Business
From fortress to fallout: Trump’s trade moves shake dollar confidence
But even if it does prove short-lived, any erosion of the dollar’s standing as a safe-haven is bad news for investors.”The U.S., almost overnight, it seems to have lost its safe-haven attributes,” said Ray Attrill, head of FX strategy at National Australia Bank.In just a week, the dollar has gone from a safe haven to investors’ whipping boy as U.S. President Donald Trump’s chaotic tariffs on friend and foe alike undermine decades of trust in the world’s reserve currency.To be sure, some believe the dollar selloff could be temporary.”The whole premise of the dollar as a reserve currency is being challenged, effectively, by what we’ve seen since Trump’s election,” said Attrill.”By losing or diminishing credibility as a financial safe haven, the willingness of creditors to lend money to the U.S. is reduced,” he said.For those who have piled trillions of dollars into buoyant U.S. markets in recent decades, a sharp dollar fall could result in higher interest rates for longer as price pressures at home persist, which is bad for bonds and equities.But Trump’s recent moves on trade have shaken perceptions. In a matter of days he has imposed hefty tariffs on the world, made an abrupt U-turn on his decision and intensified a trade war with China, throwing into question the reliability of the U.S. administration.”There is … a loss of confidence to some extent … you’re overlaying that with the loss of exceptionalism and the view that in the short-term, at least, it’s the U.S. economy that’s going to be suffering more than any other from what’s happening on the tariff front.”Things are so bad that the U.S. now has to pay investors more to borrow their money than Italy, Spain or Greece.The sudden loss of confidence was nowhere more stark than in the Treasury market, which saw the largest weekly increase in borrowing costs since 1982 as offshore funds fled.Published on April 11, 2025 It was the establishment of the Bretton Woods system in 1944 that cemented the greenback’s global standing. Post-war planners devised a system built on exchange rate stability and deepening international trade and the dollar remained dominant even after Bretton Woods broke down in the early 1970s.”Regardless of how the next 90 days evolve, the U.S.’s international reputation has been eroded,” ANZ group chief economist Richard Yetsenga said in a note.”Once the uncertainty is more or less gone, the tariff rates are set, there’s no back and forth, we’ll see the dollar getting stronger again because the eventuality is that the tariffs are set in place and this is the new normal,” said Francis Tan, chief strategist for Asia at Indosuez Wealth Management.Martin Whetton, head of financial markets strategy at Westpac, said this week’s massive shift in U.S. dollar swap spreads, the “sharp flash-crash” move higher in U.S. Treasury yields and the heavy selloff in the dollar showed “a stripping away of the shield of liquidity and safety”.The dollar, already on course for its worst year since 2017 , on Friday plunged to a decade-low against the Swiss franc and dropped to its weakest level against the euro in more than three years.Foreigners owned trillion of U.S. debt and stocks at the end of 2024.
“The Trump administration’s ambitious agenda to reform the international financial system seems almost oblivious to the reality of America’s extreme dependence on foreign capital as reflected in its net international investment position,” said Chris Wood, global head of equity strategy at Jefferies, in a note.
Stocks globally have shed trillions of dollars and world markets have gone into a tailspin. Published on April 11, 2025 “By losing or diminishing credibility as a financial safe haven, the willingness of creditors to lend money to the U.S. is reduced,” he said. Foreigners owned trillion of U.S. debt and stocks at the end of 2024.
“Regardless of how the next 90 days evolve, the U.S.’s international reputation has been eroded,” ANZ group chief economist Richard Yetsenga said in a note.”The U.S., almost overnight, it seems to have lost its safe-haven attributes,” said Ray Attrill, head of FX strategy at National Australia Bank. But Trump’s recent moves on trade have shaken perceptions. In a matter of days he has imposed hefty tariffs on the world, made an abrupt U-turn on his decision and intensified a trade war with China, throwing into question the reliability of the U.S. administration.
