U.S. Tariffs Take Global Effect as Economic Strains Emerge from Within

Economic

Summary:

President Trump’s sweeping new tariffs took effect Thursday, targeting over 60 countries just as signs of economic stress began surfacing in the U.S. economy...

Tariffs Implemented Amid Shifting Economic Landscape

Starting just after midnight on August 7, 2025, new U.S. import tariffs came into force, covering goods from over 60 countries and the European Union. The imposed rates range from 10% to 20%, with the European Union, Japan, and South Korea facing 15%, and Taiwan, Vietnam, and Bangladesh at 20%. In India’s case, cumulative tariffs now reach 50%, following its continued import of Russian oil. In tandem, President Trump announced a future 100% tariff on computer chips, alongside looming taxes on pharmaceutical imports.

While President Trump argues that the U.S. is "taking in hundreds of billions of dollars in tariffs" and that economic growth will be "unprecedented," no confirmed figures were provided. The administration believes the tariffs will redirect investment back into the U.S. and bolster job creation in manufacturing, framing the policy as a long-term rebalancing tool.

Early Data Suggests Rising Domestic Pressures

However, economic signals suggest mounting internal strain, contradicting White House optimism. Since the initial tariff announcements in April, U.S. hiring momentum has weakened, inflationary pressure has increased, and home values have begun to decline in key metro areas. According to John Silvia of Dynamic Economic Strategy, the economy’s underlying productivity has dropped, contributing to a decline in real wages and hiring.

These developments show a likely causal link between protectionist trade policy and economic deceleration. Rather than an immediate collapse, economists anticipate a gradual drag effect described by Georgetown’s Brad Jensen as “fine sand in the gears” slowing the economy subtly but persistently.

Trade Deficit and Manufacturing Goals Contradicted by Outcomes

Contrary to Trump’s stated aim of reducing the trade imbalance, data for the first half of 2025 show the U.S. trade deficit reaching $582.7 billion up 38% from the same period in 2024. This surge resulted in part from a front-loading of imports by companies seeking to avoid the new levies. At the same time, factory jobs one of the central targets of Trump’s economic platform have not rebounded. Instead, job losses continue, alongside a 2.9% drop in construction spending over the past year.

The inconsistency between policy intentions and observed outcomes reveals a disconnect between theoretical economic modeling and on-the-ground behavior by firms navigating cost pressures and supply chain disruptions.

Policy Execution Muddied by Legal and Administrative Uncertainty

The process leading to Thursday’s implementation reflected administrative disarray. Due to vague language in a July 31 directive delaying the tariffs from August 1, trade partners and even White House officials were unsure of the actual start date. Kevin Hassett, Director of the National Economic Council, declined to confirm the timeline, deferring questions to the U.S. Trade Representative’s Office.

Further complications could arise from pending legal challenges. Trump’s invocation of a 1977 emergency economic powers statute is now under judicial review. Should courts rule that the president exceeded his authority, the administration may be forced to seek alternative legal pathways to justify ongoing tariff enforcement.

Political Reactions Reflect Diverging Expectations

Former Republican House Speaker Paul Ryan, once an ally of Trump, voiced skepticism about the tariffs’ legality and strategic foundation, describing the moves as driven by "whims" rather than policy coherence. Meanwhile, Trump continues to project confidence, bolstered by strong stock market performance and recent tax and spending legislation. The S&P 500 has gained over 25% since its April low, which the administration sees as validation for its economic course.

However, critics warn that market gains may not reflect broader economic health. Rachel West of The Century Foundation cautioned that while Trump may appear unfazed by the uncertainty, American households are already feeling the consequences through higher prices and deteriorating economic clarity.

Uncertainty Overshadows Economic Ambitions

While the Trump administration envisions the newly enacted tariffs as a catalyst for domestic revitalization, early evidence suggests a more complex and adverse economic reality. The policy’s short-term impact has included a widening trade deficit, softening job growth, and rising living costs outcomes at odds with its stated goals.

