2025-04-04 19:52

China imposes sweeping 34% tariffs on all US imports Blocks US agricultural exports, with soybean trade hardest hit Brazil emerges as clear winner US soybean futures plunge 4% BEIJING/SINGAPORE, April 4 (Reuters) - China's retaliation on Friday against new U.S. tariffs is poised to accelerate Beijing's move towards alternative suppliers for agricultural goods including Brazil, a shift that began during the trade war of U.S. President Donald Trump's first term. Beijing unveiled a slew of countermeasures, including additional duties of 34% on all U.S. goods, which are on top of the 10-15% tariffs placed on roughly $21 billion worth of agricultural trade in early March. Sign up here. "This is going to cost the U.S. a lot of export business," Jack Scoville, vice president of the Chicago-based Price Futures Group, said. "We're pissing off everybody. That's the problem. Where are we going to turn if we've slapped everybody with tariffs?" The most-active soybean contract on the Chicago Board of Trade (CBOT) settled down 34-1/2 cents to $9.77 a bushel, a 3.4% decline from Thursday and its lowest price on a continuous chart for 2025. "It is like shutting down all U.S. agricultural imports. We are not sure if any imports will be viable with 34% duty," said a Singapore-based trader at an international trading company which sells grains and oilseeds to China. A European grains trader said the European Union, which has also vowed to retaliate, was also likely to put tariffs on U.S. soybeans. "It's all about soybeans. A major concern is if there is no agreement before the new crop for U.S. soy," the trader said. "As a big picture conclusion, all this trade war is bearish U.S. ags and bullish other origin ags," the trader said. The March levies have accelerated a pivot away from U.S. soybean imports and shifted demand to Brazil, where a bumper harvest puts it on track to deliver a record-breaking second-quarter import surge for China. "Brazil will be by far the main beneficiary, the biggest supplier that can replace U.S. soybeans to China. But others could benefit too, including Argentina and Paraguay. On wheat, Australia and Argentina should benefit," said Carlos Mera, head of Agricultural Market Research at Rabobank. Sol Arcidiacono, head of Latam grains sales at HedgePoint Global Markets, said local prices for soybeans in South America will strengthen over the full year, despite seasonality and record crops as the trade war escalates. She added that current geopolitics will likely drive farmers to produce more soybeans, mainly in Brazil, where expansion had been slowing lately. On Thursday, a day after Trump's tariffs announcement, Brazil port premiums reached a dollar per bushel over Chicago benchmark prices. Trump unveiled a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries including 34% on China, pushing the global trade war into overdrive. China remains the largest market for U.S. agricultural products, but imports of U.S. farm goods dropped for the second consecutive year, falling to $29.25 billion in 2024 from $42.8 billion in 2022. Also on Friday, China cancelled some documentation needed to import sorghum from C&D (USA) Inc., which is Chinese-owned, citing food safety problems. It also cancelled import documents of poultry meat and bone meal from American Proteins, Mountaire Farms of Delaware and Darling Ingredients. Additionally, it suspended imports of poultry products from Mountaire Farms of Delaware and Coastal Processing. https://www.reuters.com/markets/commodities/china-retaliation-us-farm-goods-hits-soybeans-bolstering-brazil-2025-04-04/

