Bloomberg Surveillance Single Best Idea with Tom Keene: Bill Lee & Ellen Wald
May 16, 2025
This discussion dives into the current market landscape, highlighting reactions to long-term yields and GDP statistics. Insights on U.S.-Japan trade negotiations, particularly concerning Toyota imports and tariffs, provide a political backdrop. The intricacies of international trade are examined, emphasizing non-tariff barriers and the role of national oil companies like Aramco. Financial dynamics of oil pricing are also explored, alongside mentions of innovative business internet services and AI tools.
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Tariffs vs Non-Tariff Barriers
- Tariffs are less effective on services, especially where licenses are involved, like American banks in China.
- Non-tariff barriers such as legal and quality standards are the major trade obstacles President Trump targets to negotiate.
Diverse Middle Eastern Oil Costs
- Middle Eastern oil industries differ significantly in break-even costs, with Saudi Aramco having the lowest globally.
- Aramco's low break-even price ensures it remains profitable regardless of oil price drops.
Saudi Budget vs Aramco's Costs
- The Saudi government's budget break-even price differs from Aramco's cost since the government doesn't sell oil directly.
- Budget break-even prices are less relevant because Saudi Arabia's government revenue comes from, but does not control, oil sales.