With legal, economic, and political uncertainties all converging, the long-term effects of this trade strategy remain unclear. The durability of the U.S. economy in the face of these layered disruptions will depend not only on policy outcomes but also on how effectively American institutions respond to the uncertainty they now confront.

Source: Reuters

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Economic

Tariff Implementation Coincides with Emerging Economic Slowdown

Beginning just after midnight Thursday, President Trump’s administration activated broad-based import taxes, with rates starting at 10% and reaching as high as 50% for some countries. The rollout applies to goods from the European Union, Japan, South Korea, Taiwan, Vietnam, Bangladesh, and others. While the administration believes these measures will attract foreign investment and revive domestic manufacturing, current economic indicators are telling a different story.

According to data released in recent weeks, key segments of the U.S. economy began showing signs of weakening shortly after the initial tariff announcements in April. Hiring activity has stalled, real wages have slipped under inflationary pressures, and home values in major markets have begun to decline. These developments suggest a negative correlation between the escalation of tariff threats and overall productivity, as identified by John Silvia of Dynamic Economic Strategy.

Silvia emphasized that the new tariff structure has begun to reduce economic efficiency, limiting firms' capacity to maintain wages and investment. This interpretation reflects the concern that the policy’s impact may not be immediately catastrophic but will instead manifest gradually through lower output and higher costs over time.

Trump Administration Projects Long-Term Gains Despite Short-Term Disruption

Despite the economic turbulence, the White House maintains confidence that the tariff regime will ultimately lead to stronger growth. President Trump insisted the U.S. would benefit from “unprecedented” gains and billions in tariff revenues, even though he admitted specific revenue projections remain uncertain due to ongoing revisions to the tariff schedule.

Trump's position is that clear policy direction however disruptive can incentivize corporate planning, leading to more investment and reshoring of supply chains. The administration views the current period as one of adjustment, after which they expect the economy to rebalance toward domestic industrial production.

However, this confidence lacks consensus support among economists and market participants. Paul Ryan, former Republican House speaker and past Trump ally, openly criticized the ad hoc nature of the tariffs, pointing to the lack of a coherent economic rationale. Legal uncertainty also clouds the initiative, as the use of emergency powers under a 1977 statute faces scrutiny from U.S. appellate courts.

Signs of Structural Economic Drag Surface in Trade and Labor Data

The broader economic data reinforces a more cautious outlook. For the first half of 2025, the U.S. trade deficit grew to $582.7 billion 38% higher than the same period in 2024 as firms rushed to front-load imports before tariffs took effect. This unintended surge undercuts the stated goal of reducing the trade imbalance and suggests that market behavior is adjusting in ways that may temporarily mask the policy’s true impact.

Simultaneously, construction spending has declined by 2.9% over the past year, and factory employment a central target of Trump’s industrial strategy has contracted. These trends imply that rising import costs are not being offset by new domestic production or hiring, at least in the short term.

Markets Resilient, But Underlying Risk Builds

Paradoxically, financial markets have shown resilience throughout the trade drama. The S&P 500 has climbed more than 25% since its April lows, bolstered by tax cuts and government spending measures passed on July 4. This bullish performance has likely contributed to the administration’s sustained optimism. However, analysts caution that asset price increases may be decoupled from real economic activity, particularly if corporate earnings deteriorate under sustained cost pressures from tariffs.

Rachel West, a former labor policy official in the Biden administration, argued that while markets can absorb uncertainty in the short term, ordinary Americans are already experiencing the real-world consequences through higher prices and diminished job security. She notes that the true burden of policy unpredictability tends to fall on workers and consumers rather than policymakers.

High-Stakes Gamble With Uncertain Long-Term Payoff

As Trump’s comprehensive tariff strategy moves from threat to reality, its economic effects are beginning to materialize in measurable ways. While the administration promotes a vision of manufacturing revival and trade rebalancing, the immediate outcomes include slower hiring, declining wage growth, and deepening legal and diplomatic tensions.

