2025-04-03 18:20

NEW YORK, April 3 (Reuters) - Goldman Sachs (GS.N) , opens new tab warned sweeping U.S. tariffs will weigh on global growth and prompt the Federal Reserve to cut interest rates more aggressively than previously expected. "We view this as kind of a growth shock... this is going to be a hit to U.S. consumers," Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, told journalists at the bank's New York headquarters on Thursday. Sign up here. As market participants digest the implications of tariffs, Goldman executives said the economic outlook was clouded by U.S. trade policies that would likely trigger retaliation from other nations. While big investors are looking to diversify their global portfolios, they are mostly sticking with U.S. assets for now, said Marc Nachmann, global head of asset and wealth management at Goldman Sachs. "Large allocators are reluctant so far... but they are concerned," he said. GSAM, which manages $2.8 trillion in public assets, is a key part of Goldman's push to broaden earnings beyond its traditional mainstays of investment banking and trading, which accounted for about 65% of revenue in 2024. While equities plunged after the tariff announcements, Treasuries rallied on Thursday as investors sought safe-haven assets, said Lindsay Rosner, head of multi-asset fixed income at GSAM. "Duration has done really well today," she said, referring to bonds that benefit when markets expect interest rate cuts down the line. She warned about the twin risks of rising inflation and lower growth, a dreaded economic scenario that loomed over the U.S. in the 1970s. "The big word of stagflation is real." https://www.reuters.com/markets/us-tariffs-threaten-growth-shock-goldman-sachs-says-2025-04-03/

2025-04-03 18:01

BOGOTA, April 3 (Reuters) - Colombia needs an additional adjustment of some 46 trillion pesos ($11.1 billion) in the 2025 budget to meet the fiscal rule said Astrid Martinez, president of the autonomous committee on fiscal rule (CARF) on Thursday. The new projection is higher than the previous estimate of 40 trillion pesos, as CARF forecasts the country will fall short of the tax collection target set by the government for this year, Martinez said in a presentation at the annual congress of pension funds. Sign up here. Colombia is going through a phase of deterioration on its fiscal accounts, amid lower tax revenues, high public debt and strong limitations to reduce spending. "We believe that collection will be lower than projected, taking into account GDP growth and the elasticity of collection in relation to this growth," explained Martinez. The government announced earlier this year it will cut its 2025 spending budget by 12 trillion pesos to 511 trillion pesos, after Congress rejected a tax reform proposal at the end of 2024. The Ministry of Finance set a fiscal deficit target of 5.1% of GDP, which analysts see as unlikely to be achieved. ($1 = 4,139.75 Colombian pesos) https://www.reuters.com/world/americas/colombia-needs-111-billion-further-adjustment-2025-budget-meet-fiscal-rule-2025-04-03/

2025-04-03 17:08

Canada trade deficit for February was at C$1.52 billion Total exports in February dropped by 5.5% to C$70.11 billion February exports were second highest since May 2022 Imports rose by 0.88% to C$71.63 billion in February OTTAWA, April 3 (Reuters) - Canada unexpectedly swung into a trade deficit in February but both exports and imports stayed at near record levels, data showed on Thursday, as businesses built inventories in the United States to try to limit the impact of tariffs. The country's trade deficit for February was at C$1.52 billion ($1.08 billion), down from a 32-month high surplus of C$3.13 billion in January, Statistics Canada said. Sign up here. Analysts polled by Reuters had forecast a trade surplus of C$3.55 billion in February. Canada's merchandise trade has gained momentum since November as the threat of tariffs from U.S. President Donald Trump became more real. He has imposed tariffs on imports from Canada ranging from steel and aluminum to cars and parts, but on Wednesday did not impose any reciprocal tariffs. Tariff threats have forced businesses, especially in the U.S., to build up inventories to mitigate some of the cost impact. This is reflected in Canada's trade statistics as the country's surplus with the U.S. rose for three consecutive months, reaching a record in January. Its overall surplus also jumped to record levels in January. Total exports in February dropped by 5.5% to C$70.11 billion, Statscan said, adding that despite the drop, February exports were the second highest since May 2022. Exports declined in 10 of the 11 product sections, but did not offset the gains of the previous months. Exports of energy products, with a drop of 6.3%, posted the biggest decline in February, the first decrease since September 2024, as crude oil exports fell on lower prices. Although exports of motor vehicles and parts dropped 8.8% in February, with the exception of the month of January, they remained the highest in a year, the statistics agency said. "The drop in exports gave away all off the gains of January and then some more showing the front-loading effect seen in the previous months was slowing down," Stuart Bergman, chief economist with Export Development Canada. While stockpiling continued in February, the month was marked by volatility in exports and the trend would continue next month, Bergman said, adding the front-loading effect would fade further in April. Imports continued their upward march for a fifth consecutive month and rose by 0.88% to C$71.63 billion, it said. Exports to the U.S. were down 3.6%, but were still almost 80% of Canada's total exports in February. Imports rose 2.5% from the U.S., or 63% of its total imports. The Canadian dollar extended gains and firmed 1.03% to 1.4084 against the U.S. dollar after the trade data, or 71.00 U.S. cents. Currency swap markets see a 73% chance of a pause in interest rate cuts on April 16. ($1 = $1.4124 Canadian dollars) https://www.reuters.com/markets/canada-posts-trade-deficit-february-exports-near-record-level-2025-04-03/

