Trump Launches Probe into Critical Minerals as Global Trade War Escalates

Economic

Summary:

US President Donald Trump has launched an investigation into critical minerals, signalling further tariffs in the natural resources sector.

US President Donald Trump has signed an executive order to initiate an investigation into critical minerals, potentially leading to additional tariffs on industrial resources. The move follows recent probes into chip and pharmaceutical imports, signalling a further broadening of the global trade war.

The investigation, under Section 232 of the Trade Expansion Act of 1962, aims to “determine the effects on national security of imports of processed critical minerals and their derivative products,” according to the official document. “Critical minerals, including rare earth elements, in the form of processed minerals are essential raw materials and critical production inputs required for economic and national security.” The same law was previously used by Trump to impose 25% tariffs on steel and aluminium, as well as to launch a probe into copper imports.

Last month, the president signed an executive order to boost domestic production of critical minerals by invoking the Defence Production Act, providing support such as financing and loans to the sector. The measure is widely seen as targeting China, which dominates the global supply chain.

Trump’s strategic approach to leverage US power in the trade war with China

According to the White House, the US relies on imports of 15 critical minerals, 70% of which originate from China. Last Friday, Beijing announced export restrictions on a wide range of critical minerals, such as germanium, gallium, antimony, and magnets, in response to Trump’s sharp tariff hikes.

The US has only one rare earth mine and no domestic smelters, leaving it heavily reliant on China for natural resources, including rare earths and critical minerals—vital components in electric devices, battery-powered vehicles, aircraft, and defence equipment. A TD Economics report reveals that China dominates the global production of more than half of the 50 critical minerals identified by the US government in 2022. It also maintains a near-monopoly in refining, processing 90% of global rare earth elements. To strengthen its hand in the trade war, the US will need to diversify sourcing of these industrial materials.

“Processed critical minerals and their derivative products face significant global supply chain vulnerabilities and market distortions due to reliance on a small number of foreign suppliers,” Tuesday’s investigation document states, “The dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defence readiness, price stability, and economic prosperity and resilience.”

In February, Trump demanded $500 billion (€442 billion) worth of Ukraine’s rare earth and critical minerals as part of peace talks, a move also seen as a strategic effort to enhance the US’s position against China.

Market responses

Australia’s major mining stocks fell during Wednesday’s Asian session, with shares of BHP falling 1.2%, Rio Tinto sliding 2.3%, and Phibara Minerals dropping 2.9% as of 5:52 am CEST. In commodities, iron ore (CFR China) futures on the SGX declined 0.35%, while copper futures fell 0.91%.

The downturn in the resource sector may also be linked to reports that Nvidia is facing new US export restrictions to China, which could cost the tech giant billions of dollars. These fresh regulations are expected to dampen demand for industrial resources such as copper and certain critical minerals used in chip manufacturing. Combined with Trump’s latest probe, the news has contributed to broader market weakness.

European markets may soon feel the ripple effects of the intensifying global trade war, with stock futures pointing to a lower open across major indices.

Source: Euronews

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Warren Takunda

Economic

UK inflation dropped to 2.6% in March, increasing the pressure on Bank of England policymakers to cut interest rates next month as Donald Trump’s tariff wars cast an uncertain outlook.

Prices growth was weak ahead of an expected rise in April as households begin to pay higher council tax and utility bills.

Last month’s reading came in below City forecasts of a fall to 2.7%. It comes after the consumer prices index fell in February to 2.8%, down from 3% in January.

The Office for National Statistics (ONS) said falling fuel prices and slowing increases in the cost of a night out drove inflation lower, although this was offset by price rises for clothing and footwear. The price of food was also a factor in dragging down prices growth after it was flat in March compared with rising prices in the same month last year.

The average price of petrol fell by 1.6p a litre between February and March 2025 to stand at 137.5p a litre, down from 144.8p a litre in March 2024, the ONS said.

Trump’s tariff announcements this month – in which huge levies were imposed on US imports before market turmoil sparked an abrupt U-turn – have clouded the picture for inflation, with the turmoil widely expected to dampen growth. UK Inflation Falls to 2.6%, Increasing Pressure on Bank to Cut Interest Rates_1

UK Inflation Falls to 2.6%, Increasing Pressure on Bank to Cut Interest Rates_1

Ruth Gregory, the deputy chief economist at the consultancy Capital Economics, said inflation was likely to hit 3% in April due to a 6.4% month-on-month rise in utility bills and 26% month-on-month leap in water bills.