The causal chain between protectionist policy and economic deceleration is not yet fully defined, but early indicators suggest that the U.S. economy is beginning to feel the weight of its own trade weapon. Whether this path leads to renewal or stagnation will depend not only on domestic adaptation, but also on how international partners respond to an increasingly unpredictable U.S. trade posture.

Source: Reuters

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Economic

Forex

Dollar Continues Slide as Market Anticipates Fed Easing

The dollar index, which tracks the greenback against a basket of major currencies, edged up slightly to 98.259 in early Thursday trading after dropping 0.6% the previous session. Despite this marginal rebound, the broader trend reflects investor pessimism over the U.S. economic trajectory and monetary policy direction.

The catalyst for the dollar’s weakness lies in recent labor data. Last Friday’s nonfarm payrolls report fell short of expectations, with downward revisions to the prior two months, signaling an unexpectedly sharp cooling in the job market. The Labor Department is expected to confirm this trend, with initial jobless claims for the week ending August 2 projected to rise to 221,000 and continued claims also anticipated to increase.

This sequence of labor market disappointments has reshaped rate expectations. Fed funds futures now price in a 94% probability of a 25 basis point cut in September up from just 48% one week ago highlighting a rapid shift in market sentiment. Overall, traders are pricing in over 60 basis points of cuts before the end of 2025, underscoring concerns that economic softness may be more structural than transitory.

Political Tensions Erode Confidence in Policy Independence

Further weighing on the dollar is a growing perception of political interference in U.S. institutions. Last week, President Trump dismissed the official overseeing labor statistics, allegedly due to dissatisfaction with the reported data. This move has raised alarms over the perceived politicization of key economic agencies and the potential erosion of data integrity.

Trump’s influence is also expanding at the Federal Reserve. He has announced plans to name a successor for outgoing Fed Governor Adriana Kugler and is reportedly narrowing the shortlist for Jerome Powell’s replacement as Fed Chair. Analysts warn that these developments could weaken the Fed’s perceived independence, especially if the new appointees favor looser monetary policy aligned with Trump’s political agenda.

These political dynamics have a direct correlation with market behavior, amplifying concerns about the dollar’s reliability as a store of value and a monetary benchmark. IG analyst Tony Sycamore noted that both institutional risk and soft macro data are exerting pressure on the currency simultaneously.

Euro Finds Support Amid Prospects for Ukraine Peace Talks

While the dollar softened, the euro held recent gains, trading at $1.1654 after a 0.7% surge in the previous session. Its strength reflects not only dollar weakness but also optimism surrounding potential diplomatic progress in ending the war in Ukraine. A meeting between President Trump and Russian President Vladimir Putin is reportedly being planned for next week, a development seen as potentially easing geopolitical risk in Europe.

This anticipation of diplomatic engagement has provided a relative boost to the euro, especially as investors reallocate away from the dollar amid rising U.S. uncertainty. If peace talks make meaningful progress, the euro could continue to benefit from improved regional stability and greater investor confidence.

Broader Currency and Asset Market Reactions Reflect Risk Reassessment

Sterling remained stable at $1.33505, with traders awaiting direction from the Bank of England’s monetary policy announcement. The Australian dollar was also largely unchanged at $0.65. Meanwhile, the Japanese yen held at 147.36 per dollar, reflecting a muted response to global currency shifts despite being traditionally seen as a safe haven.

Bitcoin saw little movement, dipping 0.1% to $115,038.79, as crypto markets absorbed macroeconomic developments with relative indifference. Gold, often seen as a hedge against both inflation and policy instability, has been climbing in recent days, mirroring broader concerns over the dollar’s direction and Fed credibility.

Dollar Faces Mounting Headwinds from Politics and Policy Expectations

The U.S. dollar’s recent weakness is not merely the result of disappointing data but also reflects growing investor unease over political dynamics surrounding the Federal Reserve and key economic institutions. With markets now pricing in multiple rate cuts and watching for Fed leadership changes, confidence in U.S. monetary independence is showing signs of stress.

