Wheat Slide Lower Continues
The Monday afternoon Crop Progress report showed the US winter wheat crop at 63% harvested, 1% below the 5-year average pace. The Spring wheat crop was 78% headed, 3% ahead of normal, with conditions up 4% to 54% gd/ex, as the Brugler500 index was up 4 points to 345.
Coffee Prices Surge on Dry Conditions in Brazil and Tariff Threats
Coffee Prices Sharply Higher on Dry Weather in Brazil and Tariff Threats
Grain Market Bears Seized the Moment Last Week. What That Means for Corn, Soybeans, and Wheat.
Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now!
Russian wheat production was estimated at 84 MMT by IKAR, a 0.5 MMT reduction from their prior number, with exports expected in 2025/26 at 42 MMT. Algeria purchased a large chunk of wheat this morning, with an estimated 1 MMT purchased.
Sep 25 CBOT Wheat is at $5.36 3/4, down 4 3/4 cents,
Dec 25 CBOT Wheat is at $5.57 3/4, down 4 1/2 cents,
Sep 25 KCBT Wheat is at $5.22 1/4, down 3/4 cent,
Dec 25 KCBT Wheat is at $5.44 3/4, down 3/4 cent,
Sep 25 MGEX Wheat is at $6.01, down 2 3/4 cents,
Dec 25 MGEX Wheat is at $6.21 1/2, down 2 cents,
On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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Yahoo
8 minutes ago
- Yahoo
Novartis reports strong Q2 with double-digit sales growth and core margin expansion; raises FY 2025 core operating income guidance
Ad hoc announcement pursuant to Art. 53 LR Q2 net sales grew +11% (cc1, +12% USD) with core operating income1 up +21% (cc, +20% USD) Sales growth driven by continued strong performance from Kisqali (+64% cc), Entresto (+22% cc), Kesimpta (+33% cc), Scemblix (+79% cc), Leqvio (+61% cc) and Pluvicto (+30% cc) Core operating income margin1 reached 42.2%, +340 basis points (cc), mainly driven by higher net sales Q2 operating income grew +25% (cc, +21% USD); net income up +26% (cc, +24% USD) Q2 core EPS1 grew +24% (cc, +23% USD) to USD 2.42 Q2 free cash flow1 of USD 6.3 billion (+37% USD) driven by higher net cash flows from operating activities H1 net sales up +13% (cc, +12% USD) and core operating income up +24% (cc, +21% USD) Q2 selected innovation milestones: Phase III PSMAddition study positive readout in PSMA+ mHSPC (atrasentan) FDA accelerated approval for IgAN OAV101 IT US and EU submissions for SMA Votoplam Phase II PIVOT-HD study positive readout in Huntington's disease Remibrutinib Phase II study positive readout in food allergy Initiating up-to USD 10 billion share buyback to be completed by year-end 2027 Full-year 2025 guidance2 raised for core operating income Sales expected to grow high single digit (unchanged) Core operating income expected to grow low teens (from low double-digit) 1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 40 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. Please see detailed guidance assumptions on page 7. Basel, July 17, 2025 – Commenting on Q2 2025 results, Vas Narasimhan, CEO of Novartis, said:'Novartis delivered another strong quarter, with double-digit sales and core operating income growth. We continue to drive strong performance on our ongoing launches for Kisqali, Pluvicto, and Scemblix, demonstrating the replacement power in our portfolio. We also delivered important pipeline milestones including a third positive Phase III readout for Pluvicto in hormone-sensitive prostate cancer and global filings for OAV101 IT in SMA. Our robust balance sheet and confidence in our mid and long-term growth enable us to initiate an up-to USD 10 billion share buyback as part of our commitment to balanced capital allocation." Key figures Q2 2025 Q2 2024 % change H1 2025 H1 2024 % change USD m USD m USD cc USD m USD m USD cc Net sales 14 054 12 512 12 11 27 287 24 341 12 13 Operating income 4 864 4 014 21 25 9 527 7 387 29 33 Net income 4 024 3 246 24 26 7 633 5 934 29 31 EPS (USD) 2.07 1.60 29 32 3.91 2.91 34 37 Free cash flow 6 333 4 615 37 9 724 6 653 46 Core operating income 5 925 4 953 20 21 11 500 9 490 21 24 Core net income 4 710 4 008 18 19 9 192 7 689 20 22 Core EPS (USD) 2.42 1.97 23 24 4.69 3.77 24 27 Strategy Our focus Novartis is a 'pure-play' innovative medicines company. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies – the US, China, Germany and Japan. Our priorities Accelerate growth: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas. Deliver returns: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility. Strengthen foundations: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society. Financials Second quarter Net sales were USD 14.1 billion (+12%, +11% cc), with volume contributing 12 percentage points to growth. Generic competition had a negative impact of 2 percentage points, pricing had a positive impact of 1 percentage point, and currency had a positive impact of 1 percentage point. Operating income was USD 4.9 billion (+21%, +25% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches and net expense from legal matters. Net income was USD 4.0 billion (+24%, +26% cc), mainly driven by higher operating income, partly offset by higher net financial expense. EPS was USD 2.07 (+29%, +32% cc), benefiting from the lower weighted average number of shares outstanding. Core operating income was USD 5.9 billion (+20%, +21% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches. Core operating income margin was 42.2% of net sales, increasing 2.6 percentage points (3.4 percentage points cc). Core net income was USD 4.7 billion (+18%, +19% cc), mainly due to higher core operating income, partly offset by higher income taxes and net financial expense. Core EPS was USD 2.42 (+23%, +24% cc), benefiting from the lower weighted average number of shares outstanding. Free cash flow amounted to USD 6.3 billion (+37% USD), compared with USD 4.6 billion in the prior-year quarter, driven by higher net cash flows from operating activities. First half Net sales were USD 27.3 billion (+12%, +13% cc), with volume contributing 14 percentage points to growth. Generic competition had a negative impact of 2 percentage points, pricing had a positive impact of 1 percentage point, benefiting from revenue deduction adjustments mainly in the US, and currency had a negative impact of 1 percentage point. Operating income was USD 9.5 billion (+29%, +33% cc), mainly driven by higher net sales and contingent consideration adjustments, partly offset by higher investments behind priority brands and launches. Net income was USD 7.6 billion (+29%, +31% cc), mainly driven by higher operating income, partly offset by higher income taxes and net financial expense. EPS was USD 3.91 (+34%, +37% cc), benefiting from the lower weighted average number of shares outstanding. Core operating income was USD 11.5 billion (+21%, +24% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches. Core operating income margin was 42.1% of net sales, increasing 3.1 percentage points (3.7 percentage points cc). Core net income was USD 9.2 billion (+20%, +22% cc), mainly due to higher core operating income, partly offset by higher income taxes and net financial expense. Core EPS was USD 4.69 (+24%, +27% cc), benefiting from the lower weighted average number of shares outstanding. Free cash flow amounted to USD 9.7 billion (+46% USD), compared with USD 6.7 billion in the prior-year period, driven by higher net cash flows from operating activities. Q2 priority brands Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q2 growth) including:(USD 1 177 million, +64% cc) sales grew strongly across all regions, including +100% growth in the US with strong momentum from the recently launched early breast cancer indication as well as continued share gains in metastatic breast cancer(USD 2 357 million, +22% cc) sustained robust, demand-led growth globally(USD 1 077 million, +33% cc) sales grew across all regions driven by increased demand and strong access(USD 298 million, +79% cc) sales grew across all regions, demonstrating the continued high unmet need in CML and continued strong momentum from the recently launched early-line indication in the US(USD 298 million, +61% cc) continued steady growth, with a focus on increasing account and patient adoption, and continuing medical education(USD 454 million, +30% cc) showed encouraging demand uptake in the US following the pre-taxane metastatic castration-resistant prostate cancer (mCRPC) approval, as well as continued access expansion ex-US in the post-taxane mCRPC setting(USD 1 629 million, +6% cc) sales grew mainly in the US and Europe, driven by recent launches as well as volume growth in core indications(USD 120 million) sales grew driven by continued launch execution across all markets in PNH as well as recent launches in IgAN and C3G in the US(USD 207 million, +17% cc) sales grew mainly in the US, Europe and Japan due to increased demand and earlier-line adoption, particularly in the US and Japan(USD 297 million, -17% cc) sales declined reflecting a lower incidence of SMA compared to prior year, while demand remained robust Net sales of the top 20 brands in the second quarter and first half Q2 2025 % change H1 2025 % change USD m USD cc USD m USD cc Entresto 2 357 24 22 4 618 22 22 Cosentyx 1 629 7 6 3 163 11 11 Kisqali 1 177 64 64 2 133 59 60 Kesimpta 1 077 35 33 1 976 38 38 Tafinlar + Mekinist 573 10 7 1 125 13 13 Promacta/Revolade 502 -8 -9 1 048 -2 -1 Jakavi 524 11 8 1 016 7 8 Xolair 443 4 2 899 9 10 Ilaris 477 30 27 896 24 24 Pluvicto 454 32 30 825 26 26 Tasigna 327 -27 -27 704 -16 -15 Zolgensma 297 -15 -17 624 -3 -3 Sandostatin Group 303 -3 -3 620 -7 -6 Leqvio 298 64 61 555 67 