She estimated that the peak inflation rate this year would be 3.5%, “but we doubt it will stay there long. We expect the weak economy to prompt an easing in domestic inflation.”

Before Trump’s tariff announcements several analysts had predicted that inflation would start rising from April onwards, peaking at about 4% over the summer before falling back next year.

However, the US president’s trade war has cast doubt on those forecasts for CPI, which could peak at a lower rate if China is allowed to dump goods in Europe that were previously destined for the US.

Gregory said her forecasts were in doubt as Trump’s tariffs begin to harm the global economy and drag down prices across the world. It was possible that inflation would peak at a much lower rate, though the outlook remained uncertain.

With inflation remaining about the Bank of England’s 2% target, financial markets are betting on an 86% probability of an interest rate cut at its 8 May meeting, which would lower the key base rate by a quarter of a percentage point to 4.25%.

One of the Bank’s previous deputy governors, Charlie Bean, said last week that tariff uncertainty meant the Bank should set aside concerns about inflation and cut the cost of borrowing by at least half a per cent, while the former prime minister Gordon Brown has called for a coordinated rate cut by all major central banks.

Wage increases remain stubbornly above inflation despite a slowdown in the jobs market. Earnings, excluding bonuses, rose to 5.9%, from a revised 5.8% in the previous rolling three-month period to the end of January, figures showed on Tuesday. This was slightly below a prediction of 6% from City economists.

Jobs figures showed a weakening labour market as employment in March fell and firms cut back on job adverts.

The chancellor, Rachel Reeves, said: “Inflation falling for two months in a row, wages growing faster than prices and positive growth figures are encouraging signs that our plan for change is working, but there is more to be done.

“I know many families are still struggling with the cost of living and this is an anxious time because of a changing world. That is why the government has boosted pay for 3 million people by increasing the minimum wage, frozen fuel duty and begun rolling out free breakfast clubs in primary schools.”

The shadow chancellor, Mel Stride, said inflation was expected to increase further this year “because of the chancellor’s choices”.He said: “The Conservatives left Labour with inflation bang on target but the chancellor’s reckless union payouts, tax hikes, and borrowing binge is driving up the cost of living.“Be in no doubt, the chancellor’s choices are keeping inflation higher for longer and working families are paying the price.”

Source: Theguardian

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Warren Takunda

Economic

Stocks

World shares were mostly lower Wednesday as Nvidia and other technology companies were walloped by tighter U.S. controls on exports of advanced computer chips used for artificial intelligence.

The future for the S&P 500 skidded 1.2% while that for the Dow Jones Industrial Average lost 0.6%.

Chip maker Nvidia’s shares fell 6.3% in after-hours trading after it said the U.S. had imposed stricter controls on its exports of one of its computer chips designed for use in artificial intelligence. Rival chip maker AMD’s shares dropped 7.1% after U.S. markets closed.

Trade war concerns also were revived by a Trump administration announcement of an investigation into imports of critical minerals such as rare earths, which are used in smart phones, electric vehicles and many other products.

In early European trading, Britain’s FTSE 100 lost 0.2% to 8,233.10 after the government said inflation in the U.K. fell for the second month running in March largely as a result of lower gas prices.

Germany’s DAX fell 0.7% to 21,107.68, while the CAC 40 in Paris gave up 0.6% to 7,289.67.

Stocks in China led the regional declines after the Chinese government reported the world’s second largest economy grew at a strong 5.4% annual rate in the last quarter, helped by strong industrial production, retail sales and exports. But in quarterly terms, growth slowed to 1.2% in January-March from 1.6% in the last quarter of 2024.

Hong Kong’s Hang Seng dropped 2% to 20,922.54, while the Shanghai Composite index regained lost ground, edging 0.1% higher to 3,271.19.

Private sector economists have been downgrading their forecasts after President Donald Trump recently pushed his tariffs on most imports from China to 145%, while China raised its duties on imports from the U.S. to 125%.

Analysts at ANZ Research said activity in the current quarter is already weakening.

“Our view is that the tariff shock is caused by the unpredictability rather than the tariff itself. President Trump’s announcements have affected business sentiment and activity,” Raymond Yeung and other ANZ researchers said in a report after the China data was released.

In Tokyo, the Nikkei 225 index shed 1% to 33,920.40, pulled lower by big tech companies like chip testing equipment maker Advantest, whose shares dropped 6.6% and Disco Corp. which plunged 8%.

South Korea’s Kospi fell 1.2% to 2,447.43, while in Australia, the S&P/ASX 200 edged less than 0.1% lower to 7,758.90.

