(Reuters) – U.S. President-elect Donald Trump has expressed a keen interest in privatizing the U.S. Postal Service in recent weeks, the Washington Post reported on Saturday, citing three people with knowledge of the matter. Trump, who takes office on Jan. 20, has discussed his desire to privatize the Postal Service with Howard Lutnick, his pick for commerce secretary, at Mar-a-Lago, the report said. More
ACCRA (Reuters) – Ghana’s President-elect John Dramani Mahama has said he will not abandon the country’s $3 billion rescue package with the International Monetary Fund, but wants to review the deal to tackle wasteful state spending and upgrade the energy sector.Mahama, a former president who won the Dec. 7 election by a wide margin, told Reuters late on Friday he would also seek to tackle inflation and currency depreciation to mitigate a cost-of-living crisis in the West African nation.Mahama had said previously that he would renegotiate the IMF programme secured by the government of outgoing President Nana Akufo in 2023.”When I talk about renegotiation, I don’t mean we’re jettisoning the programme,” Mahama said.”We’re bound by it but what we’re saying is within the programme, it should be possible to make some adjustments to suit reality.”Ghana’s electoral commission declared Mahama, who was in office from 2012-16, winner of the presidential poll with 56.55% of the vote.The president-elect of the world’s number two cocoa producer inherits a nation emerging from its worst economic crisis in a generation, with turmoil in its vital cocoa and gold industries.FOCUS ON SPENDING, ENERGYThe IMF deal helped to halve inflation and returned the economy to growth, but Mahama said more work was needed to ease economic hardship.”The economic situation is dire … and I’m going to put my soul, physique and everything into it and focus on making lives better for Ghanaians,” said Mahama, whose National Democratic Congress party also won comfortably in a parliamentary vote held on Dec. 7.He said the “multiplicity of taxes” agreed to as part of the IMF programme had made Ghana “unpleasant for business”.”We also think that (the IMF) have not put enough pressure on the government to cut wasteful expenditures,” he said, adding a review would aim to reduce spending, including by the president’s office.”If the president is asking us to tighten our belt, he must also tighten his,” he said.Mahama said the IMF had agreed to send an early mission to conduct a regular review, adding discussions would focus on “how to smoothen out the debt restructuring” that is now in its final lap.He said a revised IMF deal would also seek sustainable solutions to the energy problems to avoid sustained power outages.”We’re going to face quite a critical situation in the energy sector. The electricity company of Ghana is the ‘sick man’ of the whole value chain and we need to quickly fix it,” Mahama said. More
In a recent note, Deutsche Bank (ETR:DBKGn) strategists have discussed the potential implications of Lighthizer’s absence, placing it within the broader context of Trump’s recent statements on tariffs.First of all, despite Lighthizer’s likely absence, tariffs remain “likely,” Deutsche strategists note, with President-elect Trump reiterating his belief in their effectiveness in a recent NBC interview.Trump has threatened to increase tariffs on key trade partners, including Mexico, Canada, China, and the BRIC nations. Jamieson Greer, Trump’s pick for U.S. Trade Representative, and Peter Navarro, appointed as a Senior Counselor for Trade and Manufacturing, are both seen as proponents of stringent trade policies.“We therefore continue to anticipate that more tariffs are coming, with or without Lighthizer,” strategists led by Matthew Luzzetti said in a note.Still, the composition of Trump’s economic team suggests a nuanced approach to tariffs. Treasury Secretary nominee Scott Bessent has advocated for a strategic application of tariffs, while Commerce Secretary nominee Howard Lutnick views them as a “bargaining chip” to lower trade barriers for U.S. exports.“Thus, while tariffs may be coming, there will be voices in the room that will act as meaningful counterweights to hawkish inclinations on trade. We would view the universal baseline tariff as most at risk here,” strategists noted.The absence of Lighthizer might be interpreted by markets and trade partners as a softening of the U.S. trade policy. According to Deutsche Bank, “Trump is unlikely to want to send that signal.”To maintain a firm stance, strategists said Trump may increase the rhetoric around tariffs to emphasize their importance in his administration’s agenda. The recent threats of heightened tariffs on Canada, Mexico, and the BRIC countries serve as examples of this approach.Without Lighthizer’s maximalist tariff strategy, strategists believe the economic outlook could see some benefits.A less aggressive tariff policy from the outset might reduce the risk of a significant supply shock to the economy. Consequently, the bank sees an improved distribution of growth and inflation outcomes, albeit marginally. More
