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Business Times
3 hours ago
- Business
- Business Times
How the US market fell from 4th to 41st for returns – and what it means for stocks in 2025
NEARLY two months after US President Donald Trump roiled markets with his on-again, off-again 'reciprocal' tariffs and universal 10 per cent levy, uncertainty remains. My last column showed the illogic underpinning this – and counselled patience. Here is an update – and how to profit. Trump says America 'wins' through his tariffs, reclaiming 'lost' manufacturing jobs and cutting the trade deficit. No. Tariffs always hammer most the one who imposes them. Don't take my word for it. Look to the markets. For any good capitalist, this is step one. Markets are a lie detector, weighing talk, forecasts and opinions – and rendering verdicts. Non-US stocks were up 8.8 per cent this year to May 22. The Straits Times Index gained 4.9 per cent, a hair's breadth from all-time highs. China? Up 10 per cent. European stocks rose 13.7 per cent. Mexico, up 20.7 per cent. US stocks? Down 5.5 per cent – a striking lag. If we look at it another way: Of the 47 MSCI All-Country World Index (ACWI) nations, America was 41st in the ranking of countries by their year-to-date returns as at May 22. In the same period last year, America was fourth – with its 28.8 per cent return fully seven percentage points ahead of the ACWI. Why did US stocks go from No 4 to 41? The answer is No 47; the 47th president, that is. Trump's vacillations make funds flee America. Markets know that attempts to reduce the trade deficit are senseless. A trade deficit means a capital account surplus by definition – that capital is foreign investment in the US. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Why would reversing that be desirable? Why would the government intervening to favour American firms, instead of letting free markets sort out the most efficient use of capital, be considered positive? Why would policy that seemingly changes on a whim be considered good? Stocks are seeing through the smoke and mirrors. America's lag tells you those things are bad, not good. My last column noted how Trump justified his 90-day reciprocal tariff pause on Apr 9 on the grounds that some 75 nations sought deals. Many claimed that this revealed Trump's true aim. The president's fans could say that tariffs, confusion and uncertainty are solely a leverage to strike a flurry of deals – delivering even freer trade. However, the markets are looking at reality, not armchair psychobabble. Deals to make more deals Since Apr 9, just two tariff 'deals' have emerged – one with Britain and one with China. Both are fluff. Britain's is a one-year, non-binding agreement to mitigate tariffs until a full trade deal happens. A deal to make a deal. It affects only a handful of industries. Crucially, the 10 per cent universal levy remains on most UK goods, just like for those from Singapore. America's China deal looks bigger, but only because the bar was incredibly low. Yes, it cut 145 per cent tariffs on Chinese goods to 30 per cent, while China dropped retaliatory levies from 125 per cent to 10 per cent. However, the 'deal' lasts only 90 days and effectively just buys time. Another deal to make a deal. Plus, tariffs on China remain 30 percentage points higher than in January. Both countries are worse off, but especially America. Who wins from this? Maybe Singapore, via re-exporting. On May 16, Trump flip-flopped again. Boasting that 150 nations now seek 'deals', he said that there isn't time to negotiate them all. His 'solution'? Telling nations what rates they will pay – and offering chances to appeal. Didn't he already do that on 'Liberation Day' on Apr 2? How will it work? Will rates be higher, lower or the same as those on Apr 2? He did not say, further fanning uncertainty. Then, days later, he threatened the European Union with new 50 per cent tariffs – and 25 per cent on Apple products. More uncertainty. Meanwhile, legal challenges to Trump's tariffs progress. Maybe real deals will come that will actually lower trade barriers and uncertainty – a huge potential upside. Then again, maybe not. But as my last column said, even if all tariffs return, the pain will be less than feared – which will be bullish for markets. Importers can readily skirt America's understaffed, overwhelmed tariff-collecting Customs and Border Protection staff via both illegal and legal means. The latter include 'tariff splitting' – stripping out services-related costs such as marketing to reduce goods' values – or storing imports in bonded warehouses. Or, shipping in goods that are valued to be under US$800. And myriad illegal ways such as misclassifying and undervaluing goods. Or, as