India’s Sensex was little changed and Bangkok’s SET edged 0.1% lower.

On Tuesday, U.S. stocks drifted, with the S&P 500 slipping 0.2% and the Dow down 0.4%. The Nasdaq composite edged less than 0.1% lower.

Uncertainty over President Donald Trump’s tariffs kept investors watching to see what comes next.

The U.S. bond market appeared to calm after its sudden and sharp moves last week shook confidence in the status of U.S. government bonds as a safe haven against risks.

The yield on the 10-year Treasury was steady at 4.33%, down from 4.38% late Monday and 4.48% at the end of last week. A week earlier it had been at just 4.01%. Yields usually drop when investors are jittery, so this week’s moves have offered reassurance.

The value of the U.S. dollar also steadied after tumbling last week, raising more worries that Trump’s trade war also may be undermining its status as a safe-haven investment.

Palantir Technologies climbed 6.2% for a second day of gains after NATO said it would use the company’s artificial-intelligence capabilities in its allied command operations.

In other dealings early Wednesday, U.S. benchmark crude oil lost 69 cents to $60.64 per barrel, while Brent crude, the international standard, fell 65 cents to $64.01 per barrel.

Trump’s tariffs have raised expectations that economies will slow, denting demand for oil and other resources.

The U.S. dollar fell to 142.26 Japanese yen from 143.24 yen. The euro rose to $1.1377 from $1.1283.

Source: AP

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Michelle

Political

Iran's right to enrich uranium is not negotiable, Foreign Minister Abbas Araqchi said on Wednesday, ahead of a second round of talks in Oman this weekend with the United States about Tehran's disputed nuclear programme.

Araqchi was responding to a comment made on Tuesday by the U.S. top negotiator Steve Witkoff, who said Tehran must "stop and eliminate its nuclear enrichment" to reach a deal with Washington.

"We have heard contradictory statements from Witkoff, but real positions will be made clear at the negotiating table," Araqchi said.

"We are ready to build trust regarding possible concerns over Iran's enrichment (of uranium), but the principle of enrichment is not negotiable."

Iran and the U.S. are due to hold a second round of talks in Oman on Saturday over Tehran's escalating nuclear programme, withPresident Donald Trumpthreatening military action if there is no deal.

Before the talks, Araqchi will deliver a message from Iran's Supreme Leader Ali Khamenei to Russian President Vladimir Putin on a trip to Russia, Iranian state media reported on Wednesday.

The Kremlin on Tuesday declined to comment when asked if Russia was ready to take control of Iran's stocks of enriched uranium as part of a possible future nuclear deal between Iran and the United States.

The Guardian reported that Tehran was expected to reject a U.S. proposal to transfer its stockpile of enriched uranium to a third country such as Russia as part of an agreement that Washington is seeking to scale back Iran's nuclear programme.

Source: TradingView

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Glendon

Political

Economic

China–U.S. Trade War

16th April 2025 – (Washington) The U.S. government has levied a 125% equivalent tariff on Chinese goods, further augmented by a previously imposed 20% tariff related to the fentanyl issue. This cumulative action has propelled the effective tariff rate on Chinese imports to a staggering 145%. The White House’s recent administrative order, disclosed on Tuesday (15th), has initiated a national security investigation regarding crucial mineral imports, outlining that Chinese products could face tariffs as high as 245% due to retaliatory actions by China.

Despite the absence of formal announcements concerning new tariff measures by the White House, recent data compiled by US media outlets has illustrated varying tariff rates for different Chinese imports. Notably, items such as syringes and needles could potentially face an exorbitant tariff rate of 245%, attributed to a combination of pre-existing tariffs, steel, aluminium, and automobile tariffs, additional levies, and reciprocal tariffs.

The intricate web of trade rules and tariffs has generated complexities for US companies relying on Chinese suppliers, as the average tax rates on imports have surpassed the product prices themselves. Understanding the implications of these tariffs on specific goods is crucial for businesses, as the import duties can significantly impact procurement decisions, cost structures, and ultimately, consumer prices.

The introduction of the new 125% tariff under President Trump’s administration is expected to compound existing duties across various categories, creating a layered effect on the overall tariff rates applied to Chinese goods. The tariffs span different categories including base rates, pre-2025 protectionist tariffs, steel, aluminium, automobile tariffs, as well as tariffs related to the fentanyl issue and reciprocal actions between the US and China.