As the global economic landscape continues to be shaped by political headlines, trade tensions, and potential geopolitical breakthroughs, currency markets are becoming increasingly reactive to signals of policy reliability and institutional integrity. The trajectory of the dollar will now depend not only on macroeconomic indicators but on how Washington manages its credibility with markets at a critical moment.

Source: Reuters

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Commodity

U.S. Demand Strength Anchors Short-Term Price Recovery

Following five consecutive sessions of decline, global oil benchmarks posted moderate gains on Thursday. Brent crude rose 62 cents to $67.51 per barrel, while West Texas Intermediate climbed 68 cents to $65.03. This rebound was primarily underpinned by data from the U.S. Energy Information Administration showing a sharper-than-expected 3 million-barrel drop in crude inventories, driven by increased exports and higher refinery activity.

Utilization rates on the Gulf Coast and West Coast, two critical refining hubs, reached their highest levels since 2023. This increase suggests a tangible rise in domestic processing demand, particularly for transportation fuels and petrochemical inputs. The inventory drawdown and refinery utilization figures indicate a causally linked increase in consumption, reflecting near-term economic resilience in the United States, the world’s largest oil consumer.

Global Demand Indicators Show Mixed Momentum

JP Morgan analysts reported that global oil demand averaged 104.7 million barrels per day through August 5, marking an annual increase of 300,000 bpd but falling short of their monthly forecast by 90,000 bpd. The lag was attributed to a slower-than-expected start to the month, although forward-looking indicators especially in jet fuel and petrochemical sectors suggest sequential improvement in global consumption.

While this shortfall may appear minor in scale, its correlation with broader global economic signals introduces uncertainty into the demand recovery trajectory. The gap between actual and forecasted demand could reflect underlying weaknesses in sectors sensitive to trade disruptions or delayed recovery in emerging markets.

Macroeconomic Tensions from Tariffs Weigh on Market Sentiment

Despite the encouraging demand data, macroeconomic risks stemming from trade policy continue to act as a ceiling on oil prices. On Wednesday, President Trump imposed an additional 25% tariff on Indian imports in response to India’s ongoing purchases of Russian oil. The tariff, which will take effect 21 days after August 7, adds to investor concerns over an escalating trade and energy confrontation involving key emerging markets.

The impact of these tariffs is both immediate and forward-looking. Financial markets have begun pricing in disruptions to trade flows, particularly involving refined petroleum products and energy-related machinery. The secondary consequences could include reduced fuel demand in India, distortions in global oil routing, and long-term strain on energy diplomacy between Washington and its strategic partners.

Additionally, Trump hinted at extending similar tariffs to China potentially mirroring the 25% levy imposed on India. If enacted, this policy shift could further dampen global economic confidence and curtail energy consumption in Asia’s largest economies.

Geopolitical Dimensions: U.S.-Russia Talks and Sanction Threats

Oil markets are also adjusting to the evolving diplomatic narrative between the U.S. and Russia. A possible meeting between President Trump and President Putin could occur as early as next week. However, U.S. preparations for secondary sanctions remain underway, raising the possibility of broader enforcement measures against countries buying Russian crude.

Russia’s position as the world’s second-largest oil producer magnifies the potential impact of any sanction-related supply curbs. These geopolitical developments introduce a layer of price volatility that is not directly tied to supply-demand fundamentals, but instead hinges on diplomatic resolution or escalation.

Demand Signals Offer Support, But Trade Risks Cloud Outlook

Thursday’s oil price recovery is grounded in solid demand indicators from the U.S., including falling inventories and increased refinery throughput. However, the rally remains constrained by mounting macroeconomic and geopolitical uncertainty.

The correlation between energy prices and trade policy is tightening, with tariffs increasingly shaping expectations around global demand and market access. While near-term fundamentals appear supportive, the broader environment remains fragile, with downside risks stemming from protectionist measures and diplomatic tensions. Traders and analysts must now balance improving consumption trends against the potential drag of policy-induced economic headwinds.

