RBC BlueBay Asset Management’s Post

In 2025 we could witness a period in which all views may actually be proven correct (and incorrect), at different points in time. Mark Dowding reflects on the week: https://lnkd.in/gA9HucXB

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Jawhar KHELIFA

Head of Foreign Trade at the Bank for Agriculture and Rural Development | PhD in Economics Researcher in Development Economics and Sustainable Development

2mo

What caught my attention in the article is the clear contrast between the proposed policies and their objectives. According to the data mentioned in the article, the proposed tariffs on Mexico and Canada could harm 28% of total U.S. trade, potentially damaging the U.S. economy itself !! But the main contrast lies in referencing the U.S. economy’s attempts to leverage its strength amidst Europe’s economic stagnation to achieve economic cooperation between the two sides. While the European Union suffers from energy-related challenges and overregulation, it has made extraordinary efforts to reduce borrowing costs (by 25 basis points annually, according to the European Central Bank) to provide significant support to the industrial sector. This raises a profound question: Since tariffs on European exports to the U.S. could reduce demand for these products, this drop in exports might pressure European companies, increase their credit risks, and raise borrowing costs for European businesses and governments, undermining the European Central Bank’s efforts. How can the U.S. benefit from these circumstances without exacerbating global economic divisions?

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