Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
China is considering a major move to allow refinancing of up to $5.4 trillion in mortgages, aiming to lower borrowing costs for millions of families and stimulate consumption. The plan would permit homeowners to renegotiate mortgage terms with their current lenders before January or switch lenders for the first time since the global financial crisis.
Key Takeaways:
Refinancing Initiative to Support Economic Growth: The proposed refinancing plan aims to lower mortgage costs, which could ease financial burdens for homeowners and boost consumption. This measure comes amid mounting pressure on Chinese authorities to counter a housing-led economic slowdown, following a series of disappointing earnings from consumer companies and reduced growth forecasts from major financial institutions like UBS Group AG.
Impact on Chinese Banks: Lower mortgage rates could significantly affect the profitability of Chinese banks, particularly state-run institutions. The sector is already grappling with record-low net interest margins, which fell to 1.54% as of end-June, well below the 1.8% level needed for reasonable profitability. Despite these concerns, the move could provide immediate relief to existing homeowners who have not benefited from recent rate cuts that mainly targeted new homebuyers.
Wider Economic Implications: The new refinancing plan is part of China's broader efforts to revive its property market, which has been in crisis for four years, impacting jobs, consumption, and household wealth. While retail sales showed some improvement in July, overall consumption remains subdued, well below pre-pandemic levels. Analysts, including those at UBS, warn that the property market's weakness may have a more substantial negative effect on the overall economy than previously expected.
If implemented, this refinancing plan could offer a faster path to reducing mortgage burdens, potentially providing a much-needed boost to household spending and economic growth, albeit at the cost of further pressure on China's already struggling banking sector.
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