Japan’s Export Growth Shifts Toward Asia as U.S. Tariffs Drag Down American Trade

Economic

Summary:

Japan's total exports rose by 3.7% in October 2025, driven by stronger trade with Asia, while shipments to the U.S. fell for the seventh straight month amid persistent tariff pressure under President Trump’s trade policy....

Mixed Trade Performance Highlights Diverging Regional Trends

Japan’s export sector showed signs of resilience in October, posting a 3.7% year-on-year increase in global shipments, while imports edged up 0.6%, according to the Finance Ministry’s latest data. However, the country’s trade relationship with the United States continued to deteriorate, with exports to its largest non-Asian partner declining 3.1% a trend now in its seventh consecutive month. This export contraction is largely attributable to the tariff framework introduced by President Donald Trump, which imposed a 15% levy on most Japanese imports starting in July 2025.

Although the new tariff rate is lower than the initially proposed 25%, it still represents a significant escalation from the previous average of 2.5%. The causal relationship between these heightened tariffs and Japan’s declining exports to the U.S. is reflected in reduced shipments of key products such as computer parts, industrial machinery, buses, and trucks. As these goods become more expensive for U.S. buyers, Japanese exporters face reduced demand and eroded competitiveness.

Import Dynamics Reflect Broader Shifts in Bilateral Trade

Interestingly, Japan’s imports from the U.S. surged 20.9% in October, suggesting a shift in bilateral trade balance. This growth was led by food products, especially cereals, as well as petroleum. The increase may stem from seasonal demand and the relative cost-effectiveness of U.S. agricultural exports despite the broader trade tensions. The juxtaposition of declining Japanese exports to the U.S. with rising American imports indicates a widening asymmetry that is unfavorable to Japan’s trade surplus goals.

Beyond bilateral trade, soybean imports from all global sources surged 37.3%, possibly due to domestic agricultural supply issues or feedstock demand. Meanwhile, imports of iron and steel dropped 17.1%, likely reflecting a cooling in construction or manufacturing investment cycles.

Asia Emerges as a Growth Engine Amid U.S. Weakness

Japan’s trade data reveals a regional rebalancing in its export strategy. Exports to China rose 2.1%, while shipments to Hong Kong and Taiwan posted significant gains of 19.2% and 17.7%, respectively. These trends suggest that Japan is actively shifting its export focus toward more receptive Asian markets, both to offset U.S. trade friction and to capitalize on regional demand.

This correlational pivot toward Asia may become increasingly intentional. Analysts warn that given ongoing strain with the U.S. and new political frictions with China triggered by Prime Minister Sanae Takaichi’s pro-Taiwan comments Japan’s long-term export strategy will need to balance regional diplomacy with market diversification.

Trade Deficit Narrows, But Vulnerabilities Remain

The improved export performance and modest import rise helped Japan narrow its trade deficit to 231.77 billion yen (approximately $1.5 billion), a significant reduction from the 499.95 billion yen ($3.2 billion) recorded a year earlier. This narrowing is statistically positive, but it does not erase the structural concern that the deficit could widen again if U.S. demand continues to soften and political tensions with China escalate.

While October’s figures show that Japan is partially adapting to its new trade environment, the sustainability of its recovery remains uncertain. The government may need to strengthen ties with Southeast Asia and India to create buffers against future economic or political shocks in its two largest export markets the U.S. and China.

Japan’s October trade data underscores a complex economic reorientation shaped by tariff policies, geopolitical tensions, and shifting regional dynamics. With U.S.-bound exports in steady decline due to policy-induced friction and a rising appetite for Japanese goods in parts of Asia, Japan is recalibrating its external trade dependence. Whether this pivot will be enough to stabilize long-term growth depends on its ability to navigate a volatile global landscape while maintaining diversified export relationships and domestic resilience.

Source: AP

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Samantha Luan

Forex

Cryptocurrency

Key Points:

· XRP drops to key support as BTC weakness, ETF outflows, and fading Fed rate-cut bets intensify bearish market pressure.

