MONEY MASTER

Key Takeaway:  Despite facing US tariffs as high as  145% , China is on track for a record  US$1.2 trillion (RM5.05 trillion) trade surplus  by aggressively redirecting exports to new markets, sparking global alarm over cheap goods and competitive threats. President  Xi Jinping’s export machine  is proving resilient, defying Washington’s steep tariffs and reshaping global trade flows. With the US market increasingly restricted, Chinese exporters have pivoted quickly, driving record shipments to  India, Africa, Southeast Asia, and even Latin America . Indian imports from China hit an  all-time high in August , while exports to Africa are heading for a yearly record. Shipments to Southeast Asia have also surpassed their pandemic-era peak. The strategy is allowing Beijing to maintain growth even as the US tries to isolate it through trade barriers. The surge has unsettled governments worldwide.  Mexico  is the only country to respond forcef...

  Key Takeaways: Trump told EU officials he is prepared to impose  new tariffs on China and India , but only in coordination with European nations. Measures under discussion also include  sanctions on Russia’s shadow fleet, banks, and oil majors . The proposal comes after Moscow escalated attacks in Ukraine and missed Trump’s deadline for peace talks. Tariffs as Leverage President Donald Trump signaled a willingness to levy sweeping tariffs on China and India to force Russian President Vladimir Putin into negotiations over Ukraine. According to people familiar with the talks, Trump told EU leaders in Washington the US would mirror European tariffs if member states agreed. The approach highlights a challenge: several EU nations, notably Hungary, have previously blocked stricter sanctions on Russia’s energy sector. Any EU measures would require unanimity. Trump has already  doubled tariffs on Indian goods to 50%  in response to New Delhi’s continued purchases of R...

  Key Takeaway: The U.S. Supreme Court will hear a landmark case on whether President Donald Trump overstepped his authority in imposing sweeping global tariffs under emergency powers. The decision, due after oral arguments in November, could have  multi-trillion-dollar implications  for trade, corporate earnings, and global market stability. Case Overview The  Justice Department  appealed an August ruling by the Federal Circuit Court, which found Trump exceeded his authority by invoking the  International Emergency Economic Powers Act (IEEPA)  to impose broad tariffs. The Supreme Court placed the case on a  fast track , with oral arguments scheduled for the first week of November, shortly after the Court’s new term begins. The tariffs remain in effect during the appeal. Legal and Political Stakes IEEPA History:  The 1977 law was originally designed to allow presidents to address national security threats by sanctioning foreign adversaries or...

 Key Takeaway Japan’s economy grew  2.2% annualised in Q2  — more than double the initial estimate — thanks to stronger consumer spending and inventories. But with  Trump’s tariffs and political uncertainty after PM Ishiba’s resignation , investors should watch if this momentum can last into Q3. What Drove the Upgrade GDP:  Revised to  +2.2% annualised  (vs. +1.0% initially). Quarter-on-quarter:  +0.5% (up from +0.3%). Private consumption:  +0.4% (was +0.2%). Boost came from restaurants, game sales, and corporate spending. Capital expenditure:  +0.6% (revised down from +1.3%). External demand:  Added 0.3 ppt, same as earlier estimate. Domestic demand:  Contributed 0.2 ppt (vs. drag of –0.1 ppt previously). The Risks Ahead Tariffs bite:  Analysts warn US tariffs could  hit exports sharply in Q3 , weakening momentum. Consumer strength shaky:  Economists say it’s “difficult to expect” household spending to offset ex...

S&P Global Ratings  has given a vote of confidence to President Donald Trump’s tariff strategy, affirming the  US’s AA+ long-term credit rating  with a stable outlook. The agency said tariff revenues are helping offset the fiscal impact of Trump’s  tax and spending cuts , providing some relief to the nation’s balance sheet. Key Points from S&P Tariff revenues are rising:  US customs duties hit a  record US$28 billion in July , and Treasury Secretary  Scott Bessent  now projects 2025 tariff receipts could exceed  1% of GDP . Fiscal position stable:  While government debt is expected to surpass  100% of GDP  in the next three years, S&P believes the deficit will average  6% of GDP from 2025–2028 , down from 7.5% in 2024. Stable outlook:  S&P does not expect US fiscal health to improve dramatically, but it also doesn’t expect persistent deterioration in the near term. Market Reaction Bond yields:  Th...