mentioned, exporters can 'tranship' or re-export via lower-tariff nations – such as Singapore. This is why China's April exports didn't tank despite shipments to America tumbling 21 per cent. South-east Asia gobbled up the difference – and shipped them on. It drove Singapore's huge, 113 per cent year-on-year spike in April re-exports to America. Vietnam and Taiwan are seeing similar surges. Shippers could further tap Canada or Mexico, gaming the US-Mexico-Canada Agreement's tariff exemption. Hence, while April's total tariff collections rose, they missed administration forecasts by 75 per cent. That will persist. Happily, fear exceeds the negative effects, especially outside America. For investors, that is a recipe for a bull market – with non-US stocks continuing to lead. The writer is the founder, executive chairman and co-chief investment officer of Fisher Investments, an independent investment adviser serving both individual and institutional investors globally
Business of Fashion
3 days ago
- Business
- Business of Fashion
US Ruling That Trump Tariffs Are Unlawful Stirs Relief and Uncertainty
A US trade court ruling that blocked most of President Donald Trump's tariffs and found he had overstepped his authority triggered some relief on financial markets on Thursday, while adding to the uncertainties weighing on the global economy. Among the United States' big trading partners, in the throes of negotiation with the Trump administration, Germany said it could not comment, as did the European Commission. 'We ask for your understanding that we cannot comment on the legal proceedings in the US, as they are still ongoing,' a spokesperson for Germany's economy ministry said. 'We continue to hope that a mutually beneficial solution can be reached in the negotiations between the EU Commission and the US government.' ADVERTISEMENT Winners on financial markets included chip makers, banks, luxury stocks and auto industry, all hit hard by tariff-led disruptions. The US dollar rallied 0.2 percent against the yen and 0.3 percent against the Swiss franc as currencies and assets that have benefited from the tariff-induced market turmoil fell. Wall Street stock index futures rose by more than 1.5 percent The trade court ruling on Wednesday dealt a blow to Trump's central policy of using tariffs to wring concessions from trading partners. His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues. Following a market revolt after Trump's major tariff announcement on April 2, the US president paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners. But apart from a pact with Britain this month, agreements remain elusive and the court's stay on the tariffs may dissuade countries like Japan from rushing into deals, analysts said. Another pause in Trump's stop-start trade policy could be helpful to opponents of his tariffs and to traders who relish volatility. ADVERTISEMENT 'Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs – which can't exceed 15 percent for the time being,' George Lagarias, chief economist at Forvis Mazars international advisers, said. Turmoil Trump's trade war has shaken makers of everything from luxury handbags and trainers to household appliances and cars as the price of raw materials has risen, supply chains have been disrupted and company strategies redrafted. Drinks company Diageo, automakers General Motors and Ford are among those who have abandoned forecasts for the year ahead. Non-US companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their US presence to mitigate the impact of tariffs. As markets assessed the latest twist in the trade upheaval, European export-sensitive sectors, such as autos and luxury stocks, were among leading gainers on Thursday. The pan-continental STOXX 600 was up 0.4 percent, while France's CAC 40, which has a heavy weighting of luxury and bank stocks, rose 0.8 percent. Overall sentiment was also lifted by strong results late on Wednesday from AI bellwether Nvidia. Spot gold declined for a fourth straight day, while US Treasury yields rose. Bond yields move inversely with prices. But the gains in shares may be short-lived, analysts said, with those who relish risk making the most of them. ADVERTISEMENT 'I think we are in a period of higher volatility - we will get some more spikes on the way, I think. But volatility is the friend of the active investors,' Kevin Barker, global head of active equities, UBS Asset Management, told a media briefing. By Sarah Marsh, Samuel Indyk Learn more: Trump Tariffs Hit European Luxury, Shares Tank LVMH and Hermès stock fell about 3 percent and 4 percent respectively, in line with sector peers including Kering, Prada and Burberry, after the US president announced a 50 percent duty on imports from the European Union.