2025-04-04 19:44

LONDON/CHICAGO April 4 (Reuters) - Oil prices plunged nearly 8% on Friday to the lowest level since 2021, while copper, soybeans and other commodities also fell as China retaliated against U.S. President Donald Trump's aggressive tariffs. Safe-haven gold was down for a second day, swept up in a broader market selloff as major equities indexes plunged and recession fears swelled. Sign up here. Beijing put forward a 34% additional levy on all U.S. goods, hitting back after Trump announced a 10% minimum tariff on most U.S. imports, with significantly higher duties for dozens of countries including China. "This is the first very explicit escalation from China, they are not backing down, they are upping the game," said Bjarne Schieldrop, chief commodities analyst at SEB. Schieldrop expected further retaliation from Trump, who said on Friday that China "played it wrong" and vowed not to change his policies. The accelerating tensions further drove fears that the tariffs could lead to a global trade war, weighing on economic growth and curbing demand for key commodities. The levies by the U.S. excluded energy, but the retaliatory move by China encompasses all U.S. goods, as well as export curbs on some rare earths. The U.S. is a major energy exporter and sells oil and LNG to China, according to data from analytics firm Kpler and the U.S. Energy Information Administration. Wall Street benchmarks sold off heavily, with the Dow Jones set to reach a correction while the Nasdaq was on track to enter a bear market. Brent futures dived $4.53, or 6.46%, to $65.63 a barrel by 2:41 p.m. ET (1841 GMT). U.S. West Texas Intermediate crude futures were down $4.93, or 7.36%, to $62.02. The oil benchmarks were set for the lowest close since the middle of the COVID-19 pandemic in April 2021. SOYBEANS, GRAINS Soybean futures on the Chicago Board of Trade fell more than 3% on Friday as China's tariffs on U.S. goods were expected to bring trade in the oilseed between the countries to a halt. China, the largest soybean buyer, was seen accelerating purchases from rival supplier Brazil. CBOT soybeans ended down 3.4% at $9.77 a bushel, the lowest since late December. CBOT wheat fell 1.3% to $5.29 a bushel while corn bucked the broader weakness to close up 0.6% at $4.60-1/4 a bushel as top importer Mexico was excluded from Trump's sweeping tariffs this week. Demand for U.S. agricultural products already came under pressure from a trade war during Trump's first term in 2018. Beijing raised duties last month on $21 billion worth of U.S. products in response to Washington's earlier round of tariffs on Chinese goods. Base metals sold off, with London Metal Exchange three-month copper down 3%, its biggest daily slide since the early days of the pandemic in 2020. Aluminum , already subject to a 25% U.S. import tariff, was down 3% at its lowest since September. Spot gold was down 3% as traders liquidated their bullion positions following wider market selloffs. https://www.reuters.com/markets/commodities/oil-plunges-lowest-since-pandemic-natural-gas-soy-slump-china-retaliates-2025-04-04/

2025-04-04 19:37

April 4 (Reuters) - The Panama Canal has authorized the opening of a bidding process for a new pipeline that will transport liquefied petroleum gas (LPG) across the interoceanic waterway, its authority said on Friday. Since Panama's Supreme Court last year ruled the return of areas near the canal to its administration, the planning of projects to expand its trans-shipment and storage capacity has accelerated. Sign up here. The pipeline is set to allow LPG vessels to discharge at one end of the canal, while other tankers can pick up the cargo at the other end, reducing traffic of vessels through the waterway. Japan's purchases of U.S. LPG will be helped by the project, the canal's head Ricaurte Vasquez said last month. The canal will seek the participation of companies technically and commercially qualified to execute the pipeline's development, and eventually to operate it, it said in a release. "This complementary activity will be incorporated into the sustainable development of the Panama Canal's West Bank route, which includes activities and alternatives to transporting products by sea," it added in the release. Following approval by the board of directors, bids will begin to be received in the coming months, the canal's authority told Reuters. https://www.reuters.com/business/energy/panama-canal-open-bidding-lpg-pipeline-authority-says-2025-04-04/