Sharp Hike Signals Hardline Stance US President Donald Trump signed an executive order raising tariffs on Canadian goods to  35% from 25% , covering all products outside the US-Mexico-Canada Agreement (USMCA). The escalation underscores a hardline US trade posture heading into the Aug 1 deadline. Transshipment Route Closed Off To prevent tariff evasion, the White House added a  40% levy on transshipped goods , targeting supply chains rerouted via third countries. This move tightens cross-border logistics and increases compliance costs for exporters. Negotiations Hit a Wall Canadian Prime Minister Mark Carney reportedly attempted to initiate talks, but no discussions took place before the announcement. While Carney described previous talks as “constructive,” Trump’s remarks suggest a limited window for compromise, citing Canada’s long-standing tariffs on US agriculture. Geopolitical Overhang Ottawa’s recent steps toward recognising Palestinian statehood added a geopolitical lay...

The global copper market was thrown into turmoil after President Donald Trump imposed  50% tariffs on copper imports , but unexpectedly  exempted refined metals , triggering the sharpest price drop in U.S. copper futures history. What Happened: Comex copper futures plunged 22% , wiping out a record premium over London Metal Exchange (LME) prices. Traders who stockpiled copper in the U.S. ahead of tariffs saw profits evaporate as the exemption derailed expectations. Massive volumes now sit in U.S. warehouses, sparking speculation of  potential re-exports . Market Impact: The move disrupted what some called the biggest copper trade in decades, after traders rushed shipments to U.S. ports earlier this year. Comex prices swung from a  30% premium to a discount  versus LME copper in just a week. LME copper slid 1.2% to  US$9,578.50/tonne , while Comex copper dropped to  US$4.347/pound . Policy Details: The 50% tariff covers  semi-finished products ...

South Korean Finance Minister  Koo Yun-cheol  vowed Tuesday to secure a “mutually beneficial” trade agreement with the United States as the Aug. 1 tariff deadline nears. Koo departs for Washington to meet U.S. Treasury Secretary  Scott Bessent  in a last-minute push to avert punitive tariffs on South Korea’s key industrial exports. The planned talks were postponed last week due to Bessent’s scheduling conflict. “We will make the best effort to derive an agreement based on our national interest, that would allow South Korea and the United States to co-exist,” Koo told reporters before leaving Seoul. Koo will join  Industry Minister Kim Jung-kwan  and  Minister for Trade Yeo Han-koo , who are already in Washington holding discussions with U.S. officials, including Commerce Secretary  Howard Lutnick , as part of an “all-out response.” President  Donald Trump  has threatened to impose steep tariffs unless bilateral deals are finalized before...

  Global Market Snapshot Wall Street Slips on Trade Jitters S&P 500 : 6,259.75 (-0.33%) Dow Jones : 44,371.51 (-0.63%) Nasdaq : 20,585.53 (-0.22%) US futures fell  after Trump threatened  new tariffs  on  EU and Mexico . Markets are pricing in a risk-off sentiment ahead of this week’s  US inflation report  and  Q2 earnings . Meanwhile,  Bitcoin  hit a record high of  $119,487 , up  27% YTD . Malaysia Market Highlights KLCI : 1,536.52 (+0.48%) USD/MYR : 4.2520 (+0.07%) Top Gainer : GAMUDA (+2.62%) Top Loser : IOICORP (-1.28%) Malaysia’s stock market ended  flat for the week , with the  KLCI shedding 0.91%  overall. Despite a mild rebound Friday, foreign investors remain cautious amid: Slower GDP growth outlook RM2.7 billion foreign outflows YTD Tariff concerns hitting AI & export-oriented counters Analysts are now revising down KLCI targets as  AI euphoria fades  and  trade risks escalate . ...

Singapore will roll out a  Business Adaptation Grant  in  October 2025  to help companies adjust to rising tariffs under US President Donald Trump’s trade measures, the  Singapore Economic Resilience Taskforce (SERT)  announced. What’s in the Grant? Cap:  S$100,000 (≈US$78,000) per company Co-funding model:  SMEs likely to receive higher co-funding support than MNCs Duration:  Support available for up to  2 years Who Is Eligible? Exporters or overseas operators  impacted by new tariffs Firms needing reconfiguration support , including logistics or inventory cost adjustments Eligible activities include: Advisory on  free trade agreements ,  legal contracts , and  trade compliance Help with  supply chain restructuring  and  market diversification More details will be announced closer to the October launch. Context and Reactions Minister for Manpower Tan See Leng  emphasized the need to protect  ...