Martin Whetton, head of financial markets strategy at Westpac, said this week’s massive shift in U.S. dollar swap spreads, the “sharp flash-crash” move higher in U.S. Treasury yields and the heavy selloff in the dollar showed “a stripping away of the shield of liquidity and safety”.”There is … a loss of confidence to some extent … you’re overlaying that with the loss of exceptionalism and the view that in the short-term, at least, it’s the U.S. economy that’s going to be suffering more than any other from what’s happening on the tariff front.”Things are so bad that the U.S. now has to pay investors more to borrow their money than Italy, Spain or Greece.In just a week, the dollar has gone from a safe haven to investors’ whipping boy as U.S. President Donald Trump‘s chaotic tariffs on friend and foe alike undermine decades of trust in the world’s reserve currency.
“Once the uncertainty is more or less gone, the tariff rates are set, there’s no back and forth, we’ll see the dollar getting stronger again because the eventuality is that the tariffs are set in place and this is the new normal,” said Francis Tan, chief strategist for Asia at Indosuez Wealth Management.It was the establishment of the Bretton Woods system in 1944 that cemented the greenback’s global standing. Post-war planners devised a system built on exchange rate stability and deepening international trade and the dollar remained dominant even after Bretton Woods broke down in the early 1970s.To be sure, some believe the dollar selloff could be temporary.
“The global economy is in a weaker position than it was before the tariffs. “The sudden loss of confidence was nowhere more stark than in the Treasury market, which saw the largest weekly increase in borrowing costs since 1982 as offshore funds fled.”The whole premise of the dollar as a reserve currency is being challenged, effectively, by what we’ve seen since Trump’s election,” said Attrill. For those who have piled trillions of dollars into buoyant U.S. markets in recent decades, a sharp dollar fall could result in higher interest rates for longer as price pressures at home persist, which is bad for bonds and equities.But even if it does prove short-lived, any erosion of the dollar’s standing as a safe-haven is bad news for investors.The dollar, already on course for its worst year since 2017 , on Friday plunged to a decade-low against the Swiss franc and dropped to its weakest level against the euro in more than three years.
Business
Belgium acts on extradition plea, nabs Mehul Choksi
“At the moment, he is in prison and there (Belgium), the procedure is not to apply for bail but file an appeal. During that appeal, request is made that he should not be kept in detention and he should be permitted to defend himself and oppose the extradition request while not being in custody,” Agarwal told reporters. In a significant breakthrough in Rs 13,000 crore Punjab National Bank loan fraud, the Belgian police has arrested absconding diamantaire Mehul Choksi.
Modi has been in a jail in the United Kingdom since 2019 his bail applications repeatedly turned down by courts. The Indian government has been pushing for his extradition, raising it with highest levels in the UK government. Our Bureau & Agencies He said the “obvious” grounds for the appeal would be that Choksi is “not a flight risk, is extremely sick and undergoing treatment for cancer”. The scam had been going since 2011 and came to light when PNB executives demanded full margin money for issuing fresh LOUs. A red flag was raised and inquiry initiated after Choksi and Modi’s companies informed banks of securing LOCs without any collateral.Choksi, who has been on the run for past seven years obtained citizenship of Caribbean nation Antigua in 2019. He came to Belgium a few months ago for medical treatment.
Fraud LOUs
A case was registered against Choksi in February 2018 and chargesheets.
Subsequently in 2022 five more criminal cases were filed against Choksi and others for duping banks and other financial institutions. ED has also attached assets worth Rs 2500 crore as a part of its probe against Choksi.Published on April 14, 2025 Choksi’s lawyer Vijay Agarwal said his client was taken into custody by the Belgian Police on Saturday . The arrest was carried out on the basis of an extradition request made by the Central Bureau of Investigation and the Enforcement Directorate, news agency PTI reported. Choksi took over family-run diamond business and made it a household name with his Gitanjali Gems brand. Choksi and his nephew Nirav Modi who is a co-accused in the case have been charged of using Letters of Undertaking to secure overseas credit for their diamond business. As per Punjab National Bank’s complaint the LOUs were issued fraudulently and in violation of Reserve Bank of India guidelines and were used to obtain credit for shell companies.
