KUALA LUMPUR, March 14 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) ended the week slightly higher, in line with regional indices despite the weaker performance on Wall Street overnight. At 5 pm, the FBM KLCI rose 2.12 points or 0.14 per cent to 1,512.15 from Thursday’s close of 1,510.03. The market bellwether opened 10.08 points lower at 1,499.95, and moved between 1,493.29 and 1,516.25 throughout the day. On the broader market, gainers outpaced losers with 680 to 292, while 437 counters were unchanged, 1,009 untraded, and 13 suspended. Turnover was marginally lower at 3.24 billion units worth RM2.5 billion from 3.25 billion units worth RM2.90 billion on Thursday.
Key Developments:
- Trump’s tariffs take effect: 25% duties on imports from Mexico and Canada, while China faces a 20% tariff increase on top of existing levies.
- China retaliates with 10%-15% tariffs on US goods and export restrictions on 25 US firms.
- Canada and Mexico vow countermeasures, with C$30 billion in immediate retaliatory tariffs from Ottawa.
- Market turmoil ensues, as global stocks slide and investors flee to safe-haven assets.
- US recession fears rise, with businesses warning of supply chain disruptions and higher consumer prices.
North America: Trade Friction with Allies
Canada’s Swift Response
- Prime Minister Justin Trudeau condemned the tariffs, calling them a violation of the US-Mexico-Canada Agreement (USMCA).
- Canada retaliates with 25% tariffs on C$30 billion (US$20.7 billion) in US goods, targeting:
- Beer, wine, and bourbon
- Home appliances
- Florida orange juice
- Ontario Premier Doug Ford warned of possible supply cuts for nickel and electricity exports to the US.
Mexico’s Countermeasures Pending
- Mexican President Claudia Sheinbaum is expected to announce Mexico’s response later today.
China: Tariff Stacking and Tech Battle Intensifies
Beijing Strikes Back
- New Chinese tariffs (10%-15%) will hit US agricultural exports:
- Meats, grains, cotton, fruits, vegetables, and dairy.
- Export and investment restrictions on 25 US firms, including 10 defense contractors supplying arms to Taiwan.
US Tariff Breakdown
- The 20% tariff hike follows a 10% increase in February, imposed due to fentanyl-related disputes.
- Additional 100% duties on Chinese electric vehicles and 50% tariffs on semiconductors remain in place.
- The new 20% tariffs will impact consumer electronics, including:
- Smartphones and laptops
- Video game consoles and smartwatches
- Bluetooth devices
China’s Viewpoint
- The Chinese commerce ministry called the tariffs a violation of WTO rules, warning they "undermine economic cooperation."
- US farmers face the biggest losses, as they already lost US$27 billion in export sales during Trump’s first-term trade war.
Economic Fallout: US Businesses Brace for Impact
Supply Chain Shock
- Tariffs disrupt automotive and machinery production, agricultural exports, and refined energy trade across North America.
- US Chamber of Commerce CEO Candace Laing warns:
- "Tariffs will push the US and Canada toward recession, job losses, and economic disaster."
- Trump’s tariffs will raise consumer costs and disrupt supply chains.
Auto Industry Pleads for Exemptions
- US automakers request tariff exemptions for vehicles meeting USMCA regional content rules to avoid supply chain disruptions.
Financial Markets React
- US stock markets slump, as investors fear inflationary pressure and weaker economic growth.
- The Canadian dollar and Mexican peso tumble against the US dollar.
- Safe-haven assets rally—investors shift to bonds and gold for security.
Trump’s Expanding Trade Agenda
- Steel & Aluminum Tariffs: 25% duties on metal imports return March 12.
- Lumber Investigation: US may increase tariffs on Canadian softwood lumber (currently at 14.5%).
- Digital Tax Retaliation: US reopens probes into countries imposing digital services taxes.
- New Tariff Proposals:
- US$1.5 million fees per Chinese-built ship entering US ports.
- Copper import tariffs under review.
The Big Picture: What’s Next?
With China, Canada, and Mexico all retaliating, global trade tensions are rising.
- Supply chain disruptions loom, threatening higher prices and job losses.
- Recession fears grow, as the US manufacturing sector takes a hit.
- Investors are bracing for further market volatility in the coming weeks.
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