· Bitwise XRP ETF launches with solid demand but lags Canary's higher debut volume, weighing on near-term sentiment.

· Crypto markets slump as liquidations surge, with leverage-driven selling pushing BTC and XRP into a 45-day decline.

XRP tumbled to its key psychological support level on Thursday, November 20, as selling pressure intensified across the broader crypto market.

XRP-spot ETFs failed to stem the selling wave, as Bitcoin (BTC) slumped to its lowest level since April 2025. XRP's continued correlation with Bitcoin exposed the token to BTC-spot ETF flows, which have weighed on sentiment in November.

Prominent crypto commentator Quinten, with more than 200,000 followers, commented on the percentage of short-term holders being underwater, stating:

"2020 COVID crash, 92% in a loss at $3,750. 2020 FTX collapse, 94% in a loss at $16,000. Today, 99% in a loss at $89,000. This is the highest short term holder capitulation ever recorded."

XRP-Spot ETFs Fail to Impress

Bitwise XRP ETF launched on Thursday, November 20, signaling robust institutional demand on its first day of trading. However, trading volumes came up short of the Canary XRP ETF's (XRPC) $59 million on day one, weighing on sentiment.

Bloomberg Intelligence analyst James Seyffart commented on Bitwise XRP ETF's first day of trading, stating:

"With a bit over ~2 hours left in trading, Bitwise's $XRP is almost at $22 million in trading today. Quite impressive for the second product to market a full week after Canary Funds' $XRPC, which is the #1 launch by volume this year."

Analysts had previously speculated that Bitwise and Franklin Templeton would draw significantly more demand, given their rankings on the ETF issuer Assets Under Management league table.

According to VettaFi, Franklin Templeton ranks #19 on the ETF issuer Assets Under Management (AUM) league table, with $44.7 billion in AUM. Bitwise Asset Management ranks #56, with $5.6 billion in AUM. The first-to-market XRP-spot ETF issuer, Canary Capital, ranks #231, with $84.82 million in AUM.

However, market conditions are likely to have impacted trading volumes. For context, the US BTC-spot ETF market is facing net outflows of $3 billion in November.

There were no new market events to trigger Thursday's sell-off. However, sentiment remains weak due to two key October events. The US government shutdown and President Trump's threat of raising tariffs on Chinese shipments by 100% have sent XRP down 30% from October 1 to November 20. The only good news for XRP holders was the swift recovery from the October 10 flash crash to $0.7773.

XRPUSD – Daily Chart – 211125 – Shutdown and Tariff Threats

Macro Pressures Deepen Losses

The Kobeissi Letter commented on the extended crypto sell-off, stating:

"The crypto collapse: On October 6th, just 45 days ago, Bitcoin hit a record high of $126,272, worth $2.5 trillion. Then, something "mechanical" seems to have shifted on October 10th, after President Trump threatened 100% tariffs on China. Not only did this lead to the record -$19.2 billion liquidation, but Bitcoin never truly recovered."

The Kobeissi Letter noted:

"Even when the October 30th trade deal was reached between the US and China, liquidation pressures only worsened. Then, since November 10th, Bitcoin has moved in a literal straight-line lower with average daily liquidations nearing $1 billion. Throughout the course of this 45-day bear market, crypto has seen little to no bearish fundamental developments."

The Kobeissi Letter attributed the 45-day bear market to excessive levels of leverage and sporadic liquidations, while highlighting that conditions will steady given market efficiency.

While the October 10 flash crash has spooked investors, fading bets on a December Fed rate cut have added to the selling momentum. FOMC members have raised concerns about elevated inflation, while downplaying a cooling labor market, suggesting a delay to further policy easing.

According to the CME FedWatch Tool, the chances of a December rate cut fell from 50.1% on November 13 to 39.1% on November 20. For context, the probability of a December cut stood at 98.8% on October 20. XRP has fallen 16.4% since October 20, reflecting the Fed's influence on sentiment.

Crucially, the absence of key US economic reports has left XRP and the broader crypto market in a tailspin. Updated inflation and jobs data could change the narrative if inflation softens and the labor market continues to cool rather than collapse.