In a dramatic pivot from months of trade diplomacy, U.S. President Donald Trump confirmed Thursday that his administration will  forgo most trade negotiations  and instead  unilaterally impose tariff rates  via letters sent directly to trading partners—starting as early as Friday. From Deals to Directives Rather than pursuing 170+ bespoke trade agreements, Trump now favors a  “simple and efficient” model : tariff letters dispatched to 10 countries at a time, specifying rates ranging from  10% to 50%  on U.S. imports. According to Trump, the shift is pragmatic: “How many deals can you make with over 170 countries? They’re complicated,” he told reporters. This abrupt change comes days before the  July 9 deadline , when the White House’s 90-day tariff pause—originally intended to encourage bilateral talks—expires. Despite initial goals to finalize  90 trade agreements in 90 days , very few deals have materialized. Market Implications: Simplified...

Asian stocks have historically performed well in July, but  this year’s rally may be short-circuited  as  Donald Trump’s tariff deadline looms large . With only  7 days left  before trade deals must be struck—or face new levies—investors are turning cautious. Strong Seasonality, Shaky Sentiment Over the past decade,  July has averaged a 1.36% gain  for the MSCI Asia Pacific Index—second only to November. But 2025 could break that trend as  trade tensions, high US rates, and fading growth  pressure the region. Japan’s Nikkei 225 fell 1% early Wednesday after Trump  reaffirmed plans to hike tariffs  and specifically called out Japan in his criticism.  Investors fear a repeat of April’s selloff , when “Liberation Day” tariff threats sparked a sharp correction across Asian equities. “Investors are holding back on fresh allocations,” said Christian Nolting, CIO at Deutsche Bank Private Bank. “There’s progress in talks, but memories ...

A new market narrative may be taking shape on Wall Street. After months of dominance by tech megacaps, a dramatic  rotation into small caps and lagging sectors  kicked off July with energy. While the  S&P 500  held steady near its record high,  underlying flows told a different story. For investors, the question is clear:  Is this the beginning of a longer-term leadership shift—or just another head fake? From Strength to Shuffle: Tech Loses Grip On Tuesday, traders rotated out of high-flying names and into recent underperformers at the  fastest pace in over two years . The  Russell 2000 index of small caps surged past the Nasdaq 100 , marking the widest performance gap since April. This  momentum reversal —where previous winners were sold and laggards bought—caught many off guard. “If you’re long recent winners and feeling the pain, don’t panic yet,” noted Bespoke Investment Group. “One day doesn’t make a trend—but it could be the start o...

Singapore has downgraded its  2025 GDP growth forecast to just 0% to 2% , warning that  US President Donald Trump's sweeping tariffs  and the intensifying trade war are set to hit global trade and economic momentum hard. 🔻 What’s Behind the Downgrade? The  Ministry of Trade and Industry (MTI)  cited the  US’s 10% baseline tariff  on all imports and  even higher reciprocal tariffs  for some countries. The  US-China trade war  has worsened, with  China now imposing up to 125% tariffs  on US goods. These moves are expected to  weigh heavily on global trade , hurt business confidence, and slow down investment. Economic Impact: Singapore's Q1 GDP grew 3.8% , but this was  down from 5% in Q4 2024 . On a  quarterly basis , the economy  contracted 0.8% , mainly due to declines in  manufacturing and financial services . Monetary Authority of Singapore (MAS)  has also  eased policy  for the s...

In the latest issue of  Tong’s Portfolio , Tong Kooi Ong argues that while  Trump’s tariff strategy may be grounded in economic theory , its  execution risks backfiring on a global scale  — creating not only global trade uncertainty, but potentially triggering  retaliation, supply chain disruptions, and global welfare losses . The Economic Theory Behind Trump's Move: Based on  optimal tariff theory , a country with  market power  can impose tariffs to shift trade terms in its favor, improving national welfare by: Reducing import prices  through global demand suppression Increasing tariff revenue Transferring income  from foreign exporters The key formula: Optimal Tariff Rate = 1 / ε  (ε = foreign export supply elasticity) Lower elasticity = higher potential optimal tariff Trump’s formula for reciprocal tariffs also mirrors this theory: Δt = (X-M) / M , where X = US exports, M = US imports. Why the Execution is Flawed: Trump imposed...