Vietnam Boosts U.S. Ties with $2 Billion Farm Produce MoUs Amid Tariff Pressure

Economic

China–U.S. Trade War

Summary:

ietnamese firms will sign MoUs to buy $2 billion of American farm produce, signaling a strategic effort to mitigate trade tensions with the U.S. The move is part of broader negotiations to avert looming reciprocal tariffs that could harm Vietnam’s export-dependent economy...

Strengthening Trade Ties in the Shadow of Tariffs

Vietnam’s commitment to sign memorandums of understanding (MoUs) to purchase $2 billion worth of U.S. agricultural products reflects a calculated diplomatic and economic maneuver to ease escalating trade tensions. With the Trump administration imposing a 46% tariff — albeit temporarily paused — Vietnam is under pressure to rebalance trade in favor of the United States to avoid economic disruption. These MoUs represent a goodwill gesture aimed at securing a more favorable trade agreement and preventing the reinstatement of punitive measures.

Leading this diplomatic outreach is Agriculture Minister Do Duc Duy, accompanied by 50 Vietnamese companies on an official visit to the U.S. A significant portion of the new MoUs involves five deals with Iowa-based producers, accounting for $800 million over three years. These agreements focus on key American exports such as corn, wheat, dried distillers grains (DDGs), and soybean meal — products central to Vietnam’s feed and food production industries.

Addressing Bilateral Trade Imbalances

The U.S.-Vietnam trade relationship has been increasingly scrutinized, with a $123 billion trade deficit recorded by the United States last year. Although Vietnam purchased $3.4 billion in U.S. agricultural goods in 2024, it exported nearly four times that amount — $13.68 billion — in the same category. By proactively increasing its American imports, Vietnam aims to demonstrate a cooperative stance and reduce the risk of retaliatory tariffs that could disrupt a vital export flow to its largest market.

This agricultural initiative is not isolated. Vietnam has also pledged to increase purchases of high-value American goods, including Boeing aircraft and liquefied natural gas, showing a diversified approach to appease Washington. Furthermore, Hanoi has promised tougher enforcement on digital piracy and counterfeit goods, areas that have drawn strong criticism from the U.S. Trade Representative.

Implications for Vietnam’s Economic Model

Vietnam’s economy is heavily reliant on exports, particularly to the U.S., which serves as a major market for its electronics, apparel, and agricultural products. A potential reimposition of high U.S. tariffs would threaten this model, disrupting manufacturing output and foreign investment flows. Therefore, securing a trade agreement and demonstrating compliance with U.S. expectations is not just a diplomatic priority but an economic necessity.

By increasing agricultural imports, Vietnam is also diversifying its food supply chain at a time of global commodity volatility. Importing feedstock such as soybean meal and DDGs supports domestic livestock and aquaculture sectors, which are key to Vietnam’s rural employment and food security strategies.

Outlook and Strategic Calculations

While the MoUs themselves are non-binding, they signal a strong political commitment and are likely to serve as bargaining chips in ongoing trade talks. The timeline is critical: the tariff pause expires in July. Thus, these agreements could shape the outcome of negotiations over the next month. If Vietnam successfully leverages these deals and demonstrates concrete trade adjustments, it may avoid the full brunt of U.S. tariff enforcement.

In summary, Vietnam’s $2 billion MoU package is a multi-faceted strategy — part economic necessity, part diplomatic outreach — aimed at preserving its export-driven growth while navigating an increasingly protectionist global landscape.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Olivia Brooks

China–U.S. Trade War

Political

Economic

Trade negotiations between the United States and India are making progress and a deal could be finalised soon, U.S. Commerce Secretary Howard Lutnick said on Monday, as both sides push to conclude talks ahead of a July deadline.

"You should expect a deal between United States and India (in the ) not-too-distant future because I think we have found a place that really works for both countries," Lutnick said at the annual summit of the US-India Strategic Partnership Forum in Washington.

