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Trump raises tariffs to 104% on China, fuels fears of global economic recession

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NEW YORK, April 9: Despite significant turmoil in financial markets, threats of retaliation, and pressure from some of President Donald Trump’s key supporters to scale back his signature economic policy, Trump pressed forward with his aggressive stance on trade. On Wednesday, his administration imposed new “reciprocal” tariffs on a range of American allies and adversaries, aiming to, in his words, restore fairness and revitalize American manufacturing.

China, the primary target, now faces tariffs of at least 104%, surpassing the initially planned figures. Trump raised these tariffs further after Beijing maintained its promise to impose 34% retaliatory tariffs on U.S. goods. The new tariff rates, which were based on a formula involving a country’s trade deficit with the U.S., range from 11% to 50%. In this round, key U.S. trading partners such as the European Union (20%), China (34%), Japan (24%), Vietnam (46%), and South Korea (25%) were all affected, with Mexico and Canada being the only major exceptions.

These tariff hikes come just days after Trump levied a 10% universal tariff on all imports except from Mexico and Canada. The 10% tariff is not added to the new reciprocal tariffs; for instance, Japan’s tariff rate increased by 14% on Wednesday after the initial 10% was already applied.

In a recent statement, Trump declared, “Our country and its taxpayers have been ripped off for more than 50 years. But it is not going to happen anymore.” He reiterated similar remarks just hours before the tariffs went into effect, accusing other countries, particularly China, of “leaving us for dead.”

As these tariffs take effect, both Americans and people worldwide will feel the financial impact. Importers will initially bear the brunt of the tariffs, but those costs are typically passed on to wholesalers, retailers, and ultimately consumers. Foreign businesses are also likely to feel the effects, with American companies potentially seeking goods from countries with lower tariff rates.

The ongoing trade war threatens to escalate, with China’s Foreign Ministry promising to take “resolute and effective measures” to protect its interests, though no immediate retaliatory actions were announced. The market’s reaction has been swift, with several trillion dollars in U.S. stock market value evaporating since April 2, leading to heightened concerns about a global recession. JPMorgan has increased its forecast for a global recession to 60% by year-end if Trump continues with his full tariff plan.

Economists at JPMorgan highlighted that the tariff hikes under Trump’s administration represent the largest U.S. tax increase in nearly six decades. These measures could have significant consequences for household and business spending, leading to retaliation, declining business sentiment, and disruptions to global supply chains. The nonpartisan Tax Foundation estimates that American consumers will face an additional $2,100 in annual costs due to these tariffs.

Since returning to the White House, Trump has continued to make bold moves. Prior to this latest round, he had already imposed a 20% tariff on all Chinese imports and 25% tariffs on steel, aluminum, and automotive imports.

Goldman Sachs has raised its forecast for a U.S. recession to 45% within the next year, up from previous estimates. In a note titled “Countdown to a Recession,” the bank’s economists expressed surprise that Trump did not initially announce even higher tariffs and then scale them back.

Economists such as Brian Bethune, an economics professor at Boston College, predict that unless significant revisions are made to the tariffs, the U.S. economy will enter a recession by the second quarter of the year. There are even concerns that the tariffs could spark stagflation, a scenario where economic growth slows while inflation rises.

Despite these ominous predictions, not all analysts believe a recession is inevitable. Morgan Stanley analysts have suggested that the U.S. could avoid a downturn if Trump strikes deals with other nations to lower tariffs. Trump’s chief trade adviser, Peter Navarro, echoed this sentiment, confidently telling Fox News that he guaranteed the U.S. economy would not enter a recession.

However, even as dozens of countries have expressed a willingness to negotiate, it remains unclear whether these discussions will yield any results. Trump’s administration has made it clear that non-tariff trade barriers—such as currency manipulation, unfair tax policies, and labor conditions—are at the heart of their trade disputes, and they’ve rejected offers to reduce tariffs on U.S. goods in exchange for similar treatment.

China, the world’s second-largest economy, has been the hardest hit by Trump’s tariffs, and the U.S. and China are now fully engaged in a trade war. When Trump’s first term ended, the U.S. charged an average tariff rate of 19.3% on Chinese goods, according to the Peterson Institute for International Economics. Under President Biden, these tariffs have remained largely intact, with the average tariff rate on Chinese goods increasing slightly to 20.8%.

While both the U.S. and China have benefited from decades of trade, the U.S. has increasingly sought goods from other countries, such as Mexico, which overtook China as the largest source of U.S. imports in 2023. Several other Asian countries, including Vietnam, South Korea, and Taiwan, have also seen their trade with the U.S. surge since the start of Trump’s presidency.

