Trump Tariffs Spur Export Boom

FINANCE
Trump Tariffs Spur Export Boom

Chinese exports are on track to hit a record high in 2024 as foreign buyers rush to secure orders ahead of potential tariff hikes under President-elect Donald Trump. Analysts surveyed by Bloomberg forecast export growth of 7% in the fourth quarter, up from the 5% gain in October, bringing total exports to $3.548 trillion—surpassing the 2022 record.

Erica Tay, an economist at Maybank Investment Banking Group, notes that "panic-stockpiling" by global companies could temporarily boost exports. However, concerns over an expanded trade war under Trump’s administration are prompting Beijing to prepare pro-consumption stimulus measures to offset potential economic shocks.

Despite strong export performance, import growth has stagnated, reflecting domestic economic struggles. Economists predict the People’s Bank of China will cut the reserve requirement ratio by 25 basis points this quarter to support lending and maintain liquidity, continuing measures introduced in September.

Trump’s proposed tariffs, potentially as high as 60%, could significantly disrupt trade between the world’s two largest economies. However, experts argue that China is better prepared now than during Trump’s first term, with strategies such as yuan devaluation and increased stimulus expected to mitigate the impact. China’s GDP is projected to grow 4.9% in the fourth quarter, slightly above earlier forecasts.

CLIMATE
COP29 Secures $300B Climate Deal

After two weeks of intense negotiations, COP29 concluded with a contentious agreement requiring wealthy nations to pay $300 billion annually by 2035 to help vulnerable countries address climate change. While developing nations demanded $500 billion, this commitment represents an increase from the current $100 billion and the $250 billion draft proposal that was heavily criticized.

Nearly 200 nations approved the deal early Sunday in Azerbaijan, after days of fraught discussions. At times, talks nearly collapsed, with developing countries threatening to walk out over insufficient funding pledges. Despite falling short of their demands, these nations accepted the agreement to avoid a complete breakdown.

The deal also sets an aspirational target of $1.3 trillion per year, mostly from private sources, to combat rising global temperatures and natural disasters. However, wealthy nations pushed back against expectations for higher government funding, while newly wealthy emitters like China were encouraged, but not required, to contribute.

CRYPTO
SEC Shakeup Marks Crypto’s Rise

The 2024 election marked a turning point for the crypto industry, securing nearly 300 pro-crypto lawmakers in Congress. Crypto-related PACs and contributors raised over $245 million, targeting key races to elect industry-friendly candidates while ousting opponents. Bernie Moreno’s victory in Ohio, unseating Senator Sherrod Brown, exemplified this strategy. Backed by $40 million in crypto donations, Moreno flipped a crucial Senate seat for Republicans.

Coinbase played a central role, contributing over $75 million through its Fairshake super PAC, which supported pro-crypto candidates across both parties. Fairshake’s candidates won nearly every race they funded, cementing the industry's influence. CEO Brian Armstrong celebrated the election, calling it “America’s most pro-crypto Congress ever.”

The election results highlight a shift in regulatory prospects, with SEC Chair Gary Gensler announcing his resignation. Trump’s administration promises to reshape crypto regulation, and discussions of a White House “crypto czar” have begun. The crypto lobby’s success positions the industry to influence U.S. policy like never before.

Word of the day
Scimitar

A scimitar is a short, curved sword that comes from the Middle East. It was commonly used back in the days of horse warfare.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.