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Straits Times
17 minutes ago
- Business
- Straits Times
US ruling that Trump tariffs are unlawful stirs relief and uncertainty
FILE PHOTO: U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025. REUTERS/Carlos Barria/File Photo FILE PHOTO: A U.S. flag flutters near shipping containers as a ship is unloaded at the Port of Los Angeles, in San Pedro, California, U.S., May 1, 2025. REUTERS/Mike Blake/File Photo US ruling that Trump tariffs are unlawful stirs relief and uncertainty A U.S. 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 U.S., 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 U.S. government." Winners on financial markets included chip makers, banks, luxury stocks and auto industry, all hit hard by tariff-led disruptions. The U.S. dollar rallied 0.2% against the yen and 0.3% 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% 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 U.S. 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. "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% 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-U.S. companies including Honda, Campari and pharmaceutical companies Roche and Novartis have said they are considering moving operations or expanding their U.S. 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%, while France's CAC 40, which has a heavy weighting of luxury and bank stocks, rose 0.8%. Overall sentiment was also lifted by strong results late on Wednesday from AI bellwether Nvidia. Spot gold declined for a fourth straight day, while U.S. 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. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
33 minutes ago
- General
- Straits Times
Evening Update: Today's headlines from The Straits Times on May 29, 2025
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Straits Times
34 minutes ago
- Automotive
- Straits Times
Car COE renewals in Q1 2025 highest since same period in 2020
Experts attribute the higher COE renewals to the uncertain economic outlook, prompting owners to hold off new car purchases. PHOTO: ST FILE SINGAPORE – Some 2,834 cars had their certificates of entitlement (COEs) renewed in the first three months of 2025, more than double the number for the same period in 2024. The figure is also the highest for the quarter since 2020, when there were 5,558 renewals. Since then, first-quarter COE renewals had decreased – from 2,730 units in 2021 to 1,825 in 2022 and 1,129 in 2023. The figure climbed to 1,378 in 2024. Experts attribute the higher renewals to the uncertain economic outlook, which prompted owners to hold off new car purchases. Others are biding their time for electric vehicle (EV) technology to mature before they switch from their existing cars that run on petrol. This comes at a time when there is a larger population of cars reaching the end of their COE lifespan in 2025 than in the past few years. A COE is a requirement for a car to be used on the road. It has an initial lifespan of 10 years, and can be renewed by five or 10 years. Data published by the Land Transport Authority (LTA) on May 13 showed that in the first quarter of 2025, five-year renewals accounted for 67 per cent of the 1,204 renewals in Category A, which is for smaller or less powerful cars. In contrast, 74.4 per cent of the 1,630 renewals in Category B – which is for larger, more powerful cars – were for 10 years. Dr Zafar Momin, an automotive industry consultant and adjunct professor at NUS Business School, said the recent renewals may have been driven by risk-averse owners who are concerned about the economic uncertainty and want to avoid shelling out for a new car, which will be costlier than renewing the COE of their existing cars. For example, a person who bought a Toyota Corolla Altis in 2015 would have paid less than $120,000, including a COE. Renewing the COE of this car in 2025 is more affordable than replacing the car with a new one, which is priced at about $170,000 with a COE. The cost to renew a COE is based on the average COE premium in the three preceding months. A five-year COE renewal costs half as much as a 10-year one. The data shows that the number of COE renewals increases when the cost falls. Experts said that while the cost to renew a COE today is high, consumers will find that it is still more affordable than buying a new car. In March, a 10-year renewal for a Category A COE cost $92,525 – the lowest since September 2024, when it was $91,697. This was driven by an $8,601 drop in the premium at the first tender exercise in February. Accordingly, more car owners renewed their Category A COEs in March compared with the previous two months, with 598 doing so. Similarly, more owners of larger cars renewed their COEs in January, when the cost – $109,164 – was the lowest for the quarter. Mr Raymond Tang, managing director