This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
An economist may criticize a country’s decision to put tariffs on its largest trading partners, especially when its economy exhibits indications of contraction, the stock market is falling, prices remain persistently high, and consumer sentiment is negative.
That’s because, in Warren Buffett’s words, tariffs are “a tax on goods.” Stated differently, they typically raise the price of imported items. Businesses would either attempt to absorb the cost, resulting in a decline in income or pass it on to customers, which may cause prices to spike upward.
However, according to U.S. President Donald Trump, tariffs on Canada and Mexico will take effect on Tuesday. Additionally, his administration urges partners to impose tariffs on China while maintaining that such levies won’t raise inflation.
Last year, there was much discussion about U.S. exceptionalism in relation to its financial and economic markets. The subject is still present in 2025, given the nation’s recent slowdown in both areas and its sudden departure from partners in the European Union in its foreign policy towards Russia and Ukraine.
What To Note Today
Trump-Zelenskyy Dispute
After a dramatic altercation with U.S. President Donald Trump in the Oval Office, Ukrainian President Volodymyr Zelenskyy left the White House on Friday afternoon without reaching an agreement with the United States. The White House told CNBC that Trump didn’t like Zelenskyy’s tone and body language. However, in answer to a query from a Fox News presenter, Zelenskyy stated that he did not owe Trump an apology. “This type of disagreement is detrimental to both parties,” he stated. Zelenskyy was greeted warmly by British Prime Minister Keir Starmer before a summit with European leaders following his spectacular altercation with Trump and Vice President JD Vance in the United States.
Bessent Calls For Canada To Enact Similar Duties On China
In a Friday interview with Bloomberg, U.S. Treasury Secretary Scott Bessent stated that Mexico offered to equal the tariffs imposed on China by the Trump administration and encouraged Canada to do the same. China’s Commerce Ministry declared Friday that it “firmly opposes” Trump’s action and promised to take retaliatory action if needed. Bessent stated on Sunday that China will “eat any tariffs,” which is one reason why tariffs are unlikely to increase inflation. In a different documentary, Warren Buffett called tariffs “a tax on goods.”
U.S. Inflation As Anticipated
The price index for personal consumption expenditures in the United States increased by 0.3% in January and 2.5% annually. Core PCE, which does not include food and energy, rose 0.3% for the month and 2.6% for the year, 0.3 percentage points less than the annual reading for December. All the numbers were consistent with the Dow Jones consensus estimates and will probably keep the U.S. Federal Reserve on hold for now. Because it gauges consumer behavior, the PCE is the Fed’s preferred inflation indicator.
US Economy Is On Track To Shrink
According to a Friday morning update from the U.S. Federal Bank of Atlanta’s GDPNow tracker of incoming measures, the U.S. gross domestic product is expected to contract by 1.5% from January to March. The decline was caused by sluggish exports and new evidence showing consumers spent less than anticipated during the bad January weather.
February In Red For Us Markets
Even though major U.S. benchmarks increased by over 1% on Friday, they ended February lower than they started. With a loss of about 4%, the Nasdaq Composite was the weakest performer of the month. After a 10-week winning streak, the pan-European Stoxx 600 index outperformed the S&P and increased by more than 3% in February, closing just over the flatline. In the meantime, Germany’s annual inflation rate in February stayed at 2.8%.
U.S. Strategic Cryptocurrency Reserve
Trump declared the establishment of a strategic cryptocurrency reserve for the United States in a Truth Social post on Sunday. It will contain ether and bitcoin in addition to XRP, Solana’s SOL token, Cardano’s ADA, and for the first time, Trump has stated that he supports a cryptocurrency “reserve” instead of a “stockpile.” While the latter would not sell any cryptocurrency now held by the U.S. government, the former anticipates purchasing cryptocurrency in regular installments. After a 10-week winning streak, the pan-European Stoxx 600 index outperformed the S&P and increased by more than 3% in February, closing just over the flatline. In the meantime, Germany’s annual inflation rate in February stayed at 2.8%.
Falling Standards And Impending Tariffs
February saw a decline in all of the main U.S. benchmarks. As we move into March, Trump’s tariffs on Canada, Mexico, and China will go into effect on Tuesday, assuming he keeps his word. The U.S. jobs report for February is out on Friday. Here are some additional things to watch out for this week.
Additional Updates
Xiaomi unveiled its newest flagship smartphone on Sunday at the Mobile World Congress in Barcelona as part of its ongoing drive into higher-end gadgets. Qualcomm’s Snapdragon 8 Elite Mobile Platform, one of the newest CPUs, powers the Xiaomi 15 and Xiaomi 15 Ultra, but the latter has a better camera and display. The Xiaomi 15 Ultra starts at 1,499 euros, whereas the Chinese manufacturer’s most recent phones start at 999 euros ($1,047).
According to the International Data Corporation, Xiaomi’s worldwide smartphone shipments increased 15.4% year over year in 2024, surpassing competitors like Apple and Samsung. The company’s global market share increased from 12.5% in 2023 to 13.6%. With the SU7, Samsung made its foray into the electric car market last year. This week, Xiaomi’s Hong Kong-listed shares reached a record high.