The Advertiser
4 days ago
- Business
- The Advertiser
Trump tariff court setback stirs relief and uncertainty
A US trade court ruling that blocked most of President Donald Trump's tariffs and found he had overstepped his authority has triggered some relief on financial markets, while adding to the uncertainties weighing on the global economy. Among the United States' big trading partners, in the throes of negotiation with the Trump administration, Germany said it could not comment, as did the European Commission. "We ask for your understanding that we cannot comment on the legal proceedings in the US, as they are still ongoing," a spokesperson for Germany's economy ministry said on Thursday. "We continue to hope that a mutually beneficial solution can be reached in the negotiations between the EU Commission and the US government." Winners on financial markets included chipmakers, banks, luxury stocks and the auto industry, all hit hard by tariff-led disruptions. The US dollar rallied 0.2 per cent against the yen and 0.3 per cent against the Swiss franc as currencies and assets that have benefited from the tariff-induced market turmoil fell. Wall Street stock index futures rose by more than 1.5 per cent. The trade court ruling on Wednesday dealt a blow to Trump's central policy of using tariffs to wring concessions from trading partners. His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues. Following a market revolt after Trump's major tariff announcement on April 2, the US president paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners. But apart from a pact with Britain earlier in May, agreements remain elusive and the court's stay on the tariffs may dissuade countries like Japan from rushing into deals, analysts said. Another pause in Trump's stop-start trade policy could be helpful to opponents of his tariffs and to traders who relish volatility. "Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs - which can't exceed 15 per cent for the time being," said George Lagarias, chief economist at international advisers Forvis Mazars. Trump's trade war has shaken makers of everything from luxury handbags and trainers to household appliances and cars as the price of raw materials has risen, supply chains have been disrupted and company strategies redrafted. Drinks company Diageo and automakers General Motors and Ford are among those who have abandoned forecasts for the year ahead. Non-US companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their US presence to mitigate the impact of tariffs. As markets assessed the latest twist in the trade upheaval, European export-sensitive sectors such as autos and luxury stocks were among leading gainers on Thursday. Overall sentiment was also lifted by strong results late on Wednesday from AI bellwether Nvidia. Spot gold declined for a fourth straight day, while US Treasury yields rose. Bond yields move inversely with prices. But the gains in shares may be short-lived, analysts said, with those who relish risk making the most of them. "I think we are in a period of higher volatility - we will get some more spikes on the way, I think. But volatility is the friend of the active investors," Kevin Barker, global head of active equities, UBS Asset Management, told a media briefing. A US trade court ruling that blocked most of President Donald Trump's tariffs and found he had overstepped his authority has triggered some relief on financial markets, while adding to the uncertainties weighing on the global economy. Among the United States' big trading partners, in the throes of negotiation with the Trump administration, Germany said it could not comment, as did the European Commission. "We ask for your understanding that we cannot comment on the legal proceedings in the US, as they are still ongoing," a spokesperson for Germany's economy ministry said on Thursday. "We continue to hope that a mutually beneficial solution can be reached in the negotiations between the EU Commission and the US government." Winners on financial markets included chipmakers, banks, luxury stocks and the auto industry, all hit hard by tariff-led disruptions. The US dollar rallied 0.2 per cent against the yen and 0.3 per cent against the Swiss franc as currencies and assets that have benefited from the tariff-induced market turmoil fell. Wall Street stock index futures rose by more than 1.5 per cent. The trade court ruling on Wednesday dealt a blow to Trump's central policy of using tariffs to wring concessions from trading partners. His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues. Following a market revolt after Trump's major tariff announcement on April 2, the US president paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners. But apart from a pact with Britain earlier in May, agreements remain elusive and the court's stay on the tariffs may dissuade countries like Japan from rushing into deals, analysts said. Another pause in Trump's stop-start trade policy could be helpful to opponents of his tariffs and to traders who relish volatility. "Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs - which can't exceed 15 per cent for the time being," said George Lagarias, chief economist at international advisers Forvis Mazars. Trump's trade war has shaken