of used-car dealership Yong Lee Seng Motor, said the population of cars reaching the end of their COE life includes those that will get a low scrap rebate. It makes financial sense to forfeit the rebate and renew the COE of such cars, he said. For a small and economical family car such as the Mitsubishi Attrage, the scrap rebate before the end of the COE is $2,500. Mr Tang said five-year renewals tend to be more popular for Category A COE cars because the owners of such cars are likely to be more budget-conscious. However, the COE cannot be further renewed at the end of five years and the car must be deregistered. He said owners of Category B cars are less constrained by their budget and want to have the option to continue using the car for longer. Mr Oliver Ong, managing director of Accord Motor Enterprise, which offers COE renewal loans, said the number of inquiries for such loans at his company has increased by around 20 per cent since late 2024. Associate Professor Alberto Salvo from the NUS Department of Economics noted that some owners may be renewing COEs to hold onto their existing cars that run on petrol for a bit longer before making the switch to EVs. These owners, he said, are using the time to watch the development of EV technology and how the charging network develops, and to hear the experience of people they know who have made the switch. This is as EV adoption speeds up. In the first four months of 2025, 40 per cent of all new cars, or 5,947 units, were EVs. Overall, however, EVs are still the minority, making up 6.4 per cent of the total car population as at April 30. Associate Professor Steve Yim, an atmospheric scientist at NTU's Asian School of the Environment and Lee Kong Chian School of Medicine, noted that the higher number of COE renewals slows air-quality improvement, as newer vehicles are built to meet more stringent emission standards. New petrol-powered cars registered from September 2017 have to meet the Euro VI emissions standard. It imposes stricter limits on vehicle tailpipe emissions than the Euro IV standard, which was introduced in 2006. Content creator See Neng Tat, 35, renewed the COE for his Mercedes-Benz A180 car in April for 10 years, and hopes to continue using his vehicle for as long as possible. Considering the money and effort he poured into his car over the past 10 years to maintain and upgrade it, the self-professed 'car guy' said he is not attracted to new cars with their many high-tech features. Mr Henry Seah, 44, is keeping an eye on COE renewal prices. He is prepared to spend up to $50,000 to renew the COE of his Mazda Biante multipurpose vehicle by November. Even though this may mean that he can use his vehicle for only five more years, the director of a finance company and father of three said he is not willing to part with more than $100,000 for a 10-year renewal because it is 'just crazy'. Lee Nian Tjoe is senior transport correspondent at The Straits Times, where he also oversees the Motoring section . Join ST's WhatsApp Channel and get the latest news and must-reads.
Straits Times
34 minutes ago
- Business
- Straits Times
UK PM Starmer warns Farage's 'fantasy' fiscal plans would crash the economy
FILE PHOTO: Britain's Prime Minister Keir Starmer visits a local mechanics business, following the British government's announcement of investments to maintain roads across the UK, in Cambridge, Cambridgeshire, Britain, March 24, 2025. REUTERS/Chris Radburn/Pool/File Photo LONDON - Prime Minister Keir Starmer warned that Nigel Farage would crash the economy if his Reform UK party ever won power, describing his tax and spending plans as a fantasy in a speech attacking the man who has become Labour's chief threat in the polls. Starmer's Labour Party suffered a bruising set of local election results earlier this month after less than a year in power, losing ground to Reform, which also now leads national opinion polls. Farage has pitched a right-wing agenda of lowering immigration and cutting taxes, while also courting workers who may have become disaffected with Labour over Starmer's efforts to cut public spending. But Starmer said Farage's economic plan was similar to that of former Conservative Prime Minister Liz Truss, who resigned in October 2022 after less than two months in power when her 'mini budget' of unfunded tax cuts sent markets into a tailspin. "We were elected to fix that mess," Starmer said of Truss's economic legacy on Thursday. "Now in government, we are once again fighting the same fantasy - this time from Farage. The same bet in the same casino: that you can spend tens of billions of pounds in tax cuts, without a proper way of paying for it." Farage, one of Britain's most recognisable politicians, was only elected to parliament for the first time last year, when Reform won five seats. But he has spent more than a decade campaigning from outside the mainstream of British politics, forcing successive governments to shift policies on Europe and immigration out of a fear his populist appeal could turn voters against them. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