Technical Outlook: Key XRP Price Levels

XRP slid 5.17% on Thursday, November 20, following the previous day's 4.94% loss, closing at $1.9985. The token underperformed the broader crypto market, which dropped 4.84%.

Thursday's extended sell-off left the token trading well below the 50-day and 200-day Exponential Moving Averages (EMAs), affirming bearish momentum.

Looking ahead, several events could trigger a shift in sentiment, potentially sending XRP toward $2.5.

Key technical levels to watch include:

· Support levels: $2.0, $1.9112, and $1.6147.

· 50-day EMA resistance: $2.4332.

· 200-day EMA resistance: $2.5455.

· Resistance levels: $2.2, $2.35, $2.5, $2.62, $2.8, $3.0, and $3.66.

Catalysts to Watch in the Sessions Ahead

Near-term price catalysts include:

· US Services PMI data.

· Fed speakers and policy signals.

· Canary XRP ETF and Bitwise XRP ETF flows.

· Blue-chip companies' positions on XRP as a treasury reserve asset.

· Regulatory milestones: Ripple's application for a US-chartered bank license, the progress of the Market Structure Bill on Capitol Hill.

Bearish Scenario: Risks Below $2.0

· Strong US PMI data cools bets on a Fed rate cut.

· Hawkish Fed speakers.

· XRP-spot ETFs report net outflows.

· The US Senate opposes crypto-friendly legislation, including the Market Structure Bill.

· Blue-chip companies dismiss XRP as a treasury reserve asset.

· OCC delays or rejects Ripple's US-chartered bank license.

These bearish scenarios could push XRP toward $2.0. If breached, $1.9112 would be the next key support level. A break below $1.9112 could expose the April low of $1.6147. Notably, XRP has been printing lower highs and lower lows, signaling further losses.

XRPUSD – Daily Chart – 211125 – Bearish

Bullish Scenario: Path to $2.5 Remains Challenging

· Weak Services PMI data.

· Dovish Fed speeches.

· XRP-spot ETFs report strong inflows.

· Blue-chip companies target XRP as a treasury reserve asset.

· Ripple secures a US-chartered bank license, and the US Senate passes the Market Structure Bill.

A breakout above the $2.2 resistance level could open the door to testing $2.35. A sustained move through $2.35 would pave the way toward the 50-day EMA, with $2.5 the next key resistance level. Buyer demand at $2.0 will be crucial over the coming sessions.

XRPUSD – Daily Chart – 211125 – Bullish

Outlook: $2.0 Remains the Pivotal Level

The absence of key US data and Fed policy uncertainty continue to weigh on market sentiment.

However, robust demand for XRP-spot ETFs could support a price recovery, potentially driving the token towards $2.2. The launch of the Franklin XRP ETF on Monday, November 24, could prove pivotal, given Franklin Templeton's prominence in the ETF space.

The next 72 hours could determine whether XRP extends its losses or begins a recovery toward $2.5. XRP-spot ETF flows will be crucial if the token is to begin decoupling from BTC.

Source: FX Empire

Risk Warnings and Disclaimers

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ING

Forex

Economic

South Korea: BOK to stand pat, while industrial production continues growing

The Bank of Korea will likely keep the policy rate at 2.50% on Thursday for another month, with a minor dissent vote expected. The Bank of Korea is likely to prioritise concerns about financial instability over inflation. Given no clear signs that housing prices have settled and the FX market remains volatile, the BoK has reason to keep rates unchanged. Also Thursday, the BoK releases its outlook report. Amid easing trade tensions and a stronger-than-anticipated semiconductor cycle, we believe the BoK will revise up its 2025 GDP forecast to 1.1% from 0.8% and its 2026 forecast to 1.9% from 1.6%. A GDP outlook below 2% is likely to support the BoK's continued easing policy stance. The recent hike in KTB yields reflected Governor Rhee's hawkish remarks - signalling a possible change of policy direction - during an earlier media interview. We think his remarks at press conference should be more balanced and highlight that policy decisions are data-dependent.