Source: Reuters

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Regional Equities Rise as Wall Street Optimism Spills Over

Asian stock indices advanced strongly following a tech-led rally in U.S. markets. Japan’s Topix index reached an all-time high with a 0.9% increase, mirrored by a similar gain in the Nikkei. Taiwan’s benchmark led regional performance with a 2.3% surge to a one-year peak, while South Korea’s KOSPI added 0.6%. Hong Kong’s Hang Seng rose 0.4%, and mainland Chinese blue chips edged up 0.3%. Australian shares, in contrast, slightly declined after hitting a record high the previous day.

The rise in equities across the region reflects a spillover effect from Wall Street, where the S&P 500 climbed 0.7% and the Nasdaq jumped 1.2% on Wednesday. Futures for both indices remained positive in early Thursday trading, suggesting continued momentum despite lingering risks.

This positive sentiment is causally linked to expectations of monetary policy easing in the U.S., which is in turn supported by soft economic data and political developments shaping the Federal Reserve’s leadership and future stance.

Fed Easing Bets Depress Dollar, Lift Risk Appetite

The U.S. dollar extended losses against major currencies as investors priced in greater chances of a dovish policy pivot by the Federal Reserve. Contributing factors include weaker macroeconomic indicators such as last Friday’s disappointing payrolls report and President Trump’s recent moves to nominate Fed board members with more accommodative views.

These developments have led markets to expect increased flexibility in rate-setting, especially as Trump’s influence over future Fed appointments grows. The dollar index stood at 98.245 after falling 0.6% on Wednesday, while the euro held steady at $1.1657 and sterling hovered at $1.3356.

The dollar's softness has had a correlational effect on asset classes sensitive to U.S. monetary conditions. Gold, for example, rose 0.4% to $3,382 per ounce, reflecting a shift into inflation-hedging assets amid a lower dollar environment.

Oil Prices Steady as Traders Weigh Geopolitics and Supply

Oil markets staged a modest rebound after a sharp drop on Wednesday. Brent crude rose 0.3% to $67.09 a barrel, while WTI gained 0.3% to $64.57. Although prices remain below recent highs, they are stabilizing as investors assess the potential outcome of a meeting between President Trump and Russian President Vladimir Putin regarding the Ukraine conflict.

This diplomatic prospect influences the market’s assessment of future sanctions on Russian energy exports. A resolution could alleviate supply concerns, while failure to reach a deal may reignite fears of tighter global oil supply, particularly if secondary sanctions are imposed on buyers of Russian oil.

Ongoing OPEC+ production increases also weigh on the supply-demand balance, with output expected to rise again in September. These supply-side factors remain intertwined with broader risk sentiment and macroeconomic trends.

Central Banks in Focus as BoE Decision Looms

Sterling maintained its position near a one-week high ahead of the Bank of England’s policy announcement, where a quarter-point cut is widely expected. However, the outcome may be complicated by internal division among Monetary Policy Committee members, with a possible split vote forecast: some may argue for a more aggressive half-point cut, while others could advocate for no change.

The BoE’s decision will be closely watched for indications on how it plans to navigate the dual threats of economic slowdown and lingering inflation. The pound’s stability amid these expectations indicates that markets have largely priced in a dovish tilt but remain alert to signals on longer-term direction.

Market Optimism Tempered by Structural Uncertainty

Asian equity markets are benefiting from the renewed risk appetite driven by hopes of looser U.S. monetary policy, strong corporate earnings, and improving sentiment. However, underlying risks remain. Trade tensions persist, central bank trajectories are uncertain, and valuations particularly in the U.S. are increasingly stretched.

The interplay between political developments, central bank decisions, and macroeconomic data continues to shape asset pricing. While short-term optimism has returned to equity and commodity markets, sustained momentum will depend on whether upcoming data reinforces or undermines expectations of monetary easing and geopolitical de-escalation.