66 Scemblix 298 82 79 536 79 78 Lutathera 207 18 17 400 16 16 Exforge Group 191 7 7 370 0 3 Lucentis 173 -37 -39 362 -39 -38 Diovan Group 154 -4 -4 304 1 3 Galvus Group 123 -18 -17 247 -17 -14 Top 20 brands total 11 584 16 14 22 421 16 17 R&D update - key developments from the second quarter New approvals (atrasentan) FDA granted accelerated approval for Vanrafia for the reduction of proteinuria in adults with primary IgA nephropathy (IgAN) at risk of rapid disease progression. Vanrafia can be seamlessly added to supportive care in IgAN and used as a foundational therapy. (artemether and lumefantrine) In July, Swissmedic approved Coartem Baby, the first clinically proven malaria treatment specifically designed for newborns and infants between 2-5 kg. This milestone paves the way for registration in eight African countries through the Marketing Authorization for Global Health Products (MAGHP) procedure. Regulatory updates OAV101 IT (onasemnogene abeparvovec) Regulatory submissions for OAV101 IT in patients with spinal muscular atrophy (SMA) were completed in the US and EU. Results from ongoing trials and other highlights (lutetium Lu177 vipivotide tetraxetan) At a prespecified interim analysis, the Phase III PSMAddition trial in PSMA+ metastatic hormone-sensitive prostate cancer (mHSPC) met its primary endpoint with a statistically significant and clinically meaningful benefit in radiographic progression-free survival (rPFS) in patients treated with Pluvicto plus standard of care (SoC) versus SoC alone. The study also showed a positive trend in overall survival in favor of the Pluvicto arm. Data will be presented at an upcoming medical meeting and, based on FDA feedback, submitted for regulatory review in H2 2025. (secukinumab) In the Phase III GCAptAIN study, Cosentyx did not demonstrate a statistically significant improvement in sustained remission compared to placebo in adults with newly diagnosed or relapsing giant cell arteritis (GCA). Safety in GCA was consistent with the known safety profile of Cosentyx. (ribociclib) A new subgroup analysis of the Phase III NATALEE trial in HR+/HER2- early breast cancer (eBC) showed that patients receiving Kisqali plus endocrine therapy continued to see consistent reductions in risk of recurrence across all efficacy measures, regardless of age and menopausal status, at median follow-up of 44.2 months. Data presented at ASCO. (iptacopan) In the Phase IIIb APPULSE-PNH study, adult PNH patients with hemoglobin (Hb) levels ≥10g/dL who switched to Fabhalta from anti-C5 therapies experienced clinically meaningful improvements in Hb levels. The vast majority (92.7%) achieved Hb ≥12g/dL, reaching normal or near-normal levels. No patients treated with Fabhalta required transfusions, experienced breakthrough hemolysis or had any major adverse vascular events during the treatment period. Data presented at EHA. (asciminib) In the Phase IIIb ASC4START trial evaluating the tolerability and efficacy of Scemblix versus nilotinib in adult patients with newly diagnosed Ph+ CML-CP, patients treated with Scemblix had a 55% lower risk of discontinuation due to AEs vs nilotinib, and 12.7% more patients treated with Scemblix achieved major molecular responses by week 12 vs those treated with nilotinib. Data presented at ASCO and EHA. Votoplam The Phase II PIVOT-HD study of votoplam in patients with Stage 2 and Stage 3 Huntington's disease met its primary endpoint of reduction in blood Huntingtin (HTT) protein levels at Week 12 (p<0.0001), with durable, dose-dependent lowering observed through Month 12. Across all dose levels and disease stages, votoplam showed a favorable safety and tolerability profile, with no treatment-related serious adverse events or neurofilament light chain protein (NfL) spikes. Together with our partner, PTC Therapeutics, we are evaluating the results and plan to engage with the HD community and regulatory authorities to inform next steps. Remibrutinib A Phase II study with remibrutinib in food allergy met its primary endpoint with a statistically significant and clinically meaningful benefit. These data support remibrutinib's potential as a first-in-class oral BTK inhibitor that reduces the risk of severe allergic reactions, including anaphylaxis. Phase III study planning is underway. Ianalumab Novartis will not advance investigation of ianalumab in hidradenitis suppurativa following a Phase II proof-of-concept study which did not meet our target criteria despite demonstrating efficacy vs placebo. No new safety signals were observed and all other studies for ianalumab in B-cell driven diseases continue as planned. Rapcabtagene autoleucel (YTB323) A Phase I/II study of rapcabtagene autoleucel, a rapidly manufactured CD19 CAR-T therapy using the T-Charge platform, demonstrated