Industrial production is forecasted to increase for a second consecutive month, driven by strong chip output. The longer-than-expected Chuseok holiday, combined with the 2nd cash payout program, should boost service activity.

China: Industrial profit data expected to continue improving

China's industrial profits data, out Thursday, will round out the month's data releases. The data has been showing signs of improvement in the past few months, with profits so far up 3.2% YoY, year-to-date, through September, thanks to two straight months of YoY profit growth above 20% in August and September. This was boosted by a supportive base effect. Support from this effect should gradually wane in the 4Q data, but be enough to keep profit growth solidly positive in October. The industries that have been seeing strong export demand such as rail, ships, and aerospace, computers, communication, other electronic equipment manufacturing, and electrical machinery & equipment manufacturing have generally been outperformers so far this year. This trend should continue.

Japan: Tokyo CPI inflation supported by solid wage gains

Tokyo's consumer price index inflation is expected to rise 2.7% YoY in November, supported by solid wage gains. The weaker JPY probably added upward pressure. Industrial production will likely remain positive following Japan's trade agreement with the US. Despite a contraction in the third quarter, recent data suggest an economic recovery, supporting the Bank of Japan's continued policy normalisation. Market expectations for a December rate hike have fallen sharply over the week. We believe that recent BoJ comments indicate at least three board members support a more hawkish stance. However, it remains unclear if others will agree. We continue to forecast a rate hike in December, though the likelihood of a delay to January is rising.

Taiwan: Industrial production expected to accelerate slightly

We expect Taiwan's industrial production data, out Tuesday, to continue its streak of strong growth, accelerating slightly to 18.1% YoY. Strength has been quite heavily concentrated in the Information & Electronic Industries and remains vulnerable to a downturn if demand in this sector slows. While market debate on this possibility has increased recently, we do not yet see it affecting the October data.

India: Q3 GDP growth expected to slow modestly

We expect India's GDP growth in the third quarter to slow down modestly to 7.5% YoY. Export growth began to slow in 3Q due to the impact of 50% tariffs on US exports. But private consumption growth remained relatively strong, driven by GST rate cuts and the consequent boost in consumer goods purchases.

Key events in Asia next week

Source: ING

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Gerik

Economic

A Strategic Pivot Toward Resource Security

In a renewed push for resource security and economic alignment, the European Union is actively considering direct investments in Australian resources projects. Speaking from Melbourne, EU Trade Commissioner Maros Sefcovic revealed that discussions with Australian Resources Minister Madeleine King had centered on several mechanisms including equity stakes, long-term off-take agreements, and joint ventures aimed at deepening the EU’s participation in Australia’s resource sector.

These conversations come as both sides attempt to revive a long-stalled free trade agreement, one which could reshape access to critical minerals essential for Europe’s green and digital transitions. Sefcovic noted that the EU had already shortlisted several projects of interest, with a formal announcement expected imminently. This move reflects a strategic shift in the EU’s trade posture: from purely transactional trade negotiations toward more embedded, co-investment-led partnerships.

Lessons from Past Dependencies and the Case for Diversification

Sefcovic pointed to recent European overdependence on Russian oil and gas as a cautionary tale. The subsequent scramble for alternatives after the Ukraine invasion, combined with current constraints in global semiconductor and raw material supplies, has made clear the costs of reactive diversification. Rather than repeat this cycle, the EU is proactively seeking upstream control and supply stability in sectors like lithium, cobalt, and rare earths resources abundant in Australia.

The shift also mirrors strategies adopted by Japan, which has long used government-supported equity and processing investments to secure long-term access to essential inputs. By following a similar model, the EU aims to reduce exposure to geopolitical shocks and price volatility, especially in light of current global competition for these resources.

Rekindling Trade Talks with Mutual Strategic Interests

While a prior attempt to finalize an EU-Australia free trade deal collapsed in 2023 primarily due to disputes over agricultural market access the latest signals from both parties suggest renewed momentum. Australia has long sought more flexibility to export farm goods into Europe, whereas the EU is focusing on securing reliable access to Australian critical minerals and lowering barriers to its manufactured exports.