For specific goods imported from China, such as syringes, lithium-ion batteries, wool sweaters, electric cars, and toys, the tariff rates vary significantly, with some products facing rates as high as 245%. These tariffs, combined with the complexities of trade regulations and exemptions, underscore the challenges faced by businesses in navigating the evolving trade landscape between the U.S. and China.

Source: The White House

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Warren Takunda

Economic

London stocks were set to fall at the open on Wednesday following downbeat sessions in the US and Asia, as investors mulled the latest China GDP data and UK inflation figures.

The FTSE 100 was called to open around 60 points lower.

Data released earlier by China’s National Statistics Bureau showed that the economy grew 5.4% in the first quarter, beating expectations for 5.2% growth.

The bureau said the economy was "off to a good and steady start" but also cautioned that "the external environment is becoming more complex and severe" and said that domestic demand remained insufficient.

On home shores, data from the Office for National Statistics showed that consumer price inflation rose 2.6% in the year to March, down from 2.8% the month before and coming in below expectations of 2.7%.

ONS chief economist Grant Fitzner said: "Inflation eased again in March, driven by a variety of factors including falling fuel prices and unchanged food costs compared with the price rises we saw this time last year.

"The only significant offset came from the price of clothes, which rose strongly this month, following the unusual decrease in February."

In corporate news, Bunzl lowered its guidance for 2025 after a worse-than-expected start to the year, with profits down "significantly" in the first quarter due to a challenging economic backdrop.

The international distribution and services group said it now expects only a “moderate” increase in revenues at constant exchange rates this year, down from an earlier projection for “robust growth”, while the operating margin is now expected to reduce to 8.0% compared with the initial targets for no change from 8.3% in 2024.

Barratt Redrow reported a stable trading performance for the quarter ended 30 March, with a slight year-on-year increase in its core private reservation rate and a total of 3,717 home completions, keeping it on track to deliver full-year guidance of 16,800 to 17,200 homes.

The housebuilder said the integration of Redrow was progressing well, with office consolidations, systems transitions, and procurement synergies supporting a £100m cost-saving target.

Despite a 10% year-on-year decline in forward sales volumes, the value of the private order book rose 3.3%, supported by modest price inflation and a strong balance sheet with £508m in net cash.

Source: Sharecast

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Michelle

Economic

Forex

FundamentalOverview

The USD remains underpressure against most major currencies although the fundamental backdropremains unclear. The most popular narrative is that everyone is selling USassets, and the greenback is losing its reserve status as a consequence of theaggressive trade war.

Such big claims aregenerally made at near term tops or bottoms, so it calls for caution. Anyway, that’s thetrend for now and we will need some catalyst to reverse it. Maybe positive newson trade negotiations front could see the market scale back the rate cutexpectations for the Fed and provide a relief rally for the greenback.

For now, we got just a couple of disappointing headlines with the US banning the sale of Nvidia chips to China and European officials suggesting that the tariffs could stay as negotiations stall. We will see how things will evolve in the next days and weeks.

On the JPY side, thecurrency has been driven mainly by global events rather than domesticfundamentals. It’s been supported more by the risk-off flows rather thaninterest rates expectations as the market doesn’t see the BoJ hiking ratesanymore this year. In fact, BoJGovernor Ueda today sounded like more tightening now is out of question andthe central bank might even resort to some easing in case things deterioratefurther.

USDJPYTechnical Analysis – Daily Timeframe

USDJPY Daily

On the daily chart, we cansee that USDJPY continues its downward trajectory towards the 140.00 handle. Ifthe price gets there, we can expect the buyers to step in with a defined riskbelow the level to position for a rally back into the major trendline. The sellers, on the other hand,will want to see the price breaking lower to increase the bearish bets into newlows.

USDJPY TechnicalAnalysis – 4 hour Timeframe

USDJPY 4 hour

On the 4 hour chart, we cansee that the price rolled back to the 142.05 low as the selling pressure returned.From a risk management perspective, the sellers will have a better risk toreward setup around the 144.56 level to position for further downside. Thebuyers, on the other hand, will want to see the price breaking above the 144.56level to start targeting a bigger pullback into the 148.25 level next.

USDJPY TechnicalAnalysis – 1 hour Timeframe

USDJPY 1 hour

On the 1 hour chart, we cansee that the recent low around the 142.00 handle has been holding up prettywell. This is where we can expect the buyers to step in with a defined riskbelow the level to position for a pullback into the 144.56 level. The sellers,on the other hand, will look for a break lower to increase the bearish betsinto the 140.00 handle next. The red lines define the average daily range for today.