Lutnick later posted a short video of his remarks on social media platform X, saying "We have a great relationship between the countries. I'm optimistic for a trade deal soon that will benefit both nations."

Reuters reported earlier that the Trump administration had asked trade partners to submit their best offers by Wednesday, as officials work towards finalising several deals ahead of a self-imposed July 9 deadline.

India's trade ministry declined to comment on the timeline.

However, Rajesh Agrawal, India's chief negotiator for talks with the U.S., said last week that trade talks between the two countries were progressing well, and that a "good outcome" was expected soon.

A U.S. trade delegation is scheduled to visit New Delhi on June 5-6 for further discussions.

An Indian team had visited Washington in April, and Trade Minister Piyush Goyal also visited last month to push trade talks.

Lutnick said Washington was seeking lower tariffs particularly on agricultural products, greater market access for U.S. firms, and increased purchases of defence equipment, with an aim of reducing its trade deficit with India.

In return, it was prepared to expand access for Indian exports.

"India is a very protectionist country," he said, noting tariffs of up to 100% on some products. "We would like our businesses to have reasonable market access."

He said strong ties between President Donald Trump and Prime Minister Narendra Modi were helping ease negotiations.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Political

Peace Talks Yield Minimal Progress, Underscored by Harsh Russian Demands

In Istanbul, Russia presented a series of punitive conditions to Ukraine during their second direct negotiation since 2022. These included the recognition of Crimea and four additional regions as Russian territory, forced neutrality barring NATO membership, limitations on Ukrainian military size, and language and political reforms that Kyiv views as unacceptable. The brief one-hour meeting concluded with minimal concessions—limited to prisoner exchanges and the return of fallen soldiers—failing to produce a ceasefire or roadmap toward a meaningful peace.

Ukraine’s response was measured but firm. Defence Minister Rustem Umerov stated Kyiv would examine the Russian memorandum but emphasized that any substantive progress would require a direct meeting between Presidents Zelenskiy and Putin. President Zelenskiy further condemned Russia’s demands as ultimatums and reaffirmed Ukraine’s refusal to submit to forced territorial concessions.

Geopolitical Stakes Heighten Amid U.S. and Turkish Mediation Efforts

While Turkish President Erdogan called the session a “great meeting” and expressed hope for a trilateral summit involving Trump, Putin, and Zelenskiy, the political optics starkly contrasted the lack of progress. U.S. President Trump has issued warnings that U.S. mediation may be withdrawn if neither side shows commitment to compromise. Meanwhile, the EU and Washington continue to pressure Moscow for an unconditional ceasefire, which Russia rejects, stating it seeks a “long-term settlement” rather than a temporary pause.

Amid stalled diplomacy, the conflict escalated on the battlefield. Ukraine launched an unprecedented drone assault—Operation "Spider's Web"—on Russia’s nuclear-capable bombers stationed in remote airbases in Siberia and the Arctic. The attack involved 117 drones and targeted critical elements of Russia’s strategic nuclear triad. Satellite images suggest significant damage, though Russia downplayed the outcome.

Western analysts called the operation one of Ukraine’s most daring, demonstrating Kyiv’s ability to strike deep into Russian territory and challenge Moscow’s nuclear posturing. Importantly, Western governments including the U.S. and UK confirmed they were not pre-informed of the attack, reflecting Ukraine’s increasing operational independence in its wartime tactics.

Zelenskiy framed the strike as a morale boost and reaffirmation of Ukraine’s resolve: “We do not want to fight, but we will not accept ultimatums,” he stated, signaling a clear stance against compromise under duress.

Outlook: Diplomatic Deadlock, Military Determination

The Istanbul meeting underscores the gulf between the two sides’ visions for peace. Russia’s maximalist demands and insistence on territorial annexation leave little room for negotiation, while Ukraine, backed by Western allies, refuses to legitimize what it sees as illegal occupation. The drone strikes demonstrate Kyiv’s intent to keep pressure on Russia not only at the front lines but across its strategic infrastructure.