2025-04-04 18:48

Wall Street 'fear gauge' closes at 5-year high Nasdaq enters bear market as stocks slump over 10% in two days Euro volatility spikes, dollar swings amid tariff news FX and bond market volatility jump US sovereign credit default swaps on the rise NEW YORK, April 4 (Reuters) - Alarm about the fallout from President Donald Trump's sweeping tariffs gripped global financial markets, with Wall Street's fear level at a five-year high while financial executives expressed shock and worry about economic growth. Trillions were wiped off stock market values as investors said they were fearful about the risk of recession ahead. U.S. stock markets slumped more than 10 percent in two days, with the Nasdaq Composite now in a bear market, as China imposed fresh tariffs on all U.S. goods, sparking worries of an extended global trade war. Sign up here. The tariffs prompted "shellshock" among business leaders weighing the potential economic damage, a senior financial executive said. Another executive described a typical industry response to the announcements: "Oh my God, terrible!" Both executives declined to be identified discussing the policies. The Cboe Volatility Index (.VIX) , opens new tab, an options-based gauge of stock investors' anxiety about the market's near-term outlook, jumped 15.29 points to end at 45.31, its highest close since April 2020. "A VIX at 40 is a sign of fear for sure," said Joe Tigay, portfolio manager for Rational Equity Armor Fund. "Usually you see a 40 when there's something more than the usual selloff ... some sort of credit risk, margin risk, something that could cause a contagion that could spill over and across to other asset classes," Tigay said. Investors, who have been battered by a sharp selloff this year - the S&P 500 is down nearly 14% for the year - have been keeping an eye on the volatility gauge as an indicator of market stress. "Tariff uncertainty is likely to rattle markets for the foreseeable future," said Jeff O'Connor, head of market structure at Liquidnet. Friday's 6% S&P 500 drop brought the index close to the 7% circuit breaker threshold that would have triggered a 15-minute trading halt, intended to pause panic selling to avoid a downward stock-market spiral. Trump's team has characterized the market turbulence as an adjustment that would prove beneficial in the long run, with Treasury Secretary Scott Bessent linking the selloff to the emergence of China's DeepSeek artificial intelligence tool earlier this year. The selloff was broad with everything from large-cap to small-cap stocks hemorrhaging. An index of expected stock market correlation closed at a 2-year high on Friday, underlining investors' view that stocks will continue to gyrate in sync. (.COR1M) , opens new tab FEAR IS EVERYWHERE On Friday, the jump in anxiety was broad with no market spared. In currency markets, euro one-month implied volatility shot up to a two-year high of 10.45 as the common currency fell about 1% against the dollar. The greenback, which slumped to a six month low against a basket of currencies on Thursday, has been smacked around by rapidly flowing news on Trump's tariffs and countermeasures from other countries. "FX pricing has swung wildly and the dollar's movement has been the opposite of smooth," said Helen Given, director of trading at Monex USA in Washington. Meanwhile, U.S. Treasury yields fell, with the yield on the benchmark U.S. 10-year Treasury note falling to a six-month low of 3.86%, slipping below the widely watched 4% mark. Safe-haven buying of Treasuries has sent yields, which move inversely to prices, down sharply in recent weeks, driven by concerns about recession and shifting expectations about potential Federal Reserve policy. Trump's new tariffs are "larger than expected" and the economic fallout, including higher inflation and slower growth likely will be as well, Federal Reserve Chair Jerome Powell said on Friday. Trump on Friday called on Powell to cut interest rates, saying it was the "perfect time" to do so. Investors do not expect volatility to subside quickly. "Until there's actually a change in the policy or evidence of real negotiations going on, the market's going to be under pressure," said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research in New York. U.S. high yield corporate bond spreads, an important indicator of financial conditions, surged to 401 basis points as of late on Thursday, their highest since November 2023, as global markets swooned. The short-term cost of insuring exposure to U.S. government debt has climbed, with spreads on U.S. six-month credit default swaps (CDS) - market-based gauges of the risk of a default - widening to 47.48 basis points as of Thursday, the highest since mid-November 2023, according to LSEG data. Other indicators of market stress reflect the nervousness that high volatility brings, but no signs yet of full-on panic. U.S. two-year swap spreads - the difference between two-year swap rates and the two-year Treasury yield - were set for their biggest one-day contraction on Friday since the March 2023 regional banking crisis. Still, equities remained at the center of the market turmoil. Global hedge funds and levered exchange-traded funds (ETFs) dumped more than $40 billion of stocks at a breakneck pace, growing increasingly bearish, according to bank notes to clients on Friday. JP Morgan said in a note that volatility targeting portfolios had between $25 billion and $30 billion in equities to sell in the coming days, as they unwind positions to reduce risk. Meanwhile, retail investors, following a "buy the dip" strategy, bought $4.7 billion in stocks on Thursday, the highest level over the past decade, JP Morgan said in a note. "Given the 'elephant in the room' of tariffs which haven't led to any negotiation thus far, it's nearly impossible to call a bottom without evidence of proof," Mark Newton, head of technical strategy at Fundstrat Global Advisors, said in an note. https://www.reuters.com/markets/wall-street-fear-gauge-jumps-8-month-high-stocks-sell-off-2025-04-04/