Even with existing tariffs, China remained a significant supplier of goods to the U.S. in 2024, with $439 billion worth of Chinese goods entering the U.S., while the U.S. exported $144 billion in goods to China. The mutual tariffs imposed by both countries threaten to hurt domestic industries and could lead to layoffs in both nations.

If Trump were to reverse his tariff decisions, much of the economic damage could be mitigated, though some effects would likely remain. Colin Grabow, an associate director at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, noted that Trump’s approach has damaged U.S. credibility, undermining long-standing free trade agreements and making it difficult for businesses to plan with certainty.

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MEW gets CAPT approval to link external sites, NDCC

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KUWAIT CITY, July 21: The Ministry of Electricity, Water and Renewable Energy has obtained approval from the Central Agency for Public Tenders (CAPT) to issue a tender for linking the external sites of the ministry with the National Data Control Center (NDCC), say sources from the ministry. Sources indicated that this tender is included in the contracts of the ministry for the current fiscal year and are scheduled to be implemented by the Planning, Training and Information Systems Sector. Sources revealed that the tender is for linking the external branches with the data center in the main ministry building and the NDCC in order to allow the exchange of information and provision of electronic services.

Sources pointed out that “subject to the approval of CAPT, the tender will be announced and a date will be set for specialized companies to submit their bids, select the winning bid and implement the project under the regulations.” Sources added the ministry intends to install five main power transformer stations for the Automobile Circuit Project — Rawda Block Three, Kabd C, cow farms, Sharq Block Four and Al- Arabi Club; in addition to supplying and extending the necessary underground cables to feed the five planned stations through two tenders: the first for the stations and the second for the cables. Sources said the two tenders aim to provide the energy needed to expand the high-voltage and ultra- high-voltage electrical networks resulting from the increased demand for electricity in the aforementioned areas, as well as to provide electricity continuously throughout the day. Moreover, the ministry also confirmed the start of electricity connection in Al-Mutlaa Residential City (N1 District – parts of Block One; in cooperation with the Public Authority for Housing Welfare (PAHW). It reiterated that it is now receiving applications to connect electricity to 251 plots

By Mohammad Ghanem
 Al-Seyassah/Arab Times Staff 

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DGCA of Kuwait and Japan Take Off on a New Chapter of Aviation Cooperation

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DGCA of Kuwait and Japan Take Off on a New Chapter of Aviation Cooperation

Chairman of the Kuwaiti Directorate General of Civil Aviation (DGCA) Sheikh Humoud Mubarak Humoud Al-Sabah receives the Japanese Ambassador to Kuwait Kenichiro Mukai

KUWAIT CITY, July 21: Chairman of the Kuwaiti Directorate General of Civil Aviation (DGCA) Sheikh Humoud Mubarak Humoud Al-Jaber Al- Sabah said Sunday that the DGCA looks forward to promoting cooperation with Japan in civil aviation. Sheikh Humoud made the remarks while welcoming Japanese Ambassador to Kuwait Kenichiro Mukai to discuss bilateral cooperation in the field of civil aviation, the DGCA said in a press release. He underlined the importance of deepening the distinguished ties between both friendly countries, praising Japan’s advanced experience in technology and aviation industry, it said. For his part, the Japanese Ambassador expressed his appreciation to the Kuwaiti official for his hospitality, saying that his country is interested in furthering cooperation with the State of Kuwait in aviation, in a way that contributes to exchanging expertise and achieving integration in the fields that concern both sides. (KUNA)

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‘Please be careful.’ There are risks and rewards as crypto heavyweights push tokenization

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NEW YORK, July 21, (AP): As cryptocurrencies become more intertwined with the traditional financial system, industry heavyweights are racing for a long-sought goal of turning real-world assets into digital tokens.

“Tokenization is going to open the door to a massive trading revolution,” said Vlad Tenev, the CEO of the trading platform Robinhood at a recent James Bond-themed tokenization launch event in the south of France.

Advocates say tokenization is the next leap forward in crypto and can help break down walls that have advantaged the wealthy and make trading cheaper, more transparent and more accessible for everyday investors.

But critics say tokenization threatens to undermine a century’s worth of securities law and investor protections that have made the U.S. financial system the envy of the world. And Robinhood’s push into tokenizing shares of private companies quickly faced pushback from one of the world’s most popular startups.