As tensions persist, the prospect of meaningful peace appears distant. With neither side yielding and geopolitical risks mounting—including potential escalation involving nuclear assets—international actors may face increased pressure to mediate a new framework or prepare for a protracted conflict with deeper consequences.

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Commodity

Short-Term Profitability Returns Despite Structural Pressures

Oil refiners around the world are experiencing a temporary reprieve from recent profit slumps. Global composite refining margins climbed to $8.37 per barrel in May, their highest in over a year, reflecting a short-term supply-demand mismatch. While still far below the extraordinary margins seen in mid-2022, the recent uplift is significant given the sector’s earlier projections of a weak 2025. The uptick has been primarily driven by shrinking global refinery capacity — a consequence of permanent closures in the U.S. and Europe — alongside unplanned outages and rising summer fuel demand.

The paradox lies in the fact that refining margins have risen even as crude prices hit a four-year low in May due to faster-than-expected easing of OPEC+ output cuts. This decoupling underscores that refined product tightness is not simply a function of upstream supply but also downstream capacity constraints and logistics bottlenecks.

Supply Constraints and Inventories Drive Up Margins

A major contributor to this margin rebound has been the tightening of fuel inventories. According to JPMorgan, OECD-region fuel stocks dropped by 50 million barrels from January through May, signaling a substantial drawdown that aligns with peak summer transport and cooling fuel demand in the Northern Hemisphere. In parallel, refinery output disruptions due to plant shutdowns — such as those in Spain, Nigeria, and Mexico — further constricted the fuel supply chain.

Specifically, global diesel and gasoline supplies are both projected to contract in 2025, while demand for these key fuels either rises slightly or declines more slowly, creating a squeeze that lifts prices. Analysts from FGE and Rystad agree that this tighter balance is providing near-term relief for refiners, especially in Europe and North America, where many have long struggled with high operating costs and declining utilization rates.

Plant Closures Shift Market Dynamics

The impact of permanent closures is being felt more acutely now, especially with Europe’s Petroineos, Shell, and BP facilities winding down operations. In the U.S., LyondellBasell and other major players are also reducing refining capacity. These structural changes have slowed global net refinery capacity growth below product demand growth for the first time in years. Combined with outages like the Iberian Peninsula’s 1.5 million bpd loss in April, this has made existing operational refineries significantly more profitable in the short term.

Even newer projects like Nigeria’s Dangote and Mexico’s Olmeca refineries have suffered unexpected disruptions, limiting the expected cushion in global supply expansion.

Caution Ahead: Trade Tensions and Overproduction Loom

Despite the current momentum, industry analysts warn that these margins may not be sustainable. The International Energy Agency (IEA) forecasts that global oil demand growth will slow to 650,000 bpd for the remainder of 2025, down from near 1 million bpd in Q1. A resurgence of trade conflicts and tariff-related disruptions — such as those between the U.S. and China — could further erode consumer and industrial fuel consumption.

Moreover, the profitability of refining is likely to draw idle capacity back online, increasing output just as demand softens. This supply response could flatten or reverse current margin gains. Wood Mackenzie and veteran traders alike suggest refiners should lock in profits now through hedging, as the outlook beyond summer appears less favorable.

Refiners globally are benefitting from a narrow window of profitability due to tight fuel markets and strong seasonal demand. However, this rebound is unlikely to alter the longer-term trajectory of the refining industry, which still faces headwinds from electrification, evolving fuel standards, and geopolitical uncertainty. Strategic hedging, operational efficiency, and selective investment in newer, flexible capacity will be essential for refiners seeking to extend gains and remain competitive beyond 2025.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Glendon

Forex

Economic

OECD Trims Global Outlook As Trump Trade War Hits U.S. Growth_1

Global economic growth is slowing more than expected only a few months ago as the fallout from the Trump administration's trade war takes a bigger toll on the U.S. economy, the OECD said on Tuesday, revising down its outlook.