Sefcovic confirmed that another round of negotiations is scheduled for early next year, and the recent tone from both delegations is markedly more constructive. The strategic alignment on resource security is providing a new shared foundation for compromise.

A New Trade Framework Anchored in Resource Diplomacy

The EU’s willingness to move beyond tariff reduction into resource co-investment represents a broader evolution in trade policy, where economic security now intersects with environmental and geopolitical goals. Australia’s rich mineral base and stable regulatory environment make it a natural partner, especially as the EU seeks to de-risk supply chains for its ambitious climate and technology goals.

By transitioning from a buyer-supplier dynamic to one of strategic partnership, both the EU and Australia stand to benefit Europe through supply assurance, and Australia through capital inflows and diversified export markets. If successful, this model could reshape how future trade agreements are built in a resource-constrained and geopolitically complex world.

The EU’s direct engagement in Australian resource projects signals a maturing approach to trade and economic security. As both sides look to conclude a comprehensive agreement in 2026, these investments may serve not only as a foundation for shared prosperity but also as a geopolitical hedge in a world increasingly defined by competition for critical resources.

Source: Reuters

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Gerik

Economic

Exports Show Modest Recovery Amid Shifting Tariff Landscape

Japan’s export sector delivered a better-than-expected performance in October 2025, with a 3.6% year-on-year rise in total export value, exceeding the median forecast of 1.1%. This marked the second consecutive month of growth following a 4.2% increase in September. However, the data reveals an uneasy recovery as structural challenges in the global trade environment persist especially those involving the United States.

The recent moderation in the slump of U.S.-bound exports played a key role in October’s rebound, though these shipments still recorded a 3.1% annual decline. Exports to China, in contrast, grew 2.1%, offering some diversification support. Imports also grew 0.7% compared to October 2024, defying expectations for a contraction. This caused Japan to register a trade deficit of 231.8 billion yen (approximately $1.47 billion), which was nonetheless smaller than the projected 280.1 billion yen gap.

Tariff Recalibration Offers Partial Relief but Structural Weakness Remains

The more favorable trade figures follow the U.S.–Japan trade agreement formalized in September, which lowered punitive tariffs to a baseline 15%, replacing the prior rates of 27.5% on autos and 25% on many other goods. The tariff adjustment had an initial cushioning effect, particularly for manufacturers, yet the causal burden of tariffs on Japanese exports remains visible. Automakers who had previously absorbed costs by slashing export prices have now begun passing these costs on to American consumers reducing demand elasticity and leading to continued export sluggishness to the U.S. market.

The temporary easing in U.S.-bound export decline is therefore more correlational than causal in nature, reflecting the short-term benefit of tariff relief rather than an underlying structural improvement. Analysts suggest that without a sustained recovery in U.S. demand or a more favorable long-term trade policy, Japanese exports could stagnate again in coming months.

Domestic Demand and Capital Spending Offset Export Weakness

Japan’s overall economic outlook for the third quarter remains subdued, as recently released GDP data confirmed a contraction after six consecutive quarters of growth. Export volatility particularly due to the U.S. policy shock was a central driver of this downturn. Nonetheless, the contraction was partially offset by relatively firm domestic demand.

Strong capital expenditure and resilient private consumption offered key internal buffers against external drag. These segments point to underlying economic strength, but this internal momentum may not be sufficient to fully offset long-term export weakness if global demand, particularly from the U.S., continues to erode.

Prospects Clouded by U.S. Economic Softness and Global Uncertainty

The outlook for Japan’s export sector remains uncertain. Although October’s trade data shows marginal progress, persistent weakness in the U.S. economy could dampen any recovery. Should American consumers respond to higher Japanese product prices by shifting demand to domestic or alternative imports, Japanese manufacturers will face renewed headwinds.

