Tradewar

U.S. President Donald Trump has canceled his planned August trade trip to New Delhi, which was scheduled for August 25–29, ending talks before they even began – and just one day after his summit with Russian President Vladimir Putin.

Tariffs Push Negotiations Into Deadlock
Trump’s decision immediately froze all progress on a long-discussed trade agreement. Indian exporters lost their last hope of avoiding steep new tariffs. Beginning August 27, increased U.S. duties — reaching as high as 50% on some goods — will take effect, representing one of the harshest trade sanctions imposed on any U.S. partner.
At the center of the dispute is India’s continued import of Russian oil, which Washington has demanded to stop. Earlier this month, Trump slapped an additional 25% tariff on Indian imports. After five failed rounds of talks — bogged down by disputes over opening India’s agricultural and dairy sectors as well as oil deals with Moscow — Washington lost patience.

New Delhi Pushes Back, Points to Double Standards
India’s Ministry of External Affairs condemned the move as unfair, arguing the country is being singled out while the West — including the U.S. and EU — continues trading with Russia. Despite this, Trump pressed forward, leaving Indian exporters bracing for financial pain and long-term uncertainty.
Once seen as one of the strongest partnerships of the past two decades, U.S.–India relations are now sliding into their deepest crisis in years. Meanwhile, Prime Minister Narendra Modi is doubling down on domestic self-reliance.

Modi’s Answer: Self-Reliance
In his Independence Day address, Modi emphasized that India would reduce its dependence on foreign imports. He announced that “Made in India” semiconductor chips will be available by year-end and pledged a sweeping tax reform by October aimed at easing the burden on the middle class and stimulating domestic business.
He also unveiled a new task force to dismantle outdated regulations, cut compliance costs, and remove legal hurdles slowing down entrepreneurship. These steps are part of Modi’s long-running Atmanirbhar Bharat campaign, designed to boost local manufacturing and reduce reliance on global powers. While there have been successes — such as Apple shifting part of its iPhone production to India — foreign investors warn that bureaucracy and sluggish approvals continue to hold back larger progress.

Stalemate With No Clear Way Out
Indian officials insist dialogue remains open. Commerce Minister Sunil Barthwal told reporters that India “remains fully engaged in trade talks with the U.S.” Yet only hours later, the U.S. delegation abruptly canceled its visit without explanation.
Experts say the stalemate is not surprising. “The Americans are making things very difficult for India, and Modi is not someone who backs down,” said C. Raja Mohan of the Institute of South Asian Studies in Singapore. Still, he noted, Modi is pushing his negotiators to remain pragmatic.

#TRUMP , #putin , #India , #TradeWar , #Geopolitics

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Chinese investors are increasingly turning their attention to Indonesia – not only for its massive consumer market and young workforce but also as a way to avoid the heavy tariffs imposed on Chinese goods by Donald Trump.
Mira Arifin, head of Bank of America’s Indonesia division, explains that a new agreement makes it quick and easy for Chinese firms to establish operations in the country. “We are seeing huge interest – practically every week, we are meeting new investors,” she says.

Phones Aren’t Ringing – They’re Exploding
Gao Xiaoyu of consulting firm PT Yard Zeal says she is overwhelmed with calls from Chinese companies looking to expand or relocate their production. “It’s a non-stop carousel of meetings,” she describes.
A similar picture emerges from Abednego Purnomo of Suryacipta Swadaya, who says the company’s phone lines, email, and WeChat are constantly busy with new inquiries. All these potential clients are from China, motivated by the favorable trade conditions between the U.S. and Indonesia.

Indonesia as the Escape Route from Tariffs
The tariff gap is significant – U.S. duties on Indonesian goods are 19%, while Chinese imports face rates exceeding 30%. This gives Indonesia a strategic advantage that Chinese businesses are eager to exploit.
Moreover, Indonesia’s economy exceeded expectations in Q2 2025, growing by 5.12% – its fastest pace in nearly two years. The country is the largest economy in Southeast Asia, the fourth most populous nation in the world, and boasts a massive domestic market.

Rising Investments and Attractive Profits
Government data shows Chinese and Hong Kong investments in Indonesia rose 6.5% year-over-year in the first half of 2025, reaching $8.2 billion. Total foreign direct investment (FDI) over the same period climbed to $26.56 billion.
Zhang Chao, a motorcycle headlight manufacturer, rented a four-story building in Jakarta for nearly $14 million annually. “In Indonesia, you can achieve a 20–30% profit margin, whereas in China, net margins might drop to as low as 3%,” he says.

Challenges That Can’t Be Ignored
Despite the investment boom, Indonesia still faces hurdles – bureaucratic red tape, poor infrastructure, and the lack of a complete industrial supply chain.
There are also concerns about overreliance on Chinese capital, especially in the nickel industry, where China controls nearly 75% of Indonesia’s smelters.

Real Estate Frenzy in West Java
Chinese companies from the textile, EV, and toy industries are racing to secure manufacturing facilities in West Java. Demand in Q1 2025 pushed warehouse and property prices up by 15–25% year-over-year. A growing consumer base has also lifted household spending to over 50% of Indonesia’s GDP.

Balancing Geopolitics
President Prabowo Subianto has openly expressed interest in strengthening trade ties with China, but also maintains close relations with the U.S. – his visit to Beijing was quickly followed by a trip to Washington.
According to Bryan Burgess from AidData, China has invested more capital into Indonesia over the past two decades than the U.S. and Australia combined.

