Economy

The president-elect has said he will use sanctions sparingly while vowing to end the war in Ukraine, renewing questions over their efficacy.Thousands of far-reaching sanctions have been imposed by dozens of countries on Russian banks, businesses and people since Moscow ordered tanks to roll across the border into Ukraine in the winter of 2022.Now, more than 1,000 days later, as President-elect Donald J. Trump prepares to take office, questions about the sanctions’ effectiveness — and future — are expected to come under renewed scrutiny.Mr. Trump has stated, “I want to use sanctions as little as possible.” And he has made clear that there will be a shift in American policy toward Ukraine, having promised to end the war in a single day.Experts believe that sanctions and continued military aid are almost certain to be bargaining chips in any negotiations.So how valuable are the sanction chips that Mr. Trump will hold?The answer is hotly debated.Predictions in the early months of the war that economic restrictions would soon undermine President Vladimir V. Putin’s regime or reduce the ruble to “rubble” did not pan out. Mr. Putin remains entrenched in the Kremlin, and his forces are inflicting punishing damage on Ukraine and gaining on the battlefield.Yet the idea that economic sanctions could bring a quick end to the war was always more a product of hope than a realistic assessment, said Sergei Guriev, a Russian economist who fled the country in 2013 and is now the dean of the London Business School.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Insurers have consistently raised rates in recent years in response to losses from wars and natural catastrophes, and due to inflationary pressures.This has made them profitable, which has encouraged additional players into the market, pushing down prices.Reinsurance rates also fell on Jan. 1, the industry’s preferred policy renewal date, with global property catastrophe reinsurance rates down by 8%, Howden said. Reinsurers insure the insurers, and January reinsurance renewals typically set the trend for the following year’s insurance rates.”Our clients are beginning to see relief from the pricing pressures of the last three years,” said Tim Ronda, chief executive of Howden Re, Howden’s reinsurance business.Global property catastrophe reinsurance rates fell 5% to 15%on Jan. 1 for insurers’ client portfolios that have not suffered losses, reinsurance broker Guy Carpenter, a unit of Marsh McLennan (NYSE:MMC), said this week.However, Howden said this year could be volatile for insurers as they absorb most of the losses from natural catastrophes, such as hurricanes and wildfires themselves, with reinsurers continuing to limit the amount of cover they provide. More

Apple (NASDAQ:AAPL) is offering discounts on its latest iPhone models in China, a rare move that points to rising competition from domestic rivals in the world’s largest smartphone market.The promotion runs from Jan. 4-7, according to the company’s website, and applies to several iPhone models.Apple is grappling with declining market share in the important Chinese market, with competition from local manufacturers becoming more intense.Huawei has emerged as a particularly strong challenger, and it cut the prices of a variety of high-end devices, including mobile phones, over the weekend on one of China’s leading e-commerce platforms.Apple briefly fell out of China’s top five smartphone vendors in the second quarter of 2024 before recovering in the third quarter. That said, its smartphone sales in China still slipped 0.3% during the third quarter from a year earlier, while Huawei’s sales surged 42%, according to research firm IDC.US stock futures rose Thursday, as 2025 started with positive momentum following strong gains in the previous year. By 03:50 ET (08:50 GMT), the Dow futures contract was up 140 points, or 0.3%, S&P 500 futures climbed 30 points, or 0.5%, and Nasdaq 100 futures rose by 140 points, or 0.7%.The major averages handed back some gains in the final days of 2024, but still ended with solid returns. The S&P 500 surged 23% last year, the 30-stock Dow Jones Industrial Average added nearly 13%, and the tech-heavy Nasdaq Composite outperformed with a 29% advance.The US stock markets could struggle to continue posting such strong gains in 2025 given the Federal Reserve has signaled a more cautious stance to cutting interest rates.The holiday-shortened week has been light on economic data, but Thursday will bring a look at weekly jobless claims as well as the S&P Global manufacturing PMI data for December, ahead of next week’s monthly official jobs report.Chinese manufacturing activity grew in December, but at a slower than expected rate, suggesting recent stimulus measures are struggling to boost the second largest economy in the world. The Caixin manufacturing PMI grew 50.5 in December, compared