2025-04-03 17:00

Swiss government says U.S. tariff impositions incomprehensible Swiss not planning retaliatory measures for now Switzerland is a major investor in the U.S. Swiss minister says tariffs could crimp investment in U.S. ZURICH, April 3 (Reuters) - Switzerland's government on Thursday described trade tariffs imposed on the country by U.S. President Donald Trump as incomprehensible, and vowed to stay in close communication with the European Union on how they proceed. Swiss President and Finance Minister Karin Keller-Sutter said she regretted that the U.S. was "turning further away from free trade and a rules-based trade order" but said her government was not planning retaliatory measures for now. Sign up here. She and Economy Minister Guy Parmelin vowed to take up their concerns with U.S. officials and both will make their case in person when they visit the United States later this month. Keller-Sutter said she had spoken to EU Commission President Ursula von der Leyen early on Thursday about the tariffs, noting that there was no indication Switzerland could be affected by possible EU countermeasures. "Mrs von der Leyen and I have agreed to remain in close contact and to inform each other about any further steps," she told a press conference, noting she also aimed to participate in a meeting of EU finance ministers next week. Switzerland has abolished industrial tariffs and officials were stunned Trump imposed a 31% tariff on imports from Switzerland compared with 20% from the EU. The U.S. is Switzerland's top export market, and Switzerland is the sixth-biggest foreign investor in the United States. Parmelin said the tariffs could be counterproductive. "Just the other day, I was talking to a CEO of a major company who told me they're in the process of investing over a billion dollars in the United States," he said. "So there's also a risk this will put the brakes on certain investments." Keller Sutter also said Switzerland does not manipulate the Swiss franc to boost exports, as some critics allege. https://www.reuters.com/markets/europe/switzerland-slams-us-tariffs-stays-close-eu-over-next-steps-2025-04-03/

2025-04-03 16:50

Canadian dollar gains 1% against the greenback Touches its strongest since December 6 at 1.4028 Canada avoids fresh tariffs on its goods Canada-US 10-year spread narrows 16.5 basis points TORONTO, April 3 (Reuters) - The Canadian dollar rose to a near four-month high against its U.S. counterpart on Thursday as Canada avoided fresh tariffs on its goods in a widening trade war that has led to investors ditching the American currency. The loonie was trading 1% higher at 1.4090 per U.S. dollar, or 70.97 U.S. cents, after touching its strongest intraday level since December 6 at 1.4028. Sign up here. Wall Street tumbled after U.S. President Donald Trump said he would impose a 10% baseline tariff on all imports to the United States and higher targeted duties on some of the country's biggest trading partners. Goods from Canada and Mexico that comply with the USMCA trade agreement between the three countries will largely remain exempt from tariffs, except for auto exports and steel and aluminum which fall under separate tariff policies. "We saw the initial reaction yesterday after the reciprocal tariff announcement - markets seemed to be celebrating the fact that there weren't any more tariffs on Canada," said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull. "But overnight we've seen a collapse for the broader U.S. dollar." The U.S. dollar (.DXY) , opens new tab posted sharp declines against a basket of major currencies as investors moved to price in four interest rate cuts this year from the Federal Reserve, up from three before the tariff announcement. In contrast, investors have reduced bets on the Bank of Canada continuing its interest rate cutting campaign this month. "I just don't think today is the day to be a hero and try to fade this," Bregar said. "This is a move where people are getting out and could continue maybe for another day or two." Canadian bond yields were mixed across a steeper curve. The 10-year yield was up 1.3 basis points at 2.937%, while the gap between it and the U.S. equivalent narrowed by 16.5 basis points to 110.5 basis points in favor of the U.S. note, the smallest since December 5. https://www.reuters.com/markets/currencies/canadian-dollar-heads-biggest-gain-two-years-after-tariff-reveal-2025-04-03/