the expansion of CAR-T cells, deep B cell depletion, early and sustained improvement in overall disease activity, and a favorable benefit/risk profile in 21 patients with severe refractory SLE up to 12 months after treatment. Data presented at EULAR. Zigakibart Updated results from the Phase I/II study for zigakibart in IgAN showed a robust and clinically meaningful reduction in proteinuria of 60.4% from baseline and eGFR stabilization over 100 weeks of treatment. To date, this is the longest duration of treatment reported for an anti-APRIL agent, demonstrating long-term safety and efficacy. Data presented at ERA. The Phase III BEYOND trial is ongoing with anticipated readout in 2026. Selected transactions Novartis has completed the acquisition of Regulus Therapeutics, a clinical-stage biopharmaceutical company focused on developing microRNA therapeutics. Regulus' lead asset, farabursen, is a potential first-in-class oligonucleotide targeting miR-17 for the treatment of autosomal dominant polycystic kidney disease (ADPKD) that recently completed Phase Ib. The acquisition is aligned with the therapeutic area focus of Novartis and leverages its strength and expertise in renal disease. In July, Novartis entered into an agreement with Sironax, granting Novartis an exclusive option to acquire its Brain Delivery Module (BDM) platform, a differentiated blood-brain-barrier crossing technology designed to enhance the brain delivery of therapeutics of various modalities. Capital structure and net debt Retaining a good balance between investment in the business, a strong capital structure, and attractive shareholder returns remains a priority. During the first half of 2025, Novartis repurchased a total of 48.8 million shares for USD 5.3 billion on the SIX Swiss Exchange second trading line under the USD 15 billion share buyback (announced in July 2023 and completed on July 1, 2025, with a total of 140.9 million shares repurchased over this period). In addition, 1.6 million shares (equity value of USD 0.2 billion) were repurchased from employees. In the same period, 11.2 million shares (equity value of USD 0.6 billion) were delivered to employees related to equity-based compensation plans. Novartis aims to offset the dilutive impact from equity-based compensation plans of employees over the remainder of the year. Consequently, the total number of shares outstanding decreased by 39.2 million versus December 31, 2024. These treasury share transactions resulted in an equity decrease of USD 4.9 billion and a net cash outflow of USD 5.4 billion. Net debt increased to USD 23.8 billion at June 30, 2025, compared to USD 16.1 billion at December 31, 2024. The increase was mainly due to the free cash flow of USD 9.7 billion being more than offset by the USD 7.8 billion annual dividend payment, cash outflows for treasury share transactions of USD 5.4 billion and net cash outflow for M&A, intangible assets transactions and other acquisitions of USD 3.1 billion. As of Q2 2025, the long-term credit rating for the company is Aa3 with Moody's Ratings and AA- with S&P Global Ratings. 2025 outlook Barring unforeseen events; growth vs. prior year in cc Net sales Expected to grow high single-digit Core operating income Expected to grow low-teens Key assumption: We continue to assume Entresto US generic entry in mid-2025 for forecasting purposes, though timing of generic entry is subject to ongoing IP and regulatory litigation Foreign exchange impact If mid-July exchange rates prevail for the remainder of 2025, the foreign exchange impact for the year would be positive 1 percentage point on net sales and negative 1 percentage point on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website. Key figures1 Q2 2025 Q2 2024 % change H1 2025 H1 2024 % change USD m USD m USD cc USD m USD m USD cc Net sales 14 054 12 512 12 11 27 287 24 341 12 13 Operating income 4 864 4 014 21 25 9 527 7 387 29 33 As a % of sales 34.6 32.1 34.9 30.3 Net income 4 024 3 246 24 26 7 633 5 934 29 31 EPS (USD) 2.07 1.60 29 32 3.91 2.91 34 37 Net cash flows from operating activities 6 664 4 875 37 10 309 7 140 44 Non-IFRS measures Free cash flow 6 333 4 615 37 9 724 6 653 46 Core operating income 5 925 4 953 20 21 11 500 9 490 21 24 As a % of sales 42.2 39.6 42.1 39.0 Core net income 4 710 4 008 18 19 9 192 7 689 20 22 Core EPS (USD) 2.42 1.97 23 24 4.69 3.77 24 27 1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 40 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below: DisclaimerThis press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as 'anticipate,' 'can,' 'will,' 'continue,' 'ongoing,' 'growth,' 'launch,' 'expect,' 'expand,' 'deliver,' 'accelerate,' 'guidance,' 'outlook,' 'priority,' 'potential,' 'momentum,' 'commitment,' or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, potential product launches, or regarding potential future revenues from any such products; or regarding results of ongoing clinical trials; or regarding potential future, pending or announced transactions; regarding potential future sales or earnings; or by discussions of strategy, plans, expectations or intentions, including discussions regarding our continued investment into new R&D capabilities and manufacturing; or regarding our capital structure. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. You should not place undue reliance on these statements. There can be no guarantee that the investigational or approved products described in this press release will be submitted or approved for sale or for any additional indications or labeling in any market, or at any particular time. Nor can there be any guarantee that such products will be commercially successful in the future. Neither can there be any guarantee that the expected benefits or synergies from the transactions described in this press release will be achieved in the expected timeframe, or at all. In particular, our expectations could be affected by, among other things: uncertainties concerning global healthcare cost containment, including ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency; uncertainties regarding the success of key products, commercial priorities and strategy; uncertainties in the research and development of new products, including clinical trial results and additional analysis of existing clinical data; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products; uncertainties regarding our ability to realize the strategic benefits, operational efficiencies or opportunities expected from our external business opportunities; uncertainties in the development or adoption of potentially transformational digital technologies, including artificial intelligence, and business models; uncertainties surrounding the implementation of our new IT projects and systems; uncertainties regarding potential significant breaches of information security or disruptions of our information technology systems; uncertainties regarding actual or potential legal proceedings, including regulatory actions or delays or government regulation related to the products and pipeline products described in this press release; safety, quality, data integrity, or manufacturing issues; our performance on and ability to comply with environmental, social and governance measures and requirements; major macroeconomic and geo- and socio-political developments, including the impact of any potential tariffs on our products or the impact of war in certain parts of the world; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; and other risks and factors referred to in Novartis AG's most recently filed Form 20-F and in subsequent reports filed with, or furnished to, the US Securities and Exchange Commission. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. All product names appearing in italics are trademarks owned by or licensed to Novartis. About Novartis Novartis is an innovative medicines company. Every day, we work to reimagine medicine to improve and extend people's lives so that patients, healthcare professionals and societies are empowered in the face of serious disease. Our medicines reach nearly 300 million people worldwide. Reimagine medicine with us: Visit us at and connect with us on LinkedIn, Facebook, X and Instagram. Novartis will conduct a conference call with investors to discuss this news release today at 14:00 Central European time and 8:00 Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Novartis website. A replay will be available after the live webcast by visiting Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below. Additional information is provided on our business and pipeline of selected compounds in late-stage development. A copy of today's earnings call presentation can be found at Important dates October 28, 2025 Third quarter & nine months 2025 results November 19-20, 2025 Meet Novartis Management 2025 (London, UK) December 1, 2025 Social Impact & Sustainability annual investor event (virtual) February 4, 2026 Fourth quarter & full year 2025 results # # # Novartis Media RelationsE-mail: Novartis Investor RelationsCentral investor relations line: +41 61 324 7944E-mail: Please find full media release in English attached and on the following link: Media release (PDF) Further language versions are available through the following links: German version is available through the following link:Medienmitteilung (PDF)Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
10 minutes ago
- CNN
Analysis: Trump's plan to cut off Russian oil funds could raise prices for everyone