34 minutes ago
- Business
- Straits Times
Asia needs to form agile partnerships, double down on regional integration: Singapore DPM Gan Kim Yong
Singapore Deputy Prime Minister Gan Kim Yong delivering a speech at the 30th Nikkei International Forum on the Future of Asia in Tokyo on May 29. PHOTO: EPA-EFE Asia must not 'rest on its laurels' and continue to reinforce partnerships amid turmoil: DPM Gan – Singapore's Deputy Prime Minister Gan Kim Yong on May 29 appealed to Asia to form agile partnerships and double down on regional integration amid deepening global strife. While many countries in Asia are already part of overlapping partnerships of varying permutations – bilateral, regional, plurilateral – the inherent danger is if they rest on their laurels and not work on growing and strengthening these links, he said. 'We should recognise the challenges of the current turmoil and raise the ambition of each of these mutually reinforcing partnerships,' Mr Gan said in a speech during the 30th Nikkei International Forum On The Future of Asia in Tokyo. Exercising agility and flexibility in building ties is increasingly vital as the world grapples with what Mr Gan described as 'the greatest uncertainty confronting us today': What would happen after the United States' 90-day reprieve over 'reciprocal tariffs' ends on July 8. 'Things are changing all the time, every morning when (you) open the newspaper , there is always big news on trade and tariffs, and sometimes shocking news, and that is the first dish on your breakfast table,' Mr Gan, who is also Singapore's Trade and Industry Minister, said in conversation with the Nikkei's Singapore bureau chief Fumika Sato. While he noted that the risk of a recession cannot be ruled out, another bad-case scenario was that it would be difficult to undo the damage caused by the sweeping Liberation Day tariffs. 'At the end of 90 days, whatever outcome that may be, the uncertainty remains that tariffs can be raised or reduced at any point in time,' Mr Gan said. 'This will result in weakening of the global trading system, and that is going to be the new order of the day. In time to come, this will be the new landscape.' Trade-reliant economies like Singapore, whose trade is three times the size of its economy, would be vulnerable to these headwinds. This was why it was essential for Asean and its partners to double down and expand on existing relationships, he said. Doing so would 'demonstrate to the rest of the world that despite this contestation and competition, there is still room for cooperation and collaboration'. The Straits Times is a media partner for the two-day event , whose theme for 2025 is Asia's Challenge In A Turbulent World. Mr Gan, who leads Singapore's tariff negotiations with Washington, had used his 20-minute address to emphasise that a winner-takes-all approach towards trade was against the spirit of a level playing field that the World Trade Organisation (WTO) has been advocating. In such a climate, larger economies with stronger bargaining chips can leave smaller economies in the dust. 'This is why recent moves by some countries to impose and remove tariffs at will are concerning,' Mr Gan told an audience of over 200 diplomats, bureaucrats, executives and academics. Singapore faces the baseline 10 per cent reciprocal tariff imposed by the US, although some countries across South-east Asia were hit harder with rates of over 40 per cent. 'We must do all we can to reinforce a shared rules-based order, so that global trade can continue to be conducted on a free, fair and non-discriminatory basis,' Mr Gan said. More on this Topic Singapore sees progress in US tariff talks, but uncertainty may overwhelm hope In this regard, Japan and Singapore are partners, given the convergence in their strategic outlooks and a shared agenda to strengthen and reform multilateral institutions. The two countries mark 60 years of diplomatic ties in 2026, an occasion that lends itself to the opportunity for new areas of collaboration such as digital trade, supply chain resilience, and the green transition. Mr Gan reiterated Singapore's hopes for Japan to play an even bigger role in the upkeep of regional peace and stability – a point that Singapore's political leaders have made repeatedly in recent years. 