Macro Mondays Is Trump’s Plan Working?
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May 5, 2025 The hosts dive into the evolving trade relations between the U.S. and China, highlighting a recent surge in Chinese purchases of U.S. Treasuries. They delve into the fluctuation of the New Taiwan dollar and the surprising positive ISM services report. A bold proposal for hefty tariffs on foreign films sparks a discussion on its impact on digital content and streaming giants. Additionally, the show assesses the implications of currency dynamics amid a weaker dollar and explores global monetary policy's influence on market sentiment.
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US Economy Defies Tariff Fears
- ISM reports surprised positively, suggesting the US economy is not as deteriorated as expected given tariffs.
- This fuels the idea that the economic bottom might already be in place.
Tariffs Extend to Foreign Movies
- Trump proposes 100% tariffs on foreign-produced movies, marking a rare move to tax services crossing borders.
- The US has a trade surplus in services, so this move is unusual and could trigger retaliation from Europe.
Taiwan Dollar Surge and US Dollar Weakness
- The Taiwanese dollar unexpectedly surged against the US dollar, likely due to local institutions hedging dollar exposure.
- This move supports the theory that the US is orchestrating a coordinated dollar weakening to pressure China.