Furthermore, Japan’s reliance on exports, particularly in high-value sectors like automobiles and electronics, renders it vulnerable to shifts in global demand and trade policy. Even with positive growth in exports to China, overall export-led recovery will depend on whether Japan can sustain diversified trade flows and avoid over-dependence on a volatile U.S. market.

Japan’s October trade performance provides cautious optimism but does not signal a broad-based rebound. The easing of U.S.-imposed tariffs delivered temporary relief, but long-term concerns persist as Japanese exporters contend with high costs, shifting consumer behavior in key markets, and rising geopolitical trade risks. Without a durable turnaround in external demand or new trade partnerships to offset these pressures, Japan’s export sector may continue to weigh down its broader economic recovery.

Source: Reuters

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FastBull Featured

Daily News

[Quick Facts]

1. U.S. Government reorganizes Energy Department, prioritizes fossil fuels and nuclear energy.

2. White House confirms discussions with Ukraine on Peace Plan.

3. Zelenskyy receives U.S. Peace Plan draft, to speak with Trump for consultations.

4. EU imposes sanctions on multiple Russian individuals.

5. U.S. President Trump modifies tariff scope on Brazilian goods.

6. UK Consumer Confidence Index falls broadly, budget outlook raises market concerns.

7. Miran: Interest rates should be adjusted closer to neutral levels.

8. Goolsbee: Unwilling to overly bet on "Transitory Inflation".

9. September nonfarm payrolls report: Job market continues "Slow but Steady" trend for the year after data gap.

[News Details]

U.S. Government reorganizes Energy Department, prioritizes fossil fuels and nuclear energy

On November 20th, local time, the U.S. Department of Energy (DOE) announced a restructuring that prioritizes oil and nuclear resources, replacing previous departments focused on renewable energy and energy efficiency. The DOE released a new organizational chart along with a brief statement, saying the changes align with President Trump's energy dominance agenda. The new structure includes several additional offices, such as the Office of Hydrocarbons and Geothermal Energy and the Office of Fusion. The Biden administration's Clean Energy Demonstration Office has been eliminated. The Office of Energy Efficiency and Renewable Energy also disappeared from the new structure. The Loan Programs Office, which provided financing for innovative energy projects, has been renamed the Office of Energy-Dominant Financing.

White House confirms discussions with Ukraine on Peace Plan

According to U.S. White House Press Secretary Karoline Leavitt, who confirmed at a routine press briefing on the afternoon of November 20th, local time, senior U.S. government officials recently met with Ukrainian counterparts to discuss a peace plan that should be acceptable to both Russia and Ukraine. Leavitt said U.S. Secretary of State Marco Rubio and U.S. Special Envoy for the Middle East Steve Witkoff were involved in these talks. The U.S. government is engaged in good dialogue with both parties to the conflict on how to end the Russia-Ukraine war.

Zelenskyy receives U.S. Peace Plan draft, to speak with Trump for consultations

On November 20th, local time, the Office of the President of Ukraine announced that President Volodymyr Zelenskyy has officially received the U.S.-submitted draft peace plan for the Russia-Ukraine conflict. The U.S. side assessed that the plan is expected to bring breakthrough progress to the long-stalled diplomatic process. Zelenskyy outlined fundamental principles related to the core interests of the Ukrainian people, and consensus was reached between Ukraine and the U.S. to further collaborate on the terms of the plan, aiming to achieve a solution that dignifies the end of the conflict. Ukraine reiterated that achieving peace has been a core objective since the outbreak of the conflict and supports all substantive proposals that lead to genuine peace. Ukraine is willing to engage in constructive cooperation with the U.S., Europe, and global partners to jointly advance the peace process. It is reported that Zelenskyy is expected to speak with President Trump in the coming days to conduct detailed consultations on existing diplomatic possibilities and the core elements of achieving peace.

EU imposes sanctions on multiple Russian individuals

On November 20th, local time, the Council of the European Union announced restrictive measures against 10 Russian individuals. The newly released list targets senior officials of the Russian Federal Penitentiary Service's Rostov Regional Directorate (including the Pretrial Detention Center No. 2) and members of the Russian judiciary. Those listed will face asset freezes, and EU citizens and companies are prohibited from providing them with funds. In addition, the sanctioned individuals will be subject to travel bans, preventing them from entering or transiting through EU countries. There was no immediate response from the Russian side.

