1) Tomato prices could raise 40% from U.S. withdrawing from trade pact with Mexico, called the Tomato Suspension Agreement which expires this Tuesday. This will trigger duties of more than 17% on tomatoes coming from Mexico. Tomatoes from Mexico are selling below domestic production cost.
2) The Dow Jones slid down 648 points, before rising to 473 points on closing, over news that America will impose higher tariffs on Chinese goods late this week. The Nasdaq and S&P 500 also experienced similar significant drops over fears of a full blown trade war with a down turn in global growth and a drop in China’s GDP.
3) Analyst say that a breakdown in the semiconductor field is a warning sign that a trade war with China is coming. This industry is more sensitive to U.S. – Chinese trade tensions. Watch the Philadelphia Semiconductors SOX index, for if the index falls below about the 1,430 level, that indicates trouble.
4) 7 MAY 19 Stock market closings:
Dow 25,965.09 down 473.39 Nasdaq 7,963.76 down 159.53 S&P 500 2,884.05 down 48.42
United States Energy Secretary Rick Perry applauded Mexico’s incoming administration for ending gasoline and diesel imports. The imports come directly from the United States and the effects will prove profitable for Mexico, long term.
Mr. Lopez Labrador, Mexico’s incoming President, has indicated he was would end foreign imports to Mexico within the next 3 years. Refiners in the U.S. have invested billions of capital in Mexico and it has been prosperous for both countries.
Energy trading between United States and Mexico has been advantageous between both countries. -SB
Mexico has imposed tariffs on American imports such as pork, apples, grapes, cheese and steel. This is in connection to the tariffs President Trump imposed on steel and aluminum, which affects NAFTA countries Mexico and Canada.
The effects will alter the relationship on NAFTA; one which President Trump has already expressed is in unfair to American workers. He has stated he either wants to renegotiate a fair agreement amongst the NAFTA countries (USA, Canada, Mexico) or independently negotiate with Canada and Mexico, as separate individual countries. Mexico and Canada have both denounced such a proposal by Trump.
This is coming at a critical time for NAFTA, as Mexico gears for presidential elections on July 1, 2018 and US congressional midterm elections are in November 2018. -SB
Could a possible “trade war” be on the horizon, over Pres. Trump’s aluminum & steel tariffs? It could be the case says economic and international business negotiators.
Many economists have indicated that the tariffs imposed could be detrimental to the US economy, while others believe that the impact is minimal, because the tariffs Trump is planning to issue, will only cost American taxpayers a few cents more on the dollar, to support home grown/home based manufacturers, in the steel and aluminum industries.
Gary Cohen, White House director of the National Economic Council is against imposing a tariff on steel and aluminum, while Commerce Secretary Wilbur Ross and White House National Trade Council Director Peter Navarro, are for imposing the tariffs on steel and aluminum goods & products. –SB
Canada Pension Plan Investment Board along with Ontario Teachers Pension Plan have teamed up in investing capital in IDEAL, a Latin American infrastructure/building conglomerate. The partnership combined exceeds 1.35 billion. It said to be one of the biggest projects in Mexico as far as infrastructure and road development. Billionaire investor Carlos Slim own a major stake in the company.
The partnership seems to be beneficial for both parties as IDEAL was seeking funding and the pension funds were seeking to invest their funds in projects that would have logistical impact in Latin America and in Canada. IDEAL trades on the Mexican stock market, and has offices all over Latin America as expands its business and structural model in Mexico and the rest of Latin America. -SB
AT&T beat analysts expectations Wednesday, when their reported company earnings came out, beating analysts expectations of $.62 cents a share. Revenue from the company came in at $32.57 billion. It seems that the first quarter for AT&T was a productive year for the telecom giant, and its subsidiaries.
AT&T is the #2 wireless carrier and they are gearing up for their acquisition in DirecTv. The acquisition is supposed to be completed by the second quarter of 2015, if all goes well by federal regulators and federal proceedings. AT&T has already acquired NII Holdings in January 2015, parent company of Nextel Mexico for a reported $1.88 billion dollars. The deal is to give AT&T an extra three million subscribers in Mexico terrain. -SB