Latest news with #LombardOdier
Business Times
6 days ago
- Business
- Business Times
Trump's tariffs end Asia's era of fence-sitting
Tariff jam – seriously or literally? Are US President Donald Trump's tariff deadlines immutable, immovable and set in stone? If they are missed, does global mutually assured destruction ensue? Or rather, are deadlines simply levers of negotiation designed to exert pressure and expedite a deal with the US' trading partners? While politicians debate, the market has made up its mind. With major equity and credit markets at – or close to – all-time highs, tariff deadlines are being taken seriously (not literally), with some – of the Taco (Trump always chickens out) persuasion – believing deadlines will be extended ad infinitum, and others viewing that mutually beneficial solutions will be agreed upon sooner rather than later. At Lombard Odier, we take a more nuanced view. While markets are looking through tariff-related risks, we worry about complacency and the apparent disconnect between sky-high investor sentiment and macroeconomic risk. While we do not foresee an economic recession in the US, we do anticipate an economic slowdown. Hence, we have moved to modestly de-risk portfolios, particularly as we approach the illiquid summer months and the next Aug 1 tariff deadline for the US' major trading partners. Don't poke the bear What has struck me most about the tariff saga – China apart – is the apparent willingness of the US' major trading partners to engage in negotiations with Washington and resist the temptation to retaliate. While actual details around the US tariffs are typically incomplete, lacking or completely absent, there seems to be a reasonably constructive mindset among the parties involved to engage and forge a workable outcome. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Take the European Union for example. Last week, Trump announced 30 per cent tariffs on 560 billion euros (S$836.4 billion) of annual imports from the trading bloc starting Aug 1, 2025. This was an aggressive move. The EU has quietly drawn up a list of countermeasures targeting 72 billion euros of US goods ranging from Boeing aircraft to cars, but continues to insist on 'mutually beneficial' negotiations that possibly include the acceptance of a 10 per cent asymmetric tariff only affecting the region. Mexican trade negotiators – hit with the same 30 per cent tariff rate – have been similarly non-confrontational from Mexico's side. Why is this? It is entirely possible – even likely – that the US' trading partners do not fully buy into Trump's 'trade distortion' narrative; yet such is their need for continued, unfettered access to the (eye-wateringly) valuable US$20 trillion US consumer market that concessions will likely be made, and reciprocity around tariffs on US imports into their countries enacted. Geopolitical considerations – and no doubt the need to strengthen alliances with the US – also play a part in the equation and foster a willingness to negotiate. Our surplus, your problem But not everyone feels that way. Which brings us to China. Right now, trade is essential to the economy, which grew by a better-than-expected 5.2 per cent year on year (yoy) in the second quarter of 2025, fuelled by exports and export subsidies that underpinned the manufacturing sector. China's exports rose a robust 5.8 per cent yoy in June, beating analyst expectations (albeit reflecting front-loading ahead of the August tariff deadline). Simultaneously, China reported a surging US$114.7 billion trade surplus in June, up from US$103 billion in May. While Beijing will be quietly pleased that its export engine is still firing on all cylinders – particularly as private consumption remains in the doldrums – not everyone will share their pleasure. The US, for example, will see the trade surplus as further evidence of the economic distortion that characterises their bilateral relations, while regional neighbours will fear being swept up in superpower rivalries and end up as collateral damage. Particularly, they are concerned that the deals that Indonesia and Vietnam are finalising with the US sets a worrisome precedent, and establishes the benchmark (and expectations) for their own deals with the US. Note these deals appear to include lower tariffs for 'home-grown' exports to the US, and substantially higher tariffs on so-called 'transhipped' exports (rerouted Chinese goods skirting the US rules-of-origin checks). Should a similar template be imposed on them – think India, Cambodia, Thailand and Malaysia, et cetera – the implications for domestic growth and relations with China would be, to put it mildly, complex. Off the fence Not without justification, China believes its economic hinterland (and opportunity) is being boxed in by Washington, whose trade deals with local neighbours potentially limit and constrain China's export growth, by restricting its ability to tranship goods via them to the US. And for as long as consumption in China remains weak, export growth – for them – remains a national priority. Not surprisingly, Vietnam's trade provoked a sharp response from Beijing, which warned the South-east Asian nation (and other countries) that it would 'resolutely take countermeasures to safeguard its legitimate rights and interests'. For decades, without having to choose sides, Asian nations have enjoyed the economic benefits of trade with China, and the geopolitical security and protection afforded by a close strategic alliance with the US. Those days appear over now. Indeed, as if to underline the point, last week the US 'upped the ante' by threatening another 10 per cent tariff on countries aligning themselves with the (anti-US) policies of the Brics countries (which include Brazil, Russia, India, China and South Africa). The ongoing trade deals with the US – including the controversial transhipment clause – suggest the days of fence-sitting are over. As part of this superpower rivalry, Asia is being forced to take sides, and the fallout – from Japan to Indonesia – is uncertain, hard to predict and meaningfully consequential. The writer is chief investment officer, Asia, at Lombard Odier
Business Times
6 days ago
- Business
- Business Times
Tariff jam