U.S. President Trump modifies tariff scope on Brazilian goods

On the 20th, local time, the White House announced that President Trump signed an executive order modifying the tariff scope on imports from Brazil. While maintaining the 40% ad valorem tariff on some goods, certain specific Brazilian agricultural products entering the U.S. after 00:00 Eastern Time on November 13th, have had additional ad valorem tariffs removed, in light of progress in negotiations. The White House stated that the move aims to balance national security concerns with the promotion of trade relations with Brazil.

UK Consumer Confidence Index falls broadly, budget outlook raises market concerns

Ahead of the UK government's upcoming budget announcement, a closely watched consumer confidence index saw an across-the-board decline. Data from research firm GfK showed the overall confidence index dropped by 2 points to -19 in November, reflecting widespread public concern about personal finances, willingness to make major purchases, and the outlook for the UK economy.

Neil Bellamy, Head of GfK Consumer Insights, said this is a set of bleak figures ahead of the budget release. The public is bracing for tough news, and the current environment does little to improve expectations. The decline is mainly due to market expectations that the Labour government will introduce tax hikes in the budget, highlighting the significant impact of fiscal policy uncertainty on public sentiment.

Miran: Interest rates should be adjusted closer to neutral levels

Federal Reserve Governor Stephen Miran reiterated his view that monetary policy is overly restrictive and that officials should adjust interest rates closer to a neutral level — one that neither slows nor stimulates the economy. Speaking in New York on Thursday at an event hosted by the American Investment Council, Milan said he believes the Fed has a responsibility to adjust policy to be closer to a neutral stance, so it is not imposing such significant restraint on the economy. Milan has previously stated that it would be appropriate to cut interest rates at the next policy meeting on December 9th–10th.

Goolsbee: Unwilling to overly bet on "Transitory Inflation"

On Thursday, Chicago Fed President Austan Goolsbee made a speech, saying inflation "seems to have kind of stalled out and, if anything, given warnings of going the wrong way." "My unease is about the short-run front-loading of too many rate cuts and counting on … the inflation uptick that we've seen being transitory."

September jobs data did not alter the employment landscape, showing a stable and slightly cooling labor market, while jobless claims data also failed to indicate rapid deterioration.

September nonfarm payrolls report: Job market continues "Slow but Steady" trend for the year after data gap

Nonfarm payrolls extend the "slow but steady" trend in September after the data gap period. Jobs increased by 119,000, exceeding the Dow Jones consensus estimate of 50,000, demonstrating resilience in job growth. However, details of the report also revealed market complexities. Data for the prior two months were revised downward, with August now showing a loss of 4,000 jobs. Meanwhile, the unemployment rate ticked up slightly to 4.4%, the highest since October 2021, although a broader measure that includes those not looking for jobs or working part-time for economic reasons edged lower to 8%.

The report ends a data drought on the labor market that began in early September and continued through the record 44-day government shutdown. Overall, the report shows the labor market entered the autumn months on much the same footing it has been all year – a slow but steady pace, with firms reluctant both to hire many new workers or lay off existing workforce during a time of unusual economic volatility spurred by aggressive policy actions in President Donald Trump's White House.

[Today's Focus]

UTC+8 16:15 France November Manufacturing PMI Flash

UTC+8 16:30 Germany November Manufacturing PMI Flash

UTC+8 17:00 Eurozone November Manufacturing PMI Flash

UTC+8 17:30 UK November Manufacturing PMI Flash

UTC+8 20:30 Speech by New York Fed President John Williams

UTC+8 20:40 Speech by Swiss National Bank President Martin Schlegel

UTC+8 21:30 Canada September Retail Sales MoM

UTC+8 21:30 Speech by Federal Reserve Governor Michael Barr

UTC+8 21:45 Speech by Federal Reserve Vice Chair for Supervision Philip Jefferson on Financial Stability