UBS analysts categorize the progression into distinct stages that are likely to unfold throughout 2025, starting with what they term the “tweet phase,” escalating to the “imposition phase,” and eventually transitioning into the “impact phase.”The “tweet phase,” according to UBS, is already underway, characterized by public declarations and demands through social media. These early-stage announcements often serve to define negotiating positions and apply pressure on trade partners even before official actions are undertaken.The “imposition phase” is expected to commence in the first quarter of 2025. During this stage, legal groundwork will be laid for imposing tariffs, requiring procedural steps, public commentary, and time for drafting measures that can withstand legal scrutiny. UBS anticipates that while some preparatory work may already be underway, the timeline for this phase will depend on administrative priorities and the need for meticulous implementation.Following the imposition, the “impact phase” is projected to begin from the second quarter onward. UBS notes that businesses, aware of the risks, are likely to engage in stockpiling and inventory management to mitigate short-term disruptions. However, the broader economic effects, such as reduced trade volumes and slowed growth, could manifest even before corporate earnings reflect the full brunt of tariff-related costs.A parallel “negotiation phase” is expected to persist throughout the year. UBS highlights the likelihood of ongoing talks between trade partners aimed at either defusing tensions or responding with retaliatory measures. For instance, recent moves by China to restrict exports of critical metals in response to U.S. actions underline how trade policies may remain highly transactional and subject to abrupt shifts.Despite the uncertainty, UBS analysts also emphasize that the response from global markets and trade partners could significantly shape the trajectory of this conflict. They cite President-elect Donald Trump’s threats to impose 100% tariffs on BRICS countries unless specific conditions are met, a move they deem unlikely to materialize but indicative of the heightened rhetoric surrounding trade policy.In addition to the timeline, UBS provides insight into the potential economic implications of new tariffs. Emerging market currencies, particularly the Chinese yuan, are expected to experience increased volatility and pressure as a result of reduced trade volumes and investor risk aversion. The yuan could face additional stress, similar to patterns observed during prior trade tensions, though interventions by China’s central bank are likely to provide some level of stabilization.The note also examines how these dynamics intersect with broader economic policies, including the Federal Reserve’s rate-cutting strategy and the impact on the U.S. Treasury yields. UBS warns that more extensive tariffs could risk stagflation—a toxic mix of high inflation and low growth—though their baseline scenario suggests moderate inflationary effects. More
BCA expects the U.S. Congress to pass tax cuts by the end of 2025, contributing a fiscal thrust of approximately 0.9% of GDP in 2026. This move aims to stimulate the domestic economy but will coincide with President Trump initiating a global trade war. Central to this conflict will be tariffs targeting major trade partners, with China bearing the brunt of these measures.”Trump claims that higher taxes on imports will cover the difference,” BCA notes, but it highlights that such tariffs could have unintended consequences.Higher import taxes may lead to a 2.9%-6.3% decline in household incomes, offsetting the benefits of tax cuts. Furthermore, the uncertainty created by these trade policies could weigh heavily on business investment, particularly in sectors reliant on global supply chains.The report underscores that tariffs are unlikely to fully fund the ambitious tax overhaul. Instead, BCA anticipates increased fiscal deficits and heightened pressure on domestic consumers and businesses.In response to U.S. tariffs, China is expected to counter with significant domestic stimulus measures while strengthening its trade ties outside the U.S. According to BCA, “Xi Jinping will be able to blame Trump for the painful consequences of restructuring at home,” using external pressures to justify economic reforms and solidify domestic support.Beijing’s strategy will likely include targeted fiscal easing and efforts to reduce reliance on American demand. While these measures are expected to provide short-term relief, BCA suggests that China will hold back on deploying its “fiscal bazooka,” reserving significant stimulus for a potential global recession. Instead, China will focus on long-term strategies, such as expanding trade with non-U.S. partners and bolstering its manufacturing sector.Simultaneously, the report highlights an uptick in China’s military and strategic activities, including potential conflicts in East Asia and increased pressure on Taiwan. These moves are part of a broader strategy to assert geopolitical influence amid heightened global tensions.