2025-04-04 18:15

Latin America mostly spared from Trump's tariffs, boosting investor interest Brazil and Mexico see stock and currency gains amid trade shifts Emerging markets outperform due to improving fundamentals and attractive valuations NEW YORK, April 4 (Reuters) - Latin American stocks and bonds could be unlikely winners as the Trump administration's trade war so far mostly spared the region, while it triggered a market rout on Wall Street that has sent investors on a hunt for non-U.S. assets. The Nasdaq stock index (.IXIC) , opens new tab opened Friday more than 20% below its December record high and Wall Street's "fear gauge" hit an eight-month high. The dollar (.DXY) , opens new tab touched a six-month low this week. Sign up here. Meanwhile, the outperformance of some corners of emerging-market equities and currencies, and the resilience of bonds, have not gone unnoticed. Latin America was mostly spared the imposition of additional tariffs in U.S. president Donald Trump's announcement this week that upended decades of trade policy, partly because most of the region has a trade deficit with the world's largest economy. Despite a massive Friday selloff, the MSCI Latam stocks gauge (.MILA00000PUS) , opens new tab is beating the S&P 500 (.SPX) , opens new tab by more than 20 percentage points so far in 2025. The recent returns and a rethinking of global trade could bring new types of investors to Latin American assets, according to Kathryn Exum, co-head of sovereign research at Gramercy. "Stepping back, we're obviously in a new paradigm for trade and a reorganization of global trade. Assuming that you end up with more regionalized blocks of trade, Latin America would be a winner in that regard," she said. "Perhaps it starts to increase flows," she added. "Whether it's FDI (foreign direct investment) flows or portfolio flows will depend on the country at hand, and whether we're talking about short-term or over the medium term." Evidence of a shift may be found in Brazil and Mexico, the region's largest economies by far. Stock markets in both countries have risen this year, and their currencies are up against the dollar. Economists said Brazil is better placed than most countries to deal with tariffs, while Mexico's preferred treatment from a U.S. trade standpoint is expected to continue. A shift toward Latam follows months of volatility on Wall Street as the prevailing market view of U.S. assets as the only destination was under review, and investors realigned growth expectations in the U.S. and globally. "Emerging Market assets in general are outperforming during this period of volatility, and we attribute this to a mixture of improving fundamentals, favorable technical factors, and attractive relative valuations," said Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS. "There's also a growing sentiment among investors questioning U.S. exceptionalism, which is likely to drive diversification flows towards EM assets." Yet Friday’s market selloff, triggered by counter tariffs from China, is a reminder that no one would be spared if the global economy goes into recession. The size of the Latin American stock market is a limitation, as the top 10 companies in the regional MSCI index combine for a market capitalization of near $230 billion, while the market cap of Apple (AAPL.O) , opens new tab alone sits near $3 trillion. In addition, Latin America's idiosyncrasies could also prove a barrier to more investment, said Samy Muaddi, head of EM fixed income at T. Rowe Price. "While Latin America was less directly impacted (by U.S. tariffs), any country running twin deficits in a period of tightening financial conditions could suffer from collateral damage." https://www.reuters.com/markets/latam-assets-may-receive-trade-war-boost-investors-say-2025-04-04/

2025-04-04 18:08

April 4 (Reuters) - Federal Reserve Governor Christopher Waller said on Friday that stablecoins are a good thing for the U.S. payments system, but he doubts the financial system can support a large number of these assets. "I'll say I'm a personal, big advocate of stablecoins," Waller said at a New York Fed event. "I have been saying this for over three-plus years now, about how this could bring competition, efficiency and speed into the payments system." Sign up here. "Do I think there's going to be 100 stablecoins circulating after legislation happens? I don't think so," he added. Waller is leading the work on payments system issues for the U.S. central bank, a job he acknowledges would have at one point been grim but is now "fascinating" given the level of innovation happening in the sector. He noted "if you had told the (Fed) governor 25 years ago they had to oversee the payments committee, they'd put a gun in their mouth." Waller again noted that he sees no need for the Fed to adopt its own fully digital dollar and said that it's best when the private sector leads payments system innovation. "I prefer to let the private sector solve these problems," Waller said. "It's not my job as an unelected bureaucrat to tell everybody how they should do things," he said, adding that the Fed's role is to "convene the industry together to think about what the problems are" and how they can be solved. Waller also reiterated that the challenge of speeding up the payments system is that everyone wants to get paid quickly but not everyone wants to send the cash as quickly. https://www.reuters.com/technology/feds-waller-stablecoins-bring-benefits-payment-system-2025-04-04/