SERIOUSLY, or literally? Are US President Donald Trump's tariff deadlines immutable, immovable and set in stone? If they are missed, does global mutually assured destruction ensue? Or rather, are deadlines simply levers of negotiation designed to exert pressure and expedite a deal with the US' trading partners? While politicians debate, the market has made up its mind. With major equity and credit markets at – or close to – all-time highs, tariff deadlines are being taken seriously (not literally), with some – of the Taco (Trump always chickens out) persuasion – believing deadlines will be extended ad infinitum, and others viewing that mutually beneficial solutions will be agreed upon sooner rather than later. At Lombard Odier, we take a more nuanced view. While markets are looking through tariff-related risks, we worry about complacency and the apparent disconnect between sky-high investor sentiment and macroeconomic risk. While we do not foresee an economic recession in the US, we do anticipate an economic slowdown. Hence, we have moved to modestly de-risk portfolios, particularly as we approach the illiquid summer months and the next Aug 1 tariff deadline for the US' major trading partners. Don't poke the bear What has struck me most about the tariff saga – China apart – is the apparent willingness of the US' major trading partners to engage in negotiations with Washington and resist the temptation to retaliate. While actual details around the US tariffs are typically incomplete, lacking or completely absent, there seems to be a reasonably constructive mindset among the parties involved to engage and forge a workable outcome. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Take the European Union for example. Last week, Trump announced 30 per cent tariffs on 560 billion euros (S$836.4 billion) of annual imports from the trading bloc starting Aug 1, 2025. This was an aggressive move. The EU has quietly drawn up a list of countermeasures targeting 72 billion euros of US goods ranging from Boeing aircraft to cars, but continues to insist on 'mutually beneficial' negotiations that possibly include the acceptance of a 10 per cent asymmetric tariff only affecting the region. Mexican trade negotiators – hit with the same 30 per cent tariff rate – have been similarly non-confrontational from Mexico's side. Why is this? It is entirely possible – even likely – that the US' trading partners do not fully buy into Trump's 'trade distortion' narrative; yet such is their need for continued, unfettered access to the (eye-wateringly) valuable US$20 trillion US consumer market that concessions will likely be made, and reciprocity around tariffs on US imports into their countries enacted. Geopolitical considerations – and no doubt the need to strengthen alliances with the US – also play a part in the equation and foster a willingness to negotiate. Our surplus, your problem But not everyone feels that way. Which brings us to China. Right now, trade is essential to the economy, which grew by a better-than-expected 5.2 per cent year on year (yoy) in the second quarter of 2025, fuelled by exports and export subsidies that underpinned the manufacturing sector. China's exports also rose a robust 5.8 per cent yoy in June, beating analyst expectations (albeit reflecting front-loading ahead of the August tariff deadline). Simultaneously, China reported a surging US$114.7 billion trade surplus in June, up from US$103 billion in May. While Beijing will be quietly pleased that its export engine is still firing on all cylinders – particularly as private consumption remains in the doldrums – not everyone will share their pleasure. The US, for example, will see the trade surplus as further evidence of the economic distortion that characterises their bilateral relations, while regional neighbours will fear being swept up in superpower rivalries and end up as collateral damage. Particularly, they are concerned that the deals that Indonesia and Vietnam are finalising with the US sets a worrisome precedent, and establishes the benchmark (and expectations) for their own deals with the US. Note these deals appear to include lower tariffs for 'home-grown' exports to the US, and substantially higher tariffs on so-called 'transhipped' exports (rerouted Chinese goods skirting the US rules-of-origin checks). Should a similar template be imposed on them – think India, Cambodia, Thailand and Malaysia, et cetera – the implications for domestic growth and relations with China would be, to put it mildly, complex. Off the fence Not without justification, China believes its economic hinterland (and opportunity) is being boxed in by Washington, whose trade deals with local neighbours potentially limit and constrain China's export growth by restricting its ability to tranship goods via them to the US. And for as long as consumption in China remains weak, export growth – for them – remains a national priority. Not surprisingly, Vietnam's trade provoked a sharp response from Beijing, which warned it (and other countries) that it would 'resolutely take countermeasures to safeguard its legitimate rights and interests'. For decades, without having to choose sides, Asian nations have enjoyed the economic benefits of trade with China, and the geopolitical security and protection afforded by a close strategic alliance with the US. Those days appear over now. Indeed, as if to underline the point, last week the US 'upped the ante' by threatening another 10 per cent tariff on countries aligning themselves with the (anti-US) policies of the Brics countries (which include Brazil, Russia, India, China and South Africa). The ongoing trade deals with the US – including the controversial transhipment clause – suggest the days of fence-sitting are over. As part of this superpower rivalry, Asia is being forced to take sides, and the fallout – from Japan to Indonesia – is uncertain, hard to predict and meaningfully consequential. The writer is chief investment officer, Asia, at Lombard Odier
Yahoo
07-07-2025
- Business
- Yahoo
Oil Prices Now Aligning More With Fundamentals, Lombard Odier's Woods Says
Oil prices declined after OPEC+ agreed to a bigger-than-expected production increase next month. Lombard Odier Asia CIO John Woods shares his views on the energy markets, telling Bloomberg Television that "oil is now aligning more with fundamentals than any geopolitical premium that might have been built in." Sign in to access your portfolio
Bloomberg
07-07-2025
- Business
- Bloomberg
Oil Prices Now Aligning More With Fundamentals, Lombard Odier's Woods Says
Oil prices declined after OPEC+ agreed to a bigger-than-expected production increase next month. Lombard Odier Asia CIO John Woods shares his views on the energy markets, telling Bloomberg Television that "oil is now aligning more with fundamentals than any geopolitical premium that might have been built in." (Source: Bloomberg)
Bloomberg
02-07-2025
- Politics
- Bloomberg
Uzbek in Swiss Money-Laundering Case Was Unfairly Detained, Says UN Panel
The Uzbek businesswoman at the heart of an impending Swiss money-laundering trial involving Lombard Odier & Cie was unfairly detained by her government for years, a United Nations panel concluded. The June opinion by the UN Working Group on Arbitrary Detention makes repeated references to the Swiss case against Gulnara Karimova and Lombard Odier, and while it isn't legally binding defense lawyers could use its conclusions to try to weaken the prosecutors' case.
