can do urgently to provide relief so that there is no outbreak of conflict which will be counter-productive to the progress made in the past," Dauda Muhammad, a humanitarian coordinator in northeastern Nigeria, told DW. Dauda adds that reduced funding, along with few job opportunities and soaring prices, would bring about food insecurity that could undo years of work that tried to diminish the influence of armed jihadist groups, such as Boko Haram, in northern Nigeria. However, Samuel Malik, a senior researcher at Good Governance Africa, a pan-African think-tank, told DW that the root cause of the problem lies elsewhere. "The hunger crisis currently crippling northern Nigeria is fundamentally a consequence of poor governance and protracted insecurity, rather than the result of aid cuts." He says that although "plays a vital role in alleviating the most severe manifestations of Nigeria's food insecurity, it was never designed to be comprehensive or a long time." Villagers have been forced to flee unsafe rural areas to places like the Ramin Kura displacement camp in Sokoto, northwestern Nigeria. 40-year-old Umaimah Abubakar from Ranganda village told DW she moved there after bandits killed her husband and rustled all her in-laws' animals. "Whenever we heard they were approaching, we would run and hide," she said, adding that the community has tried to protect itself by recruiting vigilantes. "Everyone is suffering because there's no food. We couldn't farm this year. Sometimes, when we manage to plant, the bandits attack before the harvest. Other times, after you've harvested and stored your crops, they come and burn everything." She says she earns a little money by washing plates to buy food for her children. "Those who didn't farm will surely go hungry. No farming means no food, especially for villagers like us," Abubakar told DW, "Many now resort to begging or doing odd jobs. We used to plant millet, guinea corn, maize, and sesame." Gurnowa, located in Borno State, which borders the Lake Chad region of Cameroon, Niger and Chad has been hit by a massive exodus. Situated 5 km (3 miles) from the military fortified town of Monguno, Gurnowa has been deserted for years following jihadist attacks. Residents have sought shelter in sprawling, makeshift camps under military protection in Monguno, 140 km north of the regional capital Maiduguri. The camps accommodate tens of thousands of internally displaced people, who fled their homes to escape the violence, which, according to the UN, has already killed over 40,000 people and displaced more than two million from their homes in the last 16 years. "What is driving the crisis more persistently is the Nigerian state's failure to provide security and deliver basic governance to its rural populations," analyst Samuel Malik tells DW. "In the absence of safety, displaced persons are unable or unwilling to return to their farmlands, thus cutting off from their primary means of livelihood. And in this context, hunger is not simply the byproduct of war, but also of systemic neglect." But Gurnowa is just one instance. While Boko Haram militants threaten the northeast, banditry and farmer-herder clashes plague the northwest and north-central regions of Africa's most populous nation. Rural economies are producing less, with crop farmers unable to carry out their livelihoods, and remain unable to feed Nigeria or communities in neighboring Niger. In addition to less food, the price of staples has shot up, creating more financial stress. Borno State Governor Babagana Umara Zulum recently renewed calls for the displaced to return to their farms in time for the rainy season to grow food. Local governments say internally displaced peoples' camps are no longer sustainable, but aid agencies still worry about the risk of jihadist violence. "We are in a difficult situation, especially with hunger and lack of food," a displaced person from Borno State told DW. "Some of us refugees claim they are better off by joining the Boko Haram terrorist group," he added. DW found more instances of young men in Borno State saying they remained jobless and hungry, despite government promises to reward them for leaving jihadist groups. Local governments, however, are wary of appearing to support ex-jihadists over the victims of their violence. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Back at Sokoto's Ramin Kura displacement camp, 19-year-old Sha'afa Usman told DW what happened when her community tried to plant. "We tried to plant on our farms, but people would get kidnapped while working. Now, the only way to go to the farm is with security escorts or vigilantes," the mother-of-three said, adding that her husband was kidnapped from Turba village and is still in captivity. According to Malik, farming still occurs in jihadist-controlled areas, with rural Nigerians being charged to access their fields. Violent consequences await those who cannot pay. "Agricultural activities have become restructured under coercive arrangements dictated by non-state actors," Malik says, adding that survival often depends on entering into exploitative arrangements with armed groups. "In many cases the bandits demand farming and protection levies, while also compelling the people to serve as forced labor on farmlands that were either seized from the villagers or carved out of previously uncultivated forest." Jihadist groups can create some subsistence farming to sustain themselves, which is bolstered through raiding and income generated through ransoms and other illegal streams. "Anyone who goes to the farm risks being kidnapped. Most villagers no longer go because they can't afford ransom," Sha'afa Usman told DW.
DW
5 hours ago
- DW
Netherlands to buy US arms for Ukraine under new NATO scheme – DW – 08/05/2025
The €500 million package is the first funding of US military equipment for Ukraine under a new NATO mechanism. It includes US Patriot missile parts. The Dutch Defense Ministry announced that it would make the first purchase of US weapons for Ukraine under a new NATO mechanism. The scheme is for NATO allies to fund US defense systems and munitions that would then be shipped to Ukraine. Other NATO allies had pledged to join the initiative, but the Netherlands is the first to announce transferring funds. The announcement comes as Russia continues to attack Ukraine. At least three people were reportedly killed in strikes in Ukraine's east on Tuesday. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The Netherlands said it was buying US arms for €500 million ($577 million). The package includes US Patriot missile parts and other systems to support Ukraine on the frontlines. Dutch Defense Minister Ruben Brekelmans said the Netherlands "is now taking the lead" in supplying military equipment to Ukraine under the new scheme. "By supporting Ukraine with determination, we are increasing the pressure on Russia to negotiate," Brekelmans said on X. Brekelmans warned that Russia's advance into Ukrainian territory could pose a broader threat to Europe. "The more Russia dominates Ukraine, the greater the danger to the Netherlands and our NATO allies," he said. Ukrainian President Volodymyr Zelenskyy thanked Dutch Prime Minister Dick Schoof for the contribution. "This will definitely help protect the lives of our people!" Zelenskyy said. US Presidnet Donald Trump and NATO Secretary-General Mark Rutte announced the so-called Prioritized Ukraine Requirements List (PURL) scheme last month. Trump had threatened to cut military support for Ukraine, amid pressure within his Republican Party. He later agreed to continue supplying Ukraine with arms, under the condition that other NATO allies bare the costs. Trump did not provide further information on how exactly the new mechanism would work. But NATO said it would coordinate the delivery of the packages and ensure that they fit Ukraine's needs.