makers of everything from luxury handbags and trainers to household appliances and cars as the price of raw materials has risen, supply chains have been disrupted and company strategies redrafted. Drinks company Diageo and automakers General Motors and Ford are among those who have abandoned forecasts for the year ahead. Non-US companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their US presence to mitigate the impact of tariffs. As markets assessed the latest twist in the trade upheaval, European export-sensitive sectors such as autos and luxury stocks were among leading gainers on Thursday. Overall sentiment was also lifted by strong results late on Wednesday from AI bellwether Nvidia. Spot gold declined for a fourth straight day, while US Treasury yields rose. Bond yields move inversely with prices. But the gains in shares may be short-lived, analysts said, with those who relish risk making the most of them. "I think we are in a period of higher volatility - we will get some more spikes on the way, I think. But volatility is the friend of the active investors," Kevin Barker, global head of active equities, UBS Asset Management, told a media briefing. A US trade court ruling that blocked most of President Donald Trump's tariffs and found he had overstepped his authority has triggered some relief on financial markets, while adding to the uncertainties weighing on the global economy. Among the United States' big trading partners, in the throes of negotiation with the Trump administration, Germany said it could not comment, as did the European Commission. "We ask for your understanding that we cannot comment on the legal proceedings in the US, as they are still ongoing," a spokesperson for Germany's economy ministry said on Thursday. "We continue to hope that a mutually beneficial solution can be reached in the negotiations between the EU Commission and the US government." Winners on financial markets included chipmakers, banks, luxury stocks and the auto industry, all hit hard by tariff-led disruptions. The US dollar rallied 0.2 per cent against the yen and 0.3 per cent against the Swiss franc as currencies and assets that have benefited from the tariff-induced market turmoil fell. Wall Street stock index futures rose by more than 1.5 per cent. The trade court ruling on Wednesday dealt a blow to Trump's central policy of using tariffs to wring concessions from trading partners. His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues. Following a market revolt after Trump's major tariff announcement on April 2, the US president paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners. But apart from a pact with Britain earlier in May, agreements remain elusive and the court's stay on the tariffs may dissuade countries like Japan from rushing into deals, analysts said. Another pause in Trump's stop-start trade policy could be helpful to opponents of his tariffs and to traders who relish volatility. "Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs - which can't exceed 15 per cent for the time being," said George Lagarias, chief economist at international advisers Forvis Mazars. Trump's trade war has shaken makers of everything from luxury handbags and trainers to household appliances and cars as the price of raw materials has risen, supply chains have been disrupted and company strategies redrafted. Drinks company Diageo and automakers General Motors and Ford are among those who have abandoned forecasts for the year ahead. Non-US companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their US presence to mitigate the impact of tariffs. As markets assessed the latest twist in the trade upheaval, European export-sensitive sectors such as autos and luxury stocks were among leading gainers on Thursday. Overall sentiment was also lifted by strong results late on Wednesday from AI bellwether Nvidia. Spot gold declined for a fourth straight day, while US Treasury yields rose. Bond yields move inversely with prices. But the gains in shares may be short-lived, analysts said, with those who relish risk making the most of them. "I think we are in a period of higher volatility - we will get some more spikes on the way, I think. But volatility is the friend of the active investors," Kevin Barker, global head of active equities, UBS Asset Management, told a media briefing. A US trade court ruling that blocked most of President Donald Trump's tariffs and found he had overstepped his authority has triggered some relief on financial markets, while adding to the uncertainties weighing on the global economy. Among the United States' big trading partners, in the throes of negotiation with the Trump administration, Germany said it could not comment, as did the European Commission. "We ask for your understanding that we cannot comment on the legal proceedings in the US, as they are still ongoing," a spokesperson for Germany's economy ministry said on Thursday. "We continue to hope that a mutually beneficial solution can be reached in the negotiations between the EU Commission and the US government." Winners on financial markets included chipmakers, banks, luxury stocks and the auto industry, all hit hard by tariff-led disruptions. The US dollar rallied 0.2 per cent against the yen and 0.3 per cent against