US President Donald Trump is trying again to end the war in Ukraine – not by targeting Russia, but by hitting the countries that buy Russia's oil. Top of that list? China and India, two of the world's most important economies. The US could slap those countries with economic penalties, Trump said, if Russia doesn't agree to make peace within a 50-day limit. That could roil not just two of Asia's biggest markets but, by extension, the entire world, as India and China scramble to shore up supplies and find different oil sources – to avoid potentially hefty US tariffs or other sanctions. Russia made about $192 billion last year from selling oil, according to the International Energy Agency. Cutting that off could be effective – but also expensive, and not just for Moscow. Oil prices could spike globally if Russia's more than 7 million exported barrels of oil per day abruptly disappear. Oil markets haven't reacted much to Trump's threat yet, largely because of uncertainty around whether Trump will follow through and, if so, how. China on Tuesday also appeared unfazed. A spokesperson for its foreign ministry told reporters that 'coercion' wouldn't end conflict in Ukraine. India has yet to comment. But using heavy tariffs to stop countries buying Russian oil would be a blunt tool – and while they could significantly squeeze Russia's war funding, they could also unleash more havoc on the rest of the world. In the wake of Russian President Vladimir Putin's invasion of Ukraine, the US, United Kingdom and European Union threw up import bans and price caps on Russian oil. But Russia's exporters adapted quickly, rerouting the flow of the country's vast supplies from West to East, where buyers, especially in China and India, significantly stepped up purchases of discounted fuel. Three and a half years later, the war is grinding on. Trump, back in the White House for six months, is increasingly frustrated with Putin's apparent disinterest in peace. A bipartisan bill to let Trump tariff countries buying Russian energy or uranium at 500% had been gaining momentum in the Senate. Supporting lawmakers called the bill the 'sledgehammer' Trump needs to end the war. On Monday, Trump announced his own plan, saying the US was going to be doing 'secondary tariffs,' with a White House official clarifying to CNN that Trump meant secondary sanctions on other countries that buy Russian oil. 'They're secondary sanctions. It's sanctions on countries that are buying the oil from Russia. So it's really not about sanctioning Russia,' Matt Whitaker, the US ambassador to NATO, told CNN that day at the White House. 'It's about tariffs on countries like India and China that are buying their oil. It really is going to dramatically impact the Russian economy.' Secondary tariffs, which experts say could mean broadly imposing duties across a countries' exports to the US, would be a relatively new tool that could give India and China strong financial incentives to stop buy Russian oil, if it appears imminent. Both countries have already been in separate trade talks with the US to negotiate down other Trump-imposed levies. 'It's the strongest possible card from an energy perspective, at least, that the allies of Ukraine can play,' Ben McWilliams, an affiliate fellow in Energy and Climate Policy at Brussels think tank Bruegel, said of targeting Russian oil exports. 'But there's a question – even once they've been implemented, how serious is the US about enforcement?' But playing that strong card would come with consequences, ones that Trump might not be prepared to accept, analysts say. For one, the volumes at stake – and that could need to be replaced – are huge. Russian crude accounts for 36% of India's imports, and nearly a fifth of China's, making Russia both countries' top supplier, according to Muyu Xu, a senior oil analyst at trade intelligence firm Kpler, citing figures for the first six months of this year, which include estimates on how much China received via pipeline. Turkey clocks in as a distant third to those two buyers, but is a key purchaser of oil products, according to the Europe-based nonprofit Center for Research on Energy and Clean Air (CREA). Russian crude also flows to Hungary and Slovakia via pipeline under an EU exemption, the center's data show. 'If nobody is buying Russian oil, then where can we find the supplement? OPEC has some spare capacity, but it's difficult to ask them to pump 3.4 million barrels overnight,' said Kpler's Xu, referring to Russia's daily seaborne exports. 'It's just difficult to make up the market share … so we're definitely going to see the prices go up quite a lot.' And while that could pressure Putin, it would also pressure Trump. 