#china , #Indonesia , #TrumpTariffs , #GlobalTrade , #TradeWar

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The Brazilian government on Wednesday unveiled the “Sovereign Brazil” program, a large-scale initiative aimed at protecting domestic exporters affected by the 50% import tariff imposed by US President Donald Trump on selected Brazilian products. The package, worth 30 billion reais (approximately $5.5 billion), combines low-interest loans, tax relief, and other measures to cushion the impact of Washington’s trade move.
Just hours after the program’s announcement, US Secretary of State Marco Rubio announced new sanctions against Brazilian officials, which, according to the Associated Press, underscores the growing diplomatic tension between the two countries.

Lula: Turning crisis into opportunity
President Luiz Inácio Lula da Silva presented the initiative as the first legislative step to assist affected exporters, which will be sent to Congress for approval. The meeting in Brasília, attended by lawmakers from across the political spectrum, showcased rare unity – seen by observers as a sign of greater political cohesion in response to US trade pressure.
The plan includes:
Deferring certain tax obligations for companies hit by US tariffs,Tax breaks worth 5 billion reais ($930 million) for small and medium-sized businesses until the end of 2026,Expanding insurance coverage for canceled foreign orders,Requiring public institutions to purchase goods that can no longer be shipped to the US,Extending the tax drawback system by one year for imported materials used in the production of export goods.

“We cannot allow ourselves to be paralyzed by a crisis. A crisis is a moment to create new things,” Lula said, calling the US move “unpleasant” and “without legitimate justification.”

Political backdrop of the tariffs
Trump partly tied the tariff decision to the legal case against his political ally, former Brazilian President Jair Bolsonaro, who is currently under house arrest. Lula accused Washington of using human rights rhetoric as a political tool. He stressed that Brazil’s judiciary is independent and judges will not yield to political pressure. Bolsonaro’s trial is expected to take place between September and October.
Justice Alexandre de Moraes, who is presiding over the case, has been targeted by US sanctions under the Magnitsky Act. He stated that all defendants are being afforded due process and pledged to continue his work despite the sanctions.

Rubio targets “Mais Médicos”
Shortly after Lula’s remarks, Rubio also announced visa restrictions for officials from Cuba and other governments linked to what he called a “program of exporting exploitative labor.” He cited Brazil’s “Mais Médicos” (More Doctors) program, launched in 2013, which brought thousands of foreign doctors, including Cubans, to underserved regions of the country.
Rubio called the initiative a “diplomatic fraud”, while the Brazilian government maintains that nearly 25,000 doctors currently work in the program, without specifying the number of Cubans.

Lula avoids immediate retaliation
Despite rising tensions, Lula said he would not activate Brazil’s reciprocity law to raise tariffs on US goods. “We don’t want conflict. We want to negotiate – but with the condition that our sovereignty remains untouchable,” he emphasized.
Finance Minister Fernando Haddad added sharply: “Brazil is being sanctioned for being more democratic than its aggressor.”
The diplomatic dispute shows no signs of cooling. Both nations continue to exchange measures and accusations, while Brazilian exporters wait to see the concrete effects of the new support program.

#brasil , #usa , #TradeWar , #Tariffs , #worldnews

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President Donald Trump has once again stirred controversy — this time targeting the top of the US banking sector. On Truth Social, he sharply told Goldman Sachs CEO David Solomon to replace the bank’s chief economist or “just focus on being a DJ,” after a new Goldman Sachs analysis suggested that US households will soon bear most of the costs of his tariff policy.

Trump: Tariffs Don’t Cause Inflation, They Fill the Treasury
In his post, Trump defended his trade strategy, insisting that tariffs have not caused inflation or “any other problems,” but instead have brought a “massive flow of money” into the US Treasury. Federal data shows that in July, tariff revenues reached nearly $28 billion.
According to Trump, the costs tied to tariffs are borne mainly by foreign governments and companies, not American consumers. This contradicts the findings of a Sunday report by chief economist Jan Hatzius, which estimated that Americans had already paid 22% of tariff costs by June and that this share could rise to 67% by October if new tariffs have the same effect as earlier ones.

Criticism of Goldman Sachs and Personal Jabs
Trump accused Goldman Sachs leadership of refusing to acknowledge the successes of his policies and reminded them that the bank had been wrong in the past when predicting tariff impacts. If Solomon doesn’t replace Hatzius, Trump quipped, he should “focus on the DJ booth rather than running a bank.”
The report in question argued that many businesses would likely pass on the cost of new tariffs to consumers, shifting more of the burden onto households. Trump maintains that his approach protects domestic industry while delivering unprecedented revenue to the government.

Easing of the Harshest Measures and Tariff Cuts
In recent months, Trump has scaled back parts of his tariff policy. His “reciprocal” tariffs, introduced in April, were paused shortly after implementation and resumed in a smaller form only last week. Tariffs on Chinese goods, which peaked at 145%, have been reduced to 30% since May.

Legal Battle Over Tariffs Heads to Court
Tensions are also playing out in the courts. Trump warned US judges not to block his tariff plan, claiming it could trigger “a repeat of 1929” and an economic collapse. He argued that striking down the tariffs would damage stock markets and halt economic recovery.
A federal appeals court is currently reviewing whether his trade measures comply with the International Emergency Economic Powers Act of 1977. Former House Speaker Paul Ryan told CNBC this week that the case could reach the Supreme Court, which might overturn the tariffs entirely.

Two Perspectives on the Same Issue
While the Trump administration insists that tariffs are a tool to protect US industry, Wall Street economists warn of higher costs for consumers. Several companies have already confirmed plans to raise prices. Goldman Sachs has not publicly responded to Trump’s sharp remarks, but the dispute highlights the stark contrast between the White House’s narrative on who pays for tariffs and the financial market’s projections of their real impact.

#DonaldTrump , #USPolitics , #Tariffs , #TradeWar , #WallStreet

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