the Swiss franc as currencies and assets that have benefited from the tariff-induced market turmoil fell. Wall Street stock index futures rose by more than 1.5 per cent. The trade court ruling on Wednesday dealt a blow to Trump's central policy of using tariffs to wring concessions from trading partners. His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues. Following a market revolt after Trump's major tariff announcement on April 2, the US president paused most import duties for 90 days and said he would hammer out bilateral deals with trade partners. But apart from a pact with Britain earlier in May, agreements remain elusive and the court's stay on the tariffs may dissuade countries like Japan from rushing into deals, analysts said. Another pause in Trump's stop-start trade policy could be helpful to opponents of his tariffs and to traders who relish volatility. "Assuming that an appeal does not succeed in the next few days, the main win is time to prepare, and also a cap on the breadth of tariffs - which can't exceed 15 per cent for the time being," said George Lagarias, chief economist at international advisers Forvis Mazars. Trump's trade war has shaken makers of everything from luxury handbags and trainers to household appliances and cars as the price of raw materials has risen, supply chains have been disrupted and company strategies redrafted. Drinks company Diageo and automakers General Motors and Ford are among those who have abandoned forecasts for the year ahead. Non-US companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their US presence to mitigate the impact of tariffs. As markets assessed the latest twist in the trade upheaval, European export-sensitive sectors such as autos and luxury stocks were among leading gainers on Thursday. Overall sentiment was also lifted by strong results late on Wednesday from AI bellwether Nvidia. Spot gold declined for a fourth straight day, while US Treasury yields rose. Bond yields move inversely with prices. But the gains in shares may be short-lived, analysts said, with those who relish risk making the most of them. "I think we are in a period of higher volatility - we will get some more spikes on the way, I think. But volatility is the friend of the active investors," Kevin Barker, global head of active equities, UBS Asset Management, told a media briefing.
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Business Standard
23-05-2025
- Business
- Business Standard
US Bill lowers remittance tax from 5% to 3.5% for non-US citizens
The Donald Trump administration has lowered the proposed remittance tax rate it plans to impose on funds sent abroad by non-US citizens, including to India, from 5 per cent to 3.5 per cent. The change was introduced through an amendment to the 'One Big Beautiful Bill', which was passed by the US House of Representatives on Thursday. Non-US citizens include H-1B, L-1, and F-1 visa holders, as well as green card holders. US citizens and nationals are exempt from this tax. The Bill will now head to the Republican-majority Senate for final approval before it can be enacted into law. The original version of the Bill — spanning major reforms in income tax, health care, corporate taxation, and federal debt — included a 5 per cent excise duty on outward remittances, to be paid by the sender. It drew concern from immigrant communities and experts, especially given the volume of remittances flowing from the US to countries like India and Mexico. A government official speaking on condition of anonymity said the Bill if enacted, will have an impact on remittances into the country. 'The government has not made an assessment yet. No discussion has happened whether its removal can be a demand under the proposed India-US bilateral trade agreement,' the official said. India is the largest recipient of remittances from the US. It received $32.9 billion in 2023-24, with a 27.7 per cent share in the country's inward remittances, according to the Reserve Bank of India data. Overall, such remittances have more than doubled from $55.6 billion in 2010-11 to $118.7 billion in 2023-24. 'In the short term, we expect remittances to India to spike before the effective date of January 1, 2026. We may also see a shift of some remittances from formal to informal channels,' said Lloyd Pinto, Partner - US Tax at Grant Thornton Bharat.
Yahoo
23-05-2025
- Politics
- Yahoo
Harvard sues Trump administration over ban on enrolling international students
Harvard University sued the Trump administration Friday over the move to bar international students from enrolling. Harvard asked a judge to immediately block the order from the Department of Homeland Security, arguing that the policy violated the First Amendment and the department's own regulations. The lawsuit said the move is 'in clear retaliation' for Harvard resisting the government's push for more control over the university: The school recently rebuffed a request for information on its foreign students' campus activities. Non-US citizens make up almost a third of the student body, and are a crucial source of income for Harvard. The Harvard Crimson argued that the Trump administration is targeting the university because it 'had the moral fortitude to resist attacks on its independence.'