'We all know that Trump dislikes high oil prices, and this is what makes this so complicated … because there is limited spare capacity, and there is limited way to compensate if there is a large disruption,' said commodity analyst Giovanni Staunovo at UBS in Zurich. 'It doesn't fit into the agenda of low oil prices.' Limits on current spare capacity and reserves, as well as a lead time of months or years to bring more production capacity online, could make it hard to keep oil prices low, he added. That said, the US could extend deadlines to buy time for more supplies – and sweeping tariffs may only be one tool in the Trump administration's kit. The president's advisors were likely providing him 'with a range of options that would include different forms of sanctions, including financial sanctions, as well as tariffs,' according to Gregory Shaffer, a professor of international law at Georgetown University. Those could include more traditional US uses of secondary sanctions, such as targeting entities or individuals from other countries involved in the Russian oil trade, or even expanding those sanctions to have a broader set of penalties, for example on securities trading or access to American technologies in a Russian oil-purchasing countries, he said. Already the Biden administration earlier this year imposed the harshest sanctions to date on Russia's oil industry, blacklisting two of its largest oil companies as well as nearly 200 oil-carrying vessels. A narrower sanctions approach than tariffs could be a more practical option, which could still have a sizable impact of disincentivizing players from the trade – if tightly enforced, experts say. 'The likelihood is that (secondary tariffs are) too disruptive for Trump to be willing to use,' according to Richard Bronze, head of geopolitics at London-based consultancy Energy Aspects. 'There's a higher chance that he'd end up using secondary sanctions, which are a more kind of targeted and well-understood tool.' Bronze noted Trump has already issued an executive order allowing a tariff of 25% on goods from countries buying Venezuelan oil in March, but that the US president 'hasn't taken any action to impose that.' The threatened penalties appear to have two goals: signal to Russia that it could be starved of profits and use its trading partners to ratchet up pressure. NATO chief Mark Rutte on Wednesday called on China, India and Brazil to 'please make the phone call to Vladimir Putin and tell him that he has to get serious about peace talks.' Otherwise, Trump's measures 'will slam back' on them, he said. (Brazil accounted for about 12% of purchases of Russian oil products last month, according to CREA. But while observers say a cash-strapped Moscow is closely watching this threat, Beijing and New Delhi are unlikely to want to press Putin or change course until they are absolutely sure how real Trump's threats are. Both countries have deep strategic ties with Russia and have defended their trade in the face of accusations they are funding the war – a conflict in which both claim to have not chosen sides. Given the scale of its Russian crude purchases, Beijing has room to barter with Trump and reduce its imports, but that won't change China's approach to Russia, according to Yun Sun, director of the China program at the Stimson Center think tank in Washington. 'I don't think China will be putting pressure on Russia, at least not because of US pressure' at this point, she said. China is also used to the US looking the other way as it imports significant volumes of sanctioned Iranian oil via intermediaries. And for India at present, the country 'sees no value in giving in to US pressure on Russian oil,' said Ajay Srivastava, founder of the India-based Global Trade Research Initiative. He noted that this is just one of a list of present and future 'unpredictable US demands' and shouldn't change India's 'strategic decisions.' Trump's own interests in maintaining trade with these major economies is one more reason for questions about whether and what measures will ultimately come to pass. 'This (tariff threat) may be more symbolic,' said Georgetown's Shaffer. But when it comes to the US signaling on its position on the war in Ukraine, he added, 'the symbolism matters.' CNN's Olesya Dmitracova and Rhea Mogul contributed reporting.
Bloomberg
40 minutes ago
- Bloomberg
A Week in China: Albanese's Visit Beyond the Photo Ops
Never miss an episode. Follow The Bloomberg Australia Podcast today. Prime Minister Anthony Albanese's six-day visit to China was a diplomatic reset that marks the full restoration of trade ties after years of friction. While the trip was framed around economics, the stakes were far broader, as tensions simmer over Taiwan, defense, and Australia's balancing act between its biggest trading partner and its key security ally, the US.
