Asian markets drop as Trump's tariff deadline looms
HONG KONG (AFP) Most Asian markets fell Monday as countries fought to hammer out trade deals days before Donald Trump's tariff deadline, though investors took heart after he said the levies would not kick in until the start of next month.While the White House has said several deals were in the pipeline, only two have been finalised ahead of the July 9 cut-off set by the US president.Governments from major trading partners including Japan, India, the European Union, and South Korea have fought for the past three months to get agreements.But Trump said he will send his first tariff letters at 1600 GMT Monday, setting out what Washington will charge for doing business with the United States.The deadline for a deal is Wednesday, but Treasury Secretary Scott Bessent confirmed on Sunday that the measures would not be applied until August 1.The president told reporters Sunday on Air Force One that "I think we'll have most countries done by July 9, either a letter or a deal," adding that some deals have already been made.Tariff uncertainty weighed on equity markets, with Tokyo, Hong Kong, Shanghai, Sydney, and Wellington all down, though there were small gains in Singapore, Seoul, Manila, and Jakarta.Wall Street was closed Friday for a holiday.Oil prices sank after Saudi Arabia, Russia, and other major producers in the OPEC+ alliance said they would boost output far more than expected in August, fuelling demand worries just as Trump's tariffs are about to begin.
The group said "a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories," led to the decision to further hike output.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Post
an hour ago
- Arabian Post
India Needs To Raise Defence Spending Substantially
By Nantoo Banerjee It is difficult to believe that India, the world's fourth largest economy by gross domestic product (GDP) and a major military power, ranks below even the tiny states of Kuwait and Greece when it comes to defence spending as a percentage of GDP. Considering the tricky geo-political situation in the south Asian region with China, India's No. 1 enemy increasingly surrounding the country with its growing economic and military control over Bangladesh, Sri Lanka, Maldives, Pakistan and Nepal, India does not seem to be spending enough on its defence in the face of a growing China threat. In terms of gross value, India's annual defence budget may not look that unimpressive, but it accounts for less than one-third of China's defence expenditure of nearly $267 billion. The US continues to be the biggest defence spender with a budget of $895 billion. Russia's defence budget is worth around $126 billion. India's defence budget is estimated at only around $75 billion. Effectively, India's defence spending works out 1.9 percent of its GDP. Although China's defence spending is officially estimated at only 1.5 percent of its economy, it excludes several important expenditures such as weapon imports, funding for the People's Armed Police, and research and development, according to the As a result, China's effective defence expenditure may be largely hidden. Or, it could be significantly higher than the publicly shared estimate. Communist China, the third major global military power after the US and Russia, has been rapidly modernizing its technological capability in the defence sector as it is expanding its presence across the world, only next to the US. It is difficult to assess China's actual military expenditure as it is also supposed to provide protection to the country's Belts & Roads Initiative (BRI) investments that cover some 150 countries across the world. The Chinese BRI spans across Asia, Africa, Europe, Latin America, and the Pacific region. Going by the recent reports, China has a potential base in Sri Lanka, Pakistan, Tanzania, Mauritius, Maldives and Myanmar. China is engaged in developing commercial seaports or free trade zones in the Indian Ocean's points of these countries. China is also supporting these countries with finalized contracts for conventional arms sales. The US is concerned. And, so is India. This explains the formation of the Quadrilateral Security Dialogue, or Quad, operating as a strategic forum to promote regional security and cooperation in the Indo-Pacific region, with a focus on shared values and a free and open international order based on the rule of law. The Quad member countries are: the US, Japan, Australia, and India. Interestingly, after the latest meeting of the defence ministers of the 10-member Shanghai Cooperation Organisation (SCO), which includes China, India, Pakistan and Iran, Indian Defence Minister Rajnath Singh refused to sign a draft statement that did not mention the Pahalgam terror attack. As a result, no joint declaration was made. Pakistan's defence spending is around 2.2 percent of its GDP. For the current fiscal year 2025-26, the country's defence budget was initially proposed to be 1.97 percent of GDP. However, following the recent four-day India-Pakistan war, indications are that Pakistan's defence spending, including hidden costs, military pensions and total military-related expenditure, may well exceed four percent of its GDP this year. In recent years, Pakistan's defence spending has generally remained at around 2.5 percent of GDP. Largely import-dependent on China for critical war equipment stocks, Pakistan appears to be ready to fight proxy war for China in both the South and West Asian regions. China's BRI investment in Pakistan, primarily through the China-Pakistan Economic Corridor (CPEC), is estimated to cost $62 billion. The CPEC is a key component of the BRI, aiming to enhance connectivity and trade between the two countries. The 