'Singapore stands ready to work with Japan as a trusted and reliable partner, and we hope to step up our economic and security cooperation in time to come,' he said . Japan's expanding role in regional security comes despite its history as a wartime aggressor. Yet the tides have changed 80 years since its surrender, with Japan now relied upon as a staunch defender of a rules-based multilateral order that is being undermined. Yet this order is now under attack, with assertive behaviour in regional waters, as well as international conflicts both on the battlefield and in trade. Mr Gan said the world is facing three key fundamental challenges today: How can Asia maintain strategic autonomy amidst intensifying US-China contestation? How can we preserve the rules-based, multilateral trading system that underpins Asia's economic growth and development? How do we address global threats and protect the global commons? For one thing, the persistent risk of flare-ups between the world's two largest economies could well spread beyond trade to other areas, such as investments, supply chains and critical technology, Mr Gan warned. 'While both powers claim that they do not wish to force countries to take sides, each seeks to draw others closer to their respective orbits,' he said. This makes it all the more paramount for Asian countries, which maintain close ties with both powers, to 'continue to maintain our strategic autonomy, and act in a principled and consistent way on the basis of our own national interests,' he added. It was also in Asia's interests to modernise the WTO, Mr Gan said, noting: 'While the system is not perfect, we must not abandon it. Instead, we should reform it and make it better.' Among Mr Gan's suggestions were to review the existing consensus-based decision-making processes such that they do not 'end up a recipe for gridlock', and to update the WTO rulebook to address emerging issues. Other institutions such as the World Health Organisation, International Monetary Fund and World Bank cannot be allowed to fail, Mr Gan said, as this would impair the world's ability to respond to future crises like pandemics or recessions. The key way to prevent this was to entrench relationships – especially in areas where the collective commitment already seems to be waning, such as in climate change – by deepening existing ones and forging new ties. He noted how Asean, which earlier this week had concluded talks on upgrading its trade in goods agreement, was looking to deepen economic ties with the Gulf Cooperation Council (GCC). This includes a potential free trade agreement between Asean and the GCC, its possible admission to the 15-nation Regional Comprehensive Economic Partnership (RCEP) that now comprises Asean, Australia, China, Japan, New Zealand, and South Korea. The more vigorous Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), too, is looking at how to broaden economic partnerships, including with Asean and the European Union. The CPTPP comprised 11 founding members after the United States pulled out – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – with Britain acceded as the 12th member in 2024. Singapore supports cementing multilateralism, including by expanding the CPTPP if countries can meet its stringent criteria, with Mr Gan noting China and Indonesia as among countries that have indicated interest. 'These new alliances will facilitate effective and timely collaboration on key trade policy issues, and signal our commitment to a rules-based trading system,' he said. There are also measures driven by like-minded countries, such as a WTO Joint Statement Initiative on E-commerce that Japan, Singapore and Australia co-led in 2019 and now involves 91 members, accounting for over 90 per cent of global trade. Despite unsuccessful efforts to formally incorporate the initiative within the WTO in February 2025, the countries are exploring how to implement the agreement in the interim. 'This is one example of 'flexible multilateralism', where we allow like-minded partners to move ahead on important issues of mutual interest, such as e-commerce, while leaving the door open for others to join as and when they are ready,' Mr Gan said. Other areas for collaboration with Asean include deeper digital integration and cross-border payment connectivity, as well as what the DPM described as a 'cross-border flow of electrons'. Referring to plans for an Asean Power Grid by 2045, which would facilitate the flow of renewable energy across borders and reduce the reliance on fossil fuels, Mr Gan said: 'Asia is at the epicentre of the battle against climate change. 'There is urgency to galvanise global action not only for climate mitigation measures, but also to accelerate the green transition.' During his three-day visit to Tokyo ending May 29, Mr Gan also met with Japan's Chief Cabinet Secretary Yoshimasa Hayashi, economic security minister Minoru Kiuchi, as well as economic revitalisation minister Ryosei Akazawa, who is leading Japan's tariff negotiations with the US. Walter Sim is Japan correspondent at The Straits Times. Based in Tokyo, he writes about political, economic and socio-cultural issues. Join ST's Telegram channel and get the latest breaking news delivered to you.