The global economy is on course to slow from 3.3% last year to 2.9% in 2025 and 2026, the Organisation for Economic Cooperation and Development said, trimming its estimates from March for growth of 3.1% this year and 3.0% next year.

But the growth outlook would likely be even weaker if protectionism increases, further fuelling inflation, disrupting supply chains and rattling financial markets, the Paris-based organisation said in its latest Economic Outlook.

U.S. President Donald Trump's tariff announcements since he took office in January have already roiled financial markets and fuelled global economic uncertainty, forcing him to walk back some of his initial stances.

Last month, the U.S. and China agreed to a temporary truce to scale back tariffs, while Trump also postponed 50% duties on the European Union until July 9.

The OECD forecast the U.S. economy would grow only 1.6% this year and 1.5% next year, assuming for the purpose of making calculations that tariffs in place mid-May would remain so through the rest of 2025 and 2026.

For 2025, the new forecast marked a sizeable cut as the organisation had previously expected the world's biggest economy would grow 2.2% this year and 1.6% next year.

While new tariffs may create incentives to manufacture in the United States, higher import prices would squeeze consumers' purchasing power and economic policy uncertainty would hold back corporate investment, the OECD warned.

Meanwhile, the higher tariff receipts would only partly offset revenues lost due to the extension of the 2017 Tax Cuts and Jobs Act, new tax cuts and weaker economic growth, it added.

Trump's sweeping tax cut and spending bill was expected to push the U.S. budget deficit to 8% of economic output by 2026, among the biggest fiscal shortfalls for a developed economy not at war.

As tariffs fuel inflation pressures, the Federal Reserve was seen keeping rates on hold through this year and then cutting the fed funds rate to 3.25-3.5% by the end of 2026.

In China, the fallout from the U.S. tariff hikes would be partly offset by government subsidies for a trade-in programme on consumer goods like mobile phones and appliances and increased welfare transfers, the OECD said.

It estimated the world's second-biggest economy, which is not an OECD member, would grow 4.7% this year and 4.3% in 2026, little changed from previous forecasts for 4.8% in 2025 and 4.4% in 2026.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Stocks

Largest Fund Exodus Since 2007 Reflects Cautious Sentiment Post-Rally

Japanese equity markets experienced a significant capital pullback in the week to May 28, 2025, with equity funds recording $7.49 billion in net outflows — the most substantial weekly loss since July 2007, according to LSEG Lipper. The data highlight investor hesitation following strong equity performance in April and early May, spurred initially by easing tensions between the U.S. and China. However, concerns about Japan’s medium-term earnings outlook, alongside broader macroeconomic rebalancing strategies, have since triggered widespread selling.

Analysts attribute this exodus largely to domestic investors locking in gains after April’s buying opportunity. Life insurers and pension funds also engaged in rebalancing, shifting from equities to bonds to maintain portfolio ratios as stock prices climbed.

Yen Strength and Profit Uncertainty Add to Headwinds

The yen’s continued appreciation — up 10% year-to-date against the U.S. dollar — has become a key concern for export-heavy Japanese firms. A stronger yen diminishes overseas earnings when repatriated, reducing profit margins for large manufacturers and tech exporters. Reflecting this pressure, analysts have revised forward 12-month earnings expectations for Japanese corporations downward by 1.8% over the past month.

This currency-driven pressure adds to the uncertainty about the short-term potential for earnings growth, even as corporate governance reforms continue. According to Herald van der Linde of HSBC, while structural reforms — such as efforts to improve return on equity and enhance shareholder value — are progressing, they remain too incremental to spark near-term performance rebounds. Japan’s ROE still trails its global peers, deterring some international capital.