2025-04-03 15:30

Poor nations like Lesotho, Madagascar among hardest-hit Trump imposes 31% tariff on top exporter South Africa AGOA trade deal between US and Africa expires in September Stiff tariffs suggest deal won't be renewed, trade group says Kenya sees opportunity in lower tariffs than for Asian rivals JOHANNESBURG/ANTANANARIVO, April 3 (Reuters) - The U.S. government's imposition of steep tariffs on African nations signals the end of the AGOA trade deal, an initiative meant to help African economies develop through preferential access to U.S. markets, trade experts said on Thursday. Several African countries were hit by some of the highest tariffs announced by the White House on Wednesday, including levies of up to 50% on goods from Lesotho, 47% for Madagascar, 40% for Mauritius, 38% for Botswana and 31% for South Africa, the continent's biggest exporter to the U.S. Sign up here. Countries have reacted differently to President Donald Trump's tariffs. South Africa said it urgently wants a new trade deal with the U.S., while Kenya said the 10% tariffs it faces could give it a competitive edge in textiles over worse-hit Asian rivals. Many are already struggling with high poverty levels and debt. Madagascar faces food shortages , opens new tab caused by drought and exacerbated by cyclones. Tiny Lesotho has one of the world's highest HIV/AIDS infection rates. The tariffs also compound the pain from Trump's dismantling of USAID, the government agency that provided much of the continent's aid, and his administration's decision to cut bilateral assistance to South Africa. Analysts were quick to predict that the U.S. move would further bolster China's already dominant role as a trading partner and investor in Africa. "China is likely to play up its commitment to more predictable rules-based economic engagement, which could push countries even closer to its orbit," said David Omojomolo, Africa economist at Capital Economics. AGOA, which grants qualifying African nations duty-free access to the U.S. market, is due to expire in September. And the raft of tariffs suggests a renewal of the trade accord - a cornerstone of U.S. policy towards Africa since the 1990s - is now unlikely. "The reciprocal trade announcement policy will pull the AGOA rug from under our feet," said economist Adrian Saville, a professor at South Africa's Gordon Institute of Business Science. A senior official at Kenya's foreign ministry said he expected tariff exemptions under AGOA to remain valid until September. The Washington-based African Coalition for Trade, however, believed they would not. "This is obviously not a positive sign for the outlook for renewal of AGOA," the organisation said in a memo to members on Thursday. FROM VANILLA TO CAR PARTS The United States is South Africa's second-largest bilateral trading partner after China. "The tariffs affirm the urgency to negotiate a new bilateral and mutually beneficial trade agreement with the U.S.," South Africa's presidency said in a statement. Trade Minister Parks Tau said South Africa should not take a "retaliatory approach" towards Washington but continue to engage while also diversifying its trade partnerships. A new trade deal with Washington looks like a mountain to climb, however, given Trump's recent hostility towards Pretoria. He has repeatedly attacked a land reform policy meant to address the legacies of colonialism and apartheid, characterising it as discrimination against white people. Kenya said that the newly imposed 10% U.S. tariffs would raise costs for Kenyan businesses but noted that major textile-exporting competitors Vietnam, Sri Lanka and Bangladesh were facing steeper levies. "Kenya could position itself as an alternative sourcing hub for U.S. buyers. This presents an opportunity for investment in local textile production," its trade ministry said. In Madagascar, the government said it had contacted the U.S. embassy for clarification regarding the tariffs and to press for their reduction. Madagascar's former ambassador to Washington, Eric Andriamihaja Robson, said the calculations used to determine the tariffs were "flawed and unfair" and called a demand that poor trading partners ramp up their imports from the U.S. unrealistic. "Imports aren't driven by emotional choices but rather a set of parameters," he said in post on LinkedIn that pointed to the example of voltage differences between the two countries as a reason Madagascar did not import U.S.-made appliances. "In the meantime, we will keep growing and exporting our vanilla until the U.S. grows its own." Trump's latest tariffs are in addition to the 25% imposed on all vehicles and car parts imported into the U.S., which will kick in from Thursday. This is a particular threat to South Africa, which exports over $2 billion a year in vehicles and auto parts to the U.S. Other major South African exports to the U.S. include precious stones and metals, iron and steel, machinery and aluminium products and citrus. The Citrus Growers' Association of Southern Africa said it was wrong to suggest that South African growers were competing with their U.S. counterparts, because they met U.S. customer demand when local citrus was out of season. "Every single year, we 'hand over' buyers to our counterpart growers in places like California, Arizona and Texas," it said. "Citrus also plays an important role in the healthy diet of Americans." https://www.reuters.com/world/steep-us-tariffs-africa-signal-end-trade-deal-meant-boost-development-2025-04-03/