The basic idea behind tokenization: Use blockchain technology that powers cryptocurrencies to create digital tokens as stand-ins for things like bonds, real estate or even fractional ownership of a piece of art and that can be traded like crypto by virtually anyone, anywhere at any time.

The massive growth of stablecoins, which are a type of cryptocurrency typically bought and sold for $1, has helped fuel the appetite to tokenize other financial assets, crypto venture capitalist Katie Haun said on a recent podcast.

She said tokenization will upend investing in ways similar to how streamers radically changed how people watch television.

“You used to have to sit there on a Thursday night and watch Seinfeld,” Haun said. “You tune in at a specific time, you don’t get to choose your program, you couldn’t be watching a program like Squid Games from Korea. Netflix was market-expanding. In the same way, I think the tokenization of real-world assets will be market expanding.”

Robinhood began offering tokenized stock trading of major U.S. public companies for its European customers earlier this month and gave away tokens to some customers meant to represent shares in OpenAI and SpaceX, two highly valued private companies.

Several other firms are diving in. Crypto exchange Kraken also allows customers outside the U.S. to trade tokenized stocks while Coinbase has petitioned regulators to open the market to its U.S. customers. Wall Street giants BlackRock and Franklin Templeton currently offer tokenized money market funds. McKinsey projects that tokenized assets could reach $2 trillion by 2030.

The push for tokenization comes at a heady time in crypto, an industry that’s seen enormous growth from the creation and early development of bitcoin more than 15 years ago by libertarian-leaning computer enthusiasts to a growing acceptance in mainstream finance.

The world’s most popular cryptocurrency is now regularly setting all-time highs – more than $123,000 on Monday – while other forms of crypto like stablecoins are exploding in use and the Trump administration has pledged to usher in what’s been called the “golden age” for digital assets.

Lee Reiners, a lecturing fellow at Duke University, said the biggest winners in the push for tokenization could be a small handful of exchanges like Robinhood that see their trading volumes and influence spike.

“Which is kind of ironic given the origins of crypto, which was to bypass intermediaries,” Reiners said.

Interest in tokenization has also gotten a boost thanks to the election of President Donald Trump, who has made enacting more crypto-friendly regulations a top priority of his administration and signed a new law regulating stablecoins on Friday.

“Tokenization is an innovation and we at the SEC should be focused on how do we advance innovation at the marketplace,” said Securities and Exchange Commission Chairman Paul Atkins.

Securities law can be complex and even defining what is a security can be a hotly debated question, particularly in crypto. The crypto exchange Binance pulled back offerings of tokenized securities in 2021 after German regulators raised questions about potential violations of that country’s securities law.

Under Trump, the SEC has taken a much less expansive view than the previous administration and dropped or paused litigation against crypto companies that the agency had previously accused of violating securities law.

Hilary Allen, a professor at the American University Washington College of Law, said crypto companies have been emboldened by Trump’s victory to be more aggressive in pushing what they can offer.

“The most pressing risk is (tokenization) being used as a regulatory arbitrage play as a way of getting around the rules,” she said.

However, the SEC has struck a cautionary tone when it comes to tokens. Shortly after Robinhood’s announcement, SEC Commissioner Hester Peirce, who has been an outspoken crypto supporter, issued a statement saying companies issuing tokenized stock should consider “their disclosure obligations” under federal law.

“As powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset,” Peirce said.

One of the most closely watched areas of tokenization involves private companies, which aren’t subject to strict financial reporting requirements like publicly traded ones.

Many hot startups are not going public as often as they used to and instead are increasingly relying on wealthy and institutional investors to raise large sums of money and stay private.

That’s unfair to the little guy, say advocates of tokenization.

“These are massive wealth generators for a very small group of rich, well-connected insiders who get access to these deals early,” said Robinhood executive Johann Kerbrat. “Crypto has the power to solve this inequality.”

But Robinhood’s giveaway of tokens meant to represent an investment in OpenAI immediately drew pushback from the company itself, which said it was not involved in Robinhood’s plan and did not endorse it.

“Any transfer of OpenAI equity requires our approval-we did not approve any transfer,” OpenAI said on social media. “Please be careful.”

Public companies have strict public reporting requirements about their financial health that private companies don’t have to produce. Such reporting requirements have helped protect investors and give a legitimacy to the U.S. financial system, said Allen, who said the push for tokenized sales of shares in private companies is “eerily familiar” to how things played out before the creation of the SEC nearly a century ago.

“Where we’re headed is where we were in the 1920s,” she said. “Door-to-door salesmen offering stocks and bonds, half of it had nothing behind it, people losing their life savings betting on stuff they didn’t understand.”

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