27-member European Union, which appears to be fighting a proxy war in support of Ukraine against Russia, is looking to raise the defence expenditure to as high as five percent of its GDP due to a combination of factors, including Russia's aggression in Ukraine, a reassessment of security risks, the need to modernize its defence capabilities, and to better align with NATO's defence plans. According to reports, Ukraine's prolonged war against Russia is behind the EU's decision in support of a stronger and more unified European defence, particularly in the face of US President Donald Trump's lack of interest in continuously fund-feeding the European partners of NATO. The EU defence expenditure target of five percent of GDP includes investments in broader security areas, such as infrastructure upgrades (roads, railways, bridges), cyber defence, and military mobility to facilitate quick reinforcement. Among the world's top military spenders as percentage of GDP are: Ukraine (34.5 percent), Lebanon (10.5 percent), Israel (8.8 percent), Russia and Saudi Arabia (7.1 percent each), Kuwait (4.8 percent), Poland (4.2 percent) and the US (3.4 percent). India's proposed defence spending as a percentage of GDP in the 2025-26 budget, estimated to be 1.9 percent, represents a substantial decrease from its historical levels of around three percent, excluding large defence pensions, in the early 2000s. While the overall budget allocation for defence has increased in recent years, the percentage of GDP allocated for the purpose has remained at a relatively lower level below two percent. This is despite the changing security environment in the region in the last two decades. Recently, even Bangladesh had the guts to threaten India with possible military action to cut off the 'chicken's neck' in the Dooars region to sever India's land link with its eight north eastern states, namely Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura. India should not take the first ever Bangladeshi threat of this nature lightly since the country's import-dependent military is substantially controlled by China. This more than explains why India needs to increase its effective defence spending as a percentage of GDP in the coming years to remain fighting fit to protect the country's territorial integrity and economic progress in the face of a Chinese proxy war using both Pakistan and Bangladesh against India. (IPA Service)
Middle East Eye
3 hours ago
- Middle East Eye
Iran receives Chinese surface-to-air-missile batteries after Israel ceasefire deal
Iran has taken possession of Chinese surface-to-air missile batteries as Tehran rapidly moves to rebuild defensives destroyed by Israel during their recent 12-day conflict, sources have told Middle East Eye. The deliveries of Chinese surface-to-air missile batteries occurred after a de-facto truce was struck between Iran and Israel on 24 June, an Arab official familiar with the intelligence told MEE. Another Arab official, who spoke on the condition of anonymity to discuss the sensitive intelligence, said that the US's Arab allies were aware of Tehran's efforts to "back up and reinforce" its air defences and that the White House had been informed of Iran's progress. The officials did not say how many surface-to-air missiles, or SAMs, Iran had received from China since the end of the fighting. However, one of the Arab officials said that Iran was paying for the SAMs with oil shipments. China is the largest importer of Iranian oil, and the US Energy Information Administration suggested in a report in May that nearly 90 percent of Iran's crude and condensate exports flow to Beijing. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters For several years, China has imported record amounts of Iranian oil despite US sanctions, using countries such as Malaysia as a transshipment hub to mask the crude's origin. "The Iranians engage in creative ways of trading," the second Arab official told MEE. Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump are expected to discuss Iran and its nuclear programme when they meet on Monday. MEE reached out to the White House for comment but did not receive a response by the time of publication. Deepening relationship The shipments mark a deepening of Beijing's relationship with Tehran and come as some in the West noted that China and Russia appeared to keep a distance from Iran amid Israel's unprecedented attacks. Israel achieved air superiority over Iran's skies during the conflict, destroying ballistic missile launch pads and assassinating Iranian generals and scientists. Despite this, the government endured the strikes. It was also able to continue firing ballistic missiles at Israel, decimating several sensitive sites in Tel Aviv and Haifa before a ceasefire took hold. By allowing Israel to bomb Iran, Trump is pushing Tehran to go nuclear Read More » In the late 1980s, Iran received HY-2 Silkworm cruise missiles from China via North Korea when it was at war with Iraq. The Islamic Republic used the missiles to attack Kuwait and strike a US-flagged oil tanker during the so-called tanker wars. In 2010, there were reports that Iran received HQ9 anti-aircraft missiles from China. Iran is believed to use Russia's S-300, which is capable of engaging aircraft and UAVs in addition to providing some cruise and ballistic missile defence capability, as well as older Chinese systems and locally produced batteries such as the Khordad series and the Bavar-373. These systems are believed to have a limited ability to shoot down the US F-35 stealth warplane that Israel operates. China already sells its HQ-9 and HQ-16 air defence systems to Pakistan. Egypt is also understood to have China's HQ-9 system, according to reports.