Domestic vs. Foreign Investor Behavior: A Divergence Emerges

Notably, the outflows were almost entirely driven by domestic investors, who withdrew $7.55 billion from local funds. In contrast, foreign investors showed tentative optimism, contributing a modest net inflow of $59 million. This disparity underscores the more cautious stance of Japanese institutions and retail participants, in contrast with selective foreign fund managers possibly seeking longer-term value opportunities.

Among the hardest hit were some of Japan’s most actively traded ETFs: the Daiwa iFreeETF TOPIX lost $2 billion, the Nikko Listed Index Fund TOPIX shed $1.92 billion, and the Nomura NF TOPIX ETF saw $1.61 billion in redemptions. These instruments, closely tied to Japan’s broad market index, were primary targets for liquidation amid waning near-term enthusiasm.

Fundamentals vs. Flows

Despite the heavy fund outflows, the underlying fundamentals of Japan’s equity market are not deteriorating sharply. Instead, the pullback reflects tactical repositioning in response to stretched valuations, currency pressures, and modest earnings downgrades. If the yen continues to strengthen and global trade uncertainty persists, we may see further corrections in Japanese equities. However, a stabilization in FX markets or stronger Q2 earnings surprises could quickly reverse sentiment.

In the medium term, Japan’s push for corporate transparency, capital efficiency, and improved dividend policies remains a long-term tailwind. The challenge lies in translating structural reforms into tangible profit growth, which will be key to regaining both domestic and international investor confidence.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Commodity

Steel Sector Soars on Protectionist Push

Markets reacted swiftly and decisively on Monday after President Donald Trump announced a sharp hike in tariffs on steel imports, doubling the levy from 25% to 50%. The move immediately sparked a bullish rally in domestic steel producers, with Cleveland-Cliffs (CLF) soaring over 23%, Steel Dynamics rising more than 13%, and Nucor climbing 12%. The VanEck Steel ETF (SLX), which tracks the broader industry, gained more than 3%, signaling broad-based optimism within the sector.

Speaking at a rally in Pennsylvania, Trump justified the measure as a means to "further secure the steel industry in the United States." He framed the move as a continuation of his industrial strategy focused on reshoring manufacturing and strengthening U.S. supply chains. The timing aligns with a politically motivated effort to energize industrial states ahead of the election season, tapping into economic nationalism and employment preservation in legacy industries.

In a bid to soften the blow or offer reassurance, Trump also touted a “blockbuster agreement” involving U.S. Steel and Japan’s Nippon Steel. He described it not as a merger but as a “partnership,” claiming it would lead to the creation of 70,000 new jobs and keep U.S. Steel under American control without layoffs. However, details of this deal remain vague and face scrutiny from regulators and trading partners alike.

Trade Fallout and Global Repercussions

The European Union wasted no time in criticizing the decision, calling it a unilateral action that jeopardizes ongoing negotiations. EU officials said they were prepared to respond with countermeasures, potentially reigniting a tit-for-tat tariff war similar to the escalation seen during Trump’s first term. This highlights the broader geopolitical risk: while tariffs may bolster domestic producers temporarily, they also risk disrupting supply chains, raising costs for downstream industries, and straining diplomatic ties.

From a market perspective, steel equities are responding positively due to the expectation of reduced foreign competition and stronger domestic pricing power. However, these gains may be tempered in the medium term if retaliatory tariffs hurt U.S. exports or if input costs for manufacturers and builders rise. Investors are also watching closely for any macroeconomic fallout tied to global trade realignments, which could weigh on broader industrial demand.

Trump’s doubling of steel tariffs has provided an immediate jolt of confidence to U.S. steelmakers, as reflected in double-digit stock gains. Yet the underlying strategy may also sow deeper tensions with major trade partners and raise inflationary pressures in industries reliant on steel inputs. The market’s initial enthusiasm may give way to volatility as the global response unfolds and as investors reassess the broader economic implications of this aggressive protectionist turn.