The scam had been going since 2011 and came to light when PNB executives demanded full margin money for issuing fresh LOUs. A red flag was raised and inquiry initiated after Choksi and Modi’s companies informed banks of securing LOCs without any collateral.He said the “obvious” grounds for the appeal would be that Choksi is “not a flight risk, is extremely sick and undergoing treatment for cancer”. A case was registered against Choksi in February 2018 and chargesheets. Choksi’s lawyer Vijay Agarwal said his client was taken into custody by the Belgian Police on Saturday .
Subsequently in 2022 five more criminal cases were filed against Choksi and others for duping banks and other financial institutions. ED has also attached assets worth Rs 2500 crore as a part of its probe against Choksi.The arrest was carried out on the basis of an extradition request made by the Central Bureau of Investigation and the Enforcement Directorate, news agency PTI reported.
Modi has been in a jail in the United Kingdom since 2019 his bail applications repeatedly turned down by courts. The Indian government has been pushing for his extradition, raising it with highest levels in the UK government.
Fraud LOUs
Published on April 14, 2025 Our Bureau & Agencies Choksi took over family-run diamond business and made it a household name with his Gitanjali Gems brand. Choksi and his nephew Nirav Modi who is a co-accused in the case have been charged of using Letters of Undertaking to secure overseas credit for their diamond business. As per Punjab National Bank’s complaint the LOUs were issued fraudulently and in violation of Reserve Bank of India guidelines and were used to obtain credit for shell companies. In a significant breakthrough in Rs 13,000 crore Punjab National Bank loan fraud, the Belgian police has arrested absconding diamantaire Mehul Choksi.Choksi, who has been on the run for past seven years obtained citizenship of Caribbean nation Antigua in 2019. He came to Belgium a few months ago for medical treatment. “At the moment, he is in prison and there (Belgium), the procedure is not to apply for bail but file an appeal. During that appeal, request is made that he should not be kept in detention and he should be permitted to defend himself and oppose the extradition request while not being in custody,” Agarwal told reporters.
Business
The dollar is set to maintain its dominance.
But yes, this could hurt. Despite Trump, China also doesn’t enjoy the trust that the US enjoys — which Trump might be destroying. Published on April 13, 2025 And the dollar remained invincible. That’s the point to grasp.To fix the European problem Richard Nixon, a Republican president, went off the gold standard in 1971. By […]
But yes, this could hurt. Despite Trump, China also doesn’t enjoy the trust that the US enjoys — which Trump might be destroying.
Published on April 13, 2025 And the dollar remained invincible. That’s the point to grasp.To fix the European problem Richard Nixon, a Republican president, went off the gold standard in 1971. By the mid-1970s Europe had lost its advantage which it still has not recovered.The only difference is that it was Europe and Japan which were the villains then and it’s China that’s the villain now. Europe exported more to the US between 1950 and 1970 than it imported — it still does — and found itself with a massive cache of dollars, called Eurodollars. Japan between 1970 and 1990 did the same and also accumulated huge reserves.Even in the 1970s, after America had refused to honour its pledge to give a troy ounce of gold for , there had been the same squeals of indignation and forecasts of apocalypse. All that happened was volatility in the financial markets and petrodollars replaced the Eurodollars. That’s when the Middle East became rich.
All things considered China doesn’t have the ‘comprehensive power’ depth that’s needed to take on the US. I think the deal Trump will offer is that the Pacific is yours but that’s all you get. Agree, and I will reduce tariffs to 10 per cent.Donald Trump’s trade policy has drawn two types of comments. One deserves to be rejected and the other requires closer scrutiny.In their place came China as the leading exporter to the US. Like Europe between 1950-70 and Japan between 1955-85 it, too, was facilitated by the US. So the idea that Trump doesn’t want the dollar to be the reserve currency by engineering a trade surplus for America is completely ludicrous. It could and has depreciated. But that’s temporary. By 1992, just as the the Europeans had bitten the dust by 1980, the Japanese economy also went into a stagnant phase. Neither Europe nor Japan have recovered even now.
The comments to be rejected are politically inspired, that he is trying to manipulate the financial markets so that someone can make money.
This is plain silly. His close friend Elon Musk has actually lost more than billion.International economics bloomed. Many papers and books were written. Some economists even won the ‘Nobel’ prize. But when all the commercial and academic dust had settled down, there the dollar was, as the safe haven currency of the world.