Arabian Post
7 hours ago
- Arabian Post
Sri Lankan equities are an Asian frontier market money gusher!
Matein Khalid Sri Lanka is one of the most fascinating and drop-dead gorgeous countries I have ever visited, the island once known as Serendip by ancient Umayyad Arab sailors/ruby merchants and Ceylon by the colonial Dutch and British who once ruled the island, an emerald tear drop in the Indian Ocean. I have a special bond with Sri Lanka because my late mother, an artist, used to spend her summers painting in the exquisite resort of Nuwara Eliya when I was a teenager in the early 80's before the ghastly 26-year civil war devastated this magic land. So I was thrilled when my friend Ruchir Desai, fund manager of Hong Kong's Asian Frontier Capital (AFC) tripled his weight in Sri Lanka from 5% to 14%. When I last met Ruchir for coffee at the Ritz DIFC terrace (oops, it should have been tea), he told me that he expected the Commercial Bank of Ceylon shares to rise 50% in the next 12-months. As an investor in bank stocks (note Citigroup, one of my fave New York money center banks in the past year, is now trading at 88.72, up 37% in the past year). I passed this invaluable financial intel Ruchir gifted me to the three Sri Lankan ladies I have adopted as my sisters. Thank you Sheila, Anola and Naufarah! It is so nice to hear good news from Sri Lanka as I was last there on the eve of its 2022 political crisis, rupee meltdown, petrol lines and IMF bailout. ADVERTISEMENT Sri Lankan equities are priced inexpensively at 8X earnings, down from 14X three years ago. As Ruchi puts it, the combination of cheap valuations, accelerating earnings growth and political stability after the election of Anura Kumara Dissanayake as President is a fantastic combination and a compelling argument to allocate money now to this exciting Asian frontier market. The IMF program is rock solid, the external debt restructuring is over and the central bank governor in Colombo, whom Ruchir regularly visits on his company calls to SL is one of the most respected monetary mandarins in Asia. After five difficult years, the growth cycle has finally begun in Sri Lanka with a stable GDP, rising EPS/margins, the proverbial sweet spot for equities outperformance. Colombo is on the eve of a historic valuation rerating and I do not intend to miss this frontier market Xanadu in 2025, thanks to Ruchir, my Asian frontier market sherpa. I can attest from personal experience that tourism, banking and logistics are quintessential growth industries in Sri Lanka. Strangely enough, I was a student of Raj Rajaratnam when he was a finance TA at Wharton two decades before he became a star technology hedge fund manager at Galleon and Sri Lanka's only billionaire in New York before his fall from grace in a sordid insider trading scandal. While I preferred to stay at the historic Galle Face Hotel, I was stunned by the number of young Indian and Chinese tourists who crowded the casinos in the five star steel and concrete hotel monstrosities on the Colombo seafront. Hopefully, the government's current focus on fiscal consolidation and reform momentum continues to deliver a multi-year bull market in Sri Lankan equities as the Field Marshal, Shaz Speed and Aurie have delivered in Pakistan since the exit of Imran Khan. Ruchir is also my jungle guide for Pakistan, Central Asia, Iraq and Vietnamese equities in addition to SL. I must rename my friend the bionic $6-Million Man LOL. My 2-paisa suggestions to the Colombo stock exchange. One, you need to do everything in your power to boost liquidity before I can seriously help you attract Gulf family office money or institutional capital to SL. Two, the emerging debt market's heavy hitters in New York do not take kindly to investing in the bonds of a country named the Democratic Socialist Republic of Sri Lanka as it sounds eerily similar to Zohranomics LOL. Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