Source: Reuters

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Export Acceleration Signals Strategic Front-Loading Ahead of August 12 Deadline

China’s export sector showed surprising strength in July, posting a 7.2% annual increase, significantly outperforming economists’ forecast of 5.4%. The performance also marked a continued acceleration from June’s revised 5.8% growth. This surge in outbound shipments is widely attributed to manufacturers racing to fulfill orders ahead of an August 12 tariff deadline, after a temporary truce in the ongoing U.S.-China trade standoff.

Import growth also outpaced expectations, rising 4.1% compared to a projected 1% decline, further suggesting a synchronized rush to move goods before trade conditions potentially worsen. The trade surplus, however, narrowed to $98.24 billion from $114.77 billion in June, indicating the intensity of outbound shipping may have been matched by a parallel rise in inbound purchases of production inputs or capital goods.

This pre-deadline rush reflects a tactical response by Chinese exporters seeking to minimize exposure to renewed U.S. tariffs, which could return to triple-digit levels and effectively impose a bilateral embargo if no deal is reached. While the current increase in trade volumes appears impressive, its underlying cause is temporary and reactive rather than reflective of long-term demand growth.

U.S.-China Trade Agreement Prospects Remain Fragile

Although President Trump suggested this week that a trade deal with China was nearing completion, and that a meeting with President Xi Jinping may occur by year-end, the geopolitical backdrop remains volatile. The framework agreements reached in May and June have thus far only moderated non-tariff barriers, such as rare earth and tech-related controls, but failed to produce a binding deal.

The causal relationship between political uncertainty and export behavior is clear: exporters are using the window of opportunity to front-load shipments before any retaliatory measures snap back. As such, July’s export figures, while positive on paper, are influenced by short-term strategic behavior rather than a rebound in global demand or production strength.

If no resolution is reached by the August 12 deadline, the return of punitive tariffs could fracture supply chains, especially for electronics, machinery, and intermediary goods that dominate U.S.-China trade. The possibility of a sharp correction in export volumes in the coming months remains high.

Deflation and Domestic Challenges Weigh on China’s Broader Outlook

Beyond the trade front, Chinese policymakers face mounting concerns over domestic deflation, weak consumer confidence, and a subdued labor market. Advisers are increasingly urging Beijing to pivot its economic strategy toward strengthening household consumption, which has lagged behind industrial recovery during the post-COVID rebound.

Top leadership has also begun regulating price wars among domestic firms, which are contributing to persistent disinflation. However, economists caution that reversing current price trends will be harder than during previous supply-side reforms, due to the scale of the slowdown and its broader impact on employment—a politically sensitive issue for China’s ruling party.

The correlation between weak domestic demand and downward pricing pressure is becoming more entrenched, especially as export-led growth faces sustained headwinds from both the United States and the European Union. The EU has recently criticized China for excessive underpricing of exports, aligning with Washington’s broader narrative on unfair trade practices.

Outlook for Second Half Turns Cautious Despite Strong July Figures

Despite July’s robust trade data, the outlook for the second half of 2025 remains uncertain. Export momentum is expected to slow considerably as Western trade partners tighten enforcement on rerouted Chinese shipments and maintain elevated tariff regimes. Moreover, weakening relations with the European Union could further compress market access.

The narrowing of the trade surplus and the temporary nature of the current export boost reinforce the view that China’s trade performance may have peaked for the year. Without structural improvements to domestic consumption or easing of international tensions, the economy faces mounting challenges that could weigh on both GDP growth and social stability in the coming quarters.

Export Gains Mask Fragile Foundations as China Faces Crucial Trade, Deflation Crossroads

China’s better-than-expected export performance in July reflects a calculated response to looming tariff threats rather than a sign of sustained trade revival. As the clock ticks toward the August 12 deadline, the absence of a durable U.S.-China trade agreement continues to cast a shadow over future growth.

While front-loaded shipments temporarily lifted trade data, they do not address the underlying structural weaknesses, including soft domestic demand and rising deflationary pressures. A durable recovery will depend not on last-minute trade surges, but on long-term reforms aimed at rebalancing the economy, restoring price stability, and stabilizing external relations.