The other set of comments is about economics, that Trump is trying to devalue the dollar so that American exports become competitive. The simple answer to this is that a global reserve currency is, by definition, one that requires trade deficits.In 1985, Ronald Reagan, another Republican president, forced two things on Japan. He ‘persuaded’ the Japanese to accept voluntary export restraints to limit the numbers of Japanese food entering the US.
The other thing was known as the Plaza Accord that ‘persuaded’ Japan to revalue its currency vis-a-vis the dollar.We in India, meanwhile, should be wondering, like Kalia in Sholay, what’s going to be our fate. “Ab tera kya hoga, Kaliye”.In the end, the point is this: if you had to choose between America and China, who would you choose? And that’s the trillion dollar question: the Communist Party of China or America?Public memory may be short but I had thought economists would have somewhat longer memories. But apparently not, because they have forgotten what happened in the four decades from 1950 to 1990.The simple truth is this: what’s happening now is a replay of those years, namely, huge American budget and trade deficits accompanied by massive accumulation of dollars outside American control.
US or China?
A legitimate question today is if America has the same leverage with China as it did with Europe and Japan because it provided military security to both. And the obvious answer is no. China is a military adversary.When the US whipped them, Europeans responded by expanding their economic union both in trade and monetarily. The EU and the euro were the result eventually. The Japanese didn’t even try. They just rolled over.It then bit the hand that fed it. So now it is its turn to be hit. But will history repeat itself a third time? We will have to wait and see.What can China do? It has tried RCEP, an Asian trading block. It has tried an Asian infrastructure investment bank. It has tried to promote the yuan as the global reserve currency, directly and via BRICS. It’s pretending it’s on a par with the US on technology — via memes. It will blackmail the US via its control of rare earths but that control has now reduced.
Business
China Hits Back with 125% Tariffs on US Imports Amid Escalating Trade Tensions
In a bold move, China has raised tariffs on US imports to a staggering 125%, up from 84%, as a direct response to the Trump administration’s recent 145% tariffs on Chinese goods.
In a bold move, China has raised tariffs on US imports to a staggering 125%, up from 84%, as a direct response to the Trump administration’s recent 145% tariffs on Chinese goods. This tit-for-tat escalation, announced on Friday, April 11, 2025, signals a deepening trade war between the world’s two largest economies. The decision has sent ripples through global markets, raising concerns about supply chain disruptions and economic stability.
Why China Imposed Higher Tariffs
The Chinese Commerce Ministry stated that the new tariffs are a countermeasure to what it calls “unilateral bullying” by the US. Alongside the tariff hike, China has taken its grievances to the World Trade Organization (WTO), filing a lawsuit to challenge the US levies. Beijing also expressed openness to dialogue, emphasizing a desire to resolve the trade dispute through negotiations, though tensions remain high.
This latest move follows a series of retaliatory actions. Earlier this week, China imposed 84% tariffs on US goods after President Trump increased duties on Chinese exports to 125%. The back-and-forth reflects a broader struggle for economic dominance, with both nations unwilling to back down.
Impact on Global Trade
The escalating tariffs are already shaking up global markets. Asian and European stock indices dropped as investors grappled with fears of a prolonged trade war. For consumers and businesses, the higher tariffs could mean pricier goods, disrupted supply chains, and potential economic slowdowns. Industries like manufacturing, agriculture, and technology, which rely heavily on US-China trade, are bracing for the fallout.
China’s finance ministry didn’t hold back, criticizing the US tariffs as a violation of international trade rules. “This is a numbers game that will hurt everyone,” a ministry spokesperson remarked, warning of the broader consequences for global commerce.
What’s Next for US-China Relations?
While China has signaled a willingness to talk, the path to resolution looks rocky. The US has paused tariffs on other countries for 90 days to encourage negotiations, but China was excluded from this reprieve. Beijing’s response—doubling down with higher tariffs and legal action—suggests it’s digging in for a long fight.
As the trade war heats up, all eyes are on how both nations will navigate this high-stakes standoff. Will cooler heads prevail, or are we headed for even more economic turbulence? For now, the world watches and waits.
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