UTC+8 22:00 Speech by Dallas Fed President Lorie Logan

UTC+8 22:45 U.S. November S&P Global Manufacturing PMI Flash

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Gerik

Economic

Commodity

Widening Tariff Relief Amid Economic Pressures

In a significant policy reversal, President Donald Trump signed an executive order removing the 40% tariffs he previously imposed on a range of Brazilian food imports. This comes just a week after he canceled a 10% duty on the same items but had initially left the more punitive tariff untouched. The decision is retroactive to November 13 and marks a strategic pivot aimed at addressing growing domestic frustration over persistent grocery inflation ahead of the 2026 election cycle.

The tariff rollback comes in response to mounting voter dissatisfaction over the rising cost of essential goods. With coffee, orange juice, and beef prices reaching record highs due to global shortages and disrupted supply chains, the removal of import taxes on these Brazilian staples is expected to provide some economic relief to American households. The causal relationship between the earlier imposition of tariffs and the inflationary pressures on consumer prices, especially for coffee and beef, underscores the administration’s urgent need to pivot.

Although Trump had initially justified the steep tariffs as a punitive measure against Brazil for prosecuting former President Jair Bolsonaro his political ally the economic fallout from that policy prompted a reevaluation. Now, affordability for consumers has taken precedence over political messaging.

Diplomatic Reset Between Two Hemispheric Powers

The Brazilian government, led by President Luiz Inácio Lula da Silva, welcomed the change as a diplomatic victory. During remarks at the São Paulo Auto Show, Lula praised the decision, indicating it marked a new chapter in US-Brazil relations. Agriculture Minister Carlos Fávaro further emphasized that the renewed cooperation between the two countries benefits not just their citizens, but the broader Americas.

The move also marks a diplomatic shift. Months of strained relations driven by US-imposed sanctions have been replaced by renewed high-level dialogue. After brief interactions in New York and a more substantive meeting in Malaysia, Lula successfully lobbied Trump to lift tariffs and ease sanctions, leveraging Brazil’s trade deficit with the US as a negotiating chip.

Market and Industry Reactions Signal Approval

Industry leaders in Brazil greeted the announcement with optimism. The Brazilian Beef Exporters Association and Cecafé, the coffee exporters council, celebrated the move as a victory for fair competition and reciprocal trade. Cecafé Director General Marcos Matos noted that ongoing negotiations with US roasters had laid the groundwork for this breakthrough, emphasizing the role of coordinated government and industry efforts.

From an economic perspective, the removal of the 40% tariffs may also reverse the trend of declining Brazilian shipments to the US and help stabilize supply in the American market. This correlation between tariff easing and supply normalization could dampen the inflationary pressures that have plagued key food categories for over a year.

Economic Pragmatism Over Political Retribution

Trump’s administration defended the tariff exemptions as consistent with his broader trade strategy, pointing out that they were applied to products that the US does not produce in sufficient volume domestically. Commerce Secretary Howard Lutnick noted that this is not a retreat but a pragmatic shift: allowing exemptions where bilateral deals have stalled, with a focus on affordability for American families.

This justification reflects a nuanced admission that the sweeping tariffs imposed earlier may have contributed to inflation. While the administration has avoided directly linking the tariffs to rising consumer costs, the timing and scope of this rollback suggest a causally motivated decision shaped by economic and electoral realities.

Trump’s expanded tariff relief on Brazilian food imports signals a recalibrated strategy where domestic economic concerns and international diplomacy intersect. The move not only addresses voter anxiety over the cost of living but also represents a thaw in US-Brazil relations after months of tension. Whether this shift restores long-term consumer price stability or simply provides temporary relief will depend on market responses and further diplomatic coordination. Nonetheless, the policy reversal illustrates how economic pragmatism can override politically motivated trade aggression when voter sentiment is at stake.

Source: Bloomberg

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Trump Eases Brazilian Food Tariffs to Combat Rising Grocery Prices and Repair Diplomatic Ties

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