Source: Reuters

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[Quick Facts]

1. Trump: Will impose about 100% tariff on chips, exempt for factories built in the U.S.

2. Sources: Trump plans to meet with Putin and Zelensky as early as next week.

3. Cook: Revisions to nonfarm payroll data may signal a turning point in the U.S. economy.

4. Trump advisors push for a temporary Fed Governor appointment to fill vacancy.

5. Japan's population decline hits record high.

6. U.S. Ambassador says Trump has run out of patience, supports Israel in making tough decisions on Gaza.

[News Details]

Trump: Will impose about 100% tariff on chips, exempt for factories built in the U.S.

"We'll be putting a tariff of approximately 100% on chips and semiconductors," Trump said, hinting at very high tariffs on chips and semiconductors. However, there is good news for companies like Apple: "But if you're building in the United States of America, there's no charge." In other words, there will be a 100% tariff on chips and semiconductors. But for companies building a factory in the U.S., the tariff will be waived. Even if mass production hasn't started yet, companies under construction don't need to pay. Trump also said that as early as next week, a separate tariff may be imposed on all products containing semiconductor chips.

Sources: Trump plans to meet with Putin and Zelensky as early as next week

On August 6th, according to The New York Times, two informed sources revealed that U.S. President Donald Trump told European leaders that he plans to meet face-to-face with Russian President Vladimir Putin as early as next week, followed by a trilateral meeting with Putin and Ukrainian President Volodymyr Zelensky. The sources said Trump disclosed this plan during a phone call with European leaders on the 6th. The talks will be limited to the three leaders of the U.S., Russia, and Ukraine, and will not include any representatives from European countries. So far, neither Russia nor Ukraine has responded to the reports.

Cook: Revisions to nonfarm payroll data may signal a turning point in the U.S. economy

Federal Reserve Governor Lisa Cook described the July jobs report as "concerning" and they are "typical of turning points" in the economy. Cook said during a discussion organized by the Boston Fed on Wednesday that "these revisions are somewhat typical of turning points." Data released last week showed a sharp cooling in the labor market over the past few months. According to a report from the U.S. Bureau of Labor Statistics, nonfarm payrolls increased by 73,000 in July, with the previous two months' data revised downward by nearly 260,000. The unemployment rate rose slightly from 4.1% in June to 4.2%.

Trump advisors push for a temporary Fed Governor appointment to fill vacancy

According to informed sources, advisors to Donald Trump are encouraging him to nominate a temporary Federal Reserve governor to fill an upcoming vacancy on the central bank's board. The sources said nominating a governor to complete the term of the seat that is about to become vacant, the term ends in January 2026, would give Trump more time to interview candidates to succeed Jerome Powell when his term as Fed chair ends next May. Federal Reserve Governor Adriana Kugler announced last week that she plans to step down on August 8th.

Japan's population decline hits record high

According to statistics released by Japan's Ministry of Internal Affairs and Communications on the 6th, as of January 1st, 2025, excluding foreign residents in Japan, the country's population has declined for 16 consecutive years, totaling approximately 121 million. It is a decrease of about 908,000 from the previous year, marking the largest decline since such data began being recorded in 1968. The data shows that between January 1st, 2024, and January 1st, 2025, the number of births in Japan hit a record low while the number of deaths reached a record high. By administrative division, only Tokyo saw a population increase, and that was just by 0.13%. In terms of age groups, those aged 65 and over accounted for 29.58% of the population, while those aged 15 to 64 made up 59.04%, both figures increased compared to the same period last year. Japan's Kyodo News analyzed that the current demographic situation reflects a severe trend of a declining birthrate. It is projected that by 2026, Japan's population may fall below 120 million.

U.S. Ambassador says Trump has run out of patience, supports Israel in making tough decisions on Gaza

As Israel considers whether to take over the Gaza Strip to dismantle Hamas fully, the United States has expressed support for Israel's making difficult decisions. U.S. Ambassador to Israel Mike Huckabee said that President Donald Trump has had enough of the ongoing ceasefire efforts that have yielded no results.

