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By Matt Oliver and Eir Nolsøe, The Telegraph, 4/28/2025
MarketMinder’s View: This article centers on politics, so please note MarketMinder is politically agnostic. We favor no political party nor any politician, highlighting these developments solely for their potential economic and market effects. Could US President Donald Trump’s tariffs mean unexpected tax hikes in the UK? That is what one widely read forecast is suggesting, echoing concerns we have seen repeatedly. “Mr Trump’s swingeing tariffs on US imports are forecast to crush Britain’s economic growth and dramatically curb business investment, according to EY Item Club. The economic forecaster downgraded its prediction for UK growth next year from 1.6pc to 0.9pc, and warned that the resulting loss in tax revenues threatened to reduce or even wipe out the £9.9bn of fiscal headroom Ms Reeves has left herself.” This makes two leaps. One, that tariffs will have a sweeping deleterious effect on the UK economy. Two, that the government would respond to any perceived tax revenue shortfall by hiking taxes. Both seem quite speculative. According to the Office for National Statistics, the US bought 16.2% of UK goods exports, making it the largest single-country trading partner but far smaller than the EU. Goods exports to the US totaled £59.3 billion, or just 2.1% of GDP. Given the UK faces only the 10% blanket tariff rate (plus 25% on steel, aluminum and autos), that trade isn’t going away, and businesses have many options for how to manage tariffs. The maximum potential tariff payment is a sliver of total output. Therefore, we see a high likelihood the UK’s services-heavy economy trounces expectations for tariff doom. Even if tax revenue does disappoint, hikes aren’t a given. The government could cut spending, tweak the rules, or, or, or. Speculation like this helps you see what markets are pricing in, which can be helpful, but it doesn’t tell you what will happen.
Cargo Shipments From China to US Slide Toward a Standstill
By Paul Berger, The Wall Street Journal, 4/28/2025
MarketMinder’s View: As economic data roll in, signs of tariffs’ effect on global trade continue popping up. This time, seabound freight between the US and China has fallen significantly. This was largely expected, considering US tariffs on Chinese goods reach as high as 145% (with some exceptions), effectively an embargo. Yet, as we have seen before, this doesn’t mean overall imports are tanking and the US is about to endure sweeping shortages. Rather, container shipments from Southeast Asia are surging. “The trade war between the U.S. and China has triggered retailers and manufacturers to switch their supply lines and rush products out of other parts of Asia, such as Vietnam and Malaysia.” Some of this is companies’ taking advantage of existing manufacturing facilities in other nations to serve the US market. And some is probably transshipping, whereby Chinese products take a pitstop in a lower-tariffed nation before heading to the US. Both were key workarounds for Chinese firms amid 2018’s tariff tiff. We will have to wait and see how this plays out, especially with rumblings of a possible de-escalation and more exemptions materializing. But overall, it is one reason we think these tariffs are likely to go better than the worst-case scenarios stocks priced in, bringing bullish relief.
Americans Are Downbeat on the Economy. They Keep Spending Anyway.
By Rachel Louise Ensign, The Wall Street Journal, 4/28/2025
MarketMinder’s View: There are some political themes here, so a friendly reminder that MarketMinder is nonpartisan. We prefer no political party nor any politician, assessing themes for their potential economic and/or market implications only. This piece weighs two datasets—March retail sales and the University of Michigan’s April index of consumer sentiment—and some anecdotal evidence in making the titular statement. And in doing so, it illustrates—however unintentionally—why sentiment readings don’t predict consumer spending. As it shows, people can feel pessimistic about the economy while feeling ok about their own personal situation, leading them to continue making discretionary purchases. Or they may be worried but excited to find something much-needed or much-wanted on sale. Partisan bias can also affect sentiment readings greatly, as this also shows. Overall, we think it is a timely reminder of the need to watch what people do, not what they say, when weighing economic prospects.
By Matt Oliver and Eir Nolsøe, The Telegraph, 4/28/2025
MarketMinder’s View: This article centers on politics, so please note MarketMinder is politically agnostic. We favor no political party nor any politician, highlighting these developments solely for their potential economic and market effects. Could US President Donald Trump’s tariffs mean unexpected tax hikes in the UK? That is what one widely read forecast is suggesting, echoing concerns we have seen repeatedly. “Mr Trump’s swingeing tariffs on US imports are forecast to crush Britain’s economic growth and dramatically curb business investment, according to EY Item Club. The economic forecaster downgraded its prediction for UK growth next year from 1.6pc to 0.9pc, and warned that the resulting loss in tax revenues threatened to reduce or even wipe out the £9.9bn of fiscal headroom Ms Reeves has left herself.” This makes two leaps. One, that tariffs will have a sweeping deleterious effect on the UK economy. Two, that the government would respond to any perceived tax revenue shortfall by hiking taxes. Both seem quite speculative. According to the Office for National Statistics, the US bought 16.2% of UK goods exports, making it the largest single-country trading partner but far smaller than the EU. Goods exports to the US totaled £59.3 billion, or just 2.1% of GDP. Given the UK faces only the 10% blanket tariff rate (plus 25% on steel, aluminum and autos), that trade isn’t going away, and businesses have many options for how to manage tariffs. The maximum potential tariff payment is a sliver of total output. Therefore, we see a high likelihood the UK’s services-heavy economy trounces expectations for tariff doom. Even if tax revenue does disappoint, hikes aren’t a given. The government could cut spending, tweak the rules, or, or, or. Speculation like this helps you see what markets are pricing in, which can be helpful, but it doesn’t tell you what will happen.
Cargo Shipments From China to US Slide Toward a Standstill
By Paul Berger, The Wall Street Journal, 4/28/2025
MarketMinder’s View: As economic data roll in, signs of tariffs’ effect on global trade continue popping up. This time, seabound freight between the US and China has fallen significantly. This was largely expected, considering US tariffs on Chinese goods reach as high as 145% (with some exceptions), effectively an embargo. Yet, as we have seen before, this doesn’t mean overall imports are tanking and the US is about to endure sweeping shortages. Rather, container shipments from Southeast Asia are surging. “The trade war between the U.S. and China has triggered retailers and manufacturers to switch their supply lines and rush products out of other parts of Asia, such as Vietnam and Malaysia.” Some of this is companies’ taking advantage of existing manufacturing facilities in other nations to serve the US market. And some is probably transshipping, whereby Chinese products take a pitstop in a lower-tariffed nation before heading to the US. Both were key workarounds for Chinese firms amid 2018’s tariff tiff. We will have to wait and see how this plays out, especially with rumblings of a possible de-escalation and more exemptions materializing. But overall, it is one reason we think these tariffs are likely to go better than the worst-case scenarios stocks priced in, bringing bullish relief.
Americans Are Downbeat on the Economy. They Keep Spending Anyway.
By Rachel Louise Ensign, The Wall Street Journal, 4/28/2025
MarketMinder’s View: There are some political themes here, so a friendly reminder that MarketMinder is nonpartisan. We prefer no political party nor any politician, assessing themes for their potential economic and/or market implications only. This piece weighs two datasets—March retail sales and the University of Michigan’s April index of consumer sentiment—and some anecdotal evidence in making the titular statement. And in doing so, it illustrates—however unintentionally—why sentiment readings don’t predict consumer spending. As it shows, people can feel pessimistic about the economy while feeling ok about their own personal situation, leading them to continue making discretionary purchases. Or they may be worried but excited to find something much-needed or much-wanted on sale. Partisan bias can also affect sentiment readings greatly, as this also shows. Overall, we think it is a timely reminder of the need to watch what people do, not what they say, when weighing economic prospects.