“Investors cannot predict random military incidents or base their portfolios on them – but they can set up early warning systems to detect if a negative trend starts to develop,” BCA notes.Lastly, while the Ukraine war is expected to peak and move toward a ceasefire in 2025, BCA anticipates that geopolitical risks will shift to the Middle East, particularly the escalating conflict between Israel and Iran. The report estimates a 75% likelihood of military escalation, driven by Iran’s nuclear ambitions and the fallout from U.S. sanctions.BCA points to a deteriorating security landscape in the region, with Iran likely to leverage its proxy networks and air defense systems to deter attacks. However, Israel, seeing a rare strategic opportunity, may act decisively to set back Iran’s nuclear program. “The Israeli Defense Forces may never get a better chance,” the report states.Trump’s return to office could further inflame tensions. His administration’s enforcement of “maximum pressure” sanctions and potential realignment of U.S. foreign policy are expected to exacerbate volatility in the region. More
China said this week it will raise the budget deficit, issue more debt and loosen monetary policy to maintain a stable economic growth rate.The People’s Bank of China has steadily reduced interest rates and injected liquidity this year as the authorities have made efforts to hit a official economic growth target of around 5%.Interest rates should be strengthened to facilitate transmission and guide the comprehensive social financing costs to a steady decline, PBOC research bureau director Wang Xin said in remarks about specific considerations for China’s next phase of monetary policy implementation.”As the PBOC’s exploration of buying and selling government bonds in the secondary market becomes more mature, the central bank should in the future use a variety of monetary policy tools to provide sufficient medium and long-term liquidity and maintain adequate liquidity in the banking system,” Wang said at an economic conference.(This story has been refiled to say cut, not cuts, in the headline and to remove extraneous words in paragraph 1) More
Analysts at Wells Fargo (NYSE:WFC) emphasize that while developed nations like the United States continue to consume substantial energy resources, the real momentum in energy demand growth is firmly rooted in emerging markets.In recent years, nearly all the incremental increases in global petroleum demand have originated from these economies. For example, in 2023, emerging markets accounted for 94% of the growth in daily petroleum consumption, illustrating their outsized contribution to the global energy landscape. Countries like China and India lead this surge. China has been a consistent force in energy consumption, while India has nearly doubled its energy use over the past 15 years.Despite this rapid growth, emerging economies still lag behind developed nations in per capita energy consumption. This gap signifies not only their potential for continued growth but also the possibility of sustained demand over the coming decades as they strive to match the consumption patterns of high-income countries. Such trends show the structural shift in global energy demand, where emerging markets are not merely catching up but are reshaping the contours of energy consumption.Wells Fargo analysts note that this trajectory is unlikely to wane soon, as millions in these economies seek to elevate their living standards, which correlates directly with higher energy usage. This steady rise underscores the long-term prospects for energy producers and markets to focus on these burgeoning economies as the primary hubs of future demand.As emerging markets continue to drive this transformation, the global energy sector must adapt to meet their specific needs and consumption patterns. This shift has far-reaching implications for energy investments, infrastructure development, and geopolitical dynamics, ensuring that emerging economies will remain central to discussions about energy demand and sustainability for decades to come. More
At the same time, 3.24 million housing units have been delivered in China, significantly improving market expectations, according to Dong.China’s local governments began compiling a “whitelist” of housing projects for loans earlier this year, giving troubled developers a lifeline to obtain funding for a sector that has beset the economy with stuttering growth.($1 = 7.2756 Chinese yuan) More