He also predicted that the United States will play a guiding role in post-war arrangements in Gaza and has already taken steps to triple the relief efforts provided by a U.S. and Israel-backed organization that began operations in May. That organization was criticized in a United Nations report for incidents where Palestinians were killed near its facilities, and traditional aid agencies refused to cooperate with it.

Huckabee said the President has been very clear, running out of patience with the legitimacy of Hamas agreements. He has concluded that they are not serious and only want to delay. On July 19th, when Huckabee visited the Palestinian Christian village of Taybeh in the northeastern West Bank near Ramallah and was asked whether this meant Trump supports a takeover of Gaza, Huckabee responded that the president respects Israel's right to take necessary measures to protect itself, retrieve hostages, and bring an end to the situation. He understands that Israel has to make a decision.

[Today's Focus]

UTC+8 15:00 Switzerland July Unemployment Rate

UTC+8 19:00 Bank of England August Interest Rate Decision

UTC+8 21:00 Speech by European Central Bank Governing Council Member Lane

UTC+8 22:00 Speech by Atlanta Fed President Bostic

TBD The United States Begins Implementing "Reciprocal Tariffs"

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U.S. Tariffs Take Global Effect as Economic Strains Emerge from Within

Tariffs Implemented Amid Shifting Economic Landscape

Early Data Suggests Rising Domestic Pressures

Trade Deficit and Manufacturing Goals Contradicted by Outcomes

Policy Execution Muddied by Legal and Administrative Uncertainty

Political Reactions Reflect Diverging Expectations

Uncertainty Overshadows Economic Ambitions

Source: Reuters

Trump’s Broad Tariffs Take Effect Amid Signs of Economic Strain and Mounting Policy Uncertainty

Tariff Implementation Coincides with Emerging Economic Slowdown

Trump Administration Projects Long-Term Gains Despite Short-Term Disruption

Signs of Structural Economic Drag Surface in Trade and Labor Data

Markets Resilient, But Underlying Risk Builds

High-Stakes Gamble With Uncertain Long-Term Payoff

Source: Reuters

Dollar Struggles Amid Fed Uncertainty, Weak Labor Data, and Political Risks

Dollar Continues Slide as Market Anticipates Fed Easing

Political Tensions Erode Confidence in Policy Independence

Euro Finds Support Amid Prospects for Ukraine Peace Talks

Broader Currency and Asset Market Reactions Reflect Risk Reassessment

Dollar Faces Mounting Headwinds from Politics and Policy Expectations

Source: Reuters

Oil Rebounds 1% on Strong U.S. Demand, but Global Trade Risks Limit Gains

U.S. Demand Strength Anchors Short-Term Price Recovery

Global Demand Indicators Show Mixed Momentum

Macroeconomic Tensions from Tariffs Weigh on Market Sentiment

Geopolitical Dimensions: U.S.-Russia Talks and Sanction Threats

Demand Signals Offer Support, But Trade Risks Cloud Outlook

Source: Reuters

Asian Stocks Rally on Fed Rate Cut Hopes While Dollar Softens Amid Political Uncertainty

Regional Equities Rise as Wall Street Optimism Spills Over

Fed Easing Bets Depress Dollar, Lift Risk Appetite

Oil Prices Steady as Traders Weigh Geopolitics and Supply

Central Banks in Focus as BoE Decision Looms

Market Optimism Tempered by Structural Uncertainty

Source: Reuters

China’s July Export Surge Beats Expectations as Firms Race to Preempt Trump Tariff Deadline

Export Acceleration Signals Strategic Front-Loading Ahead of August 12 Deadline

U.S.-China Trade Agreement Prospects Remain Fragile

Deflation and Domestic Challenges Weigh on China’s Broader Outlook

Outlook for Second Half Turns Cautious Despite Strong July Figures

Export Gains Mask Fragile Foundations as China Faces Crucial Trade, Deflation Crossroads

Source: Reuters

Trump Impost 100% Tariff on Chips, Japan's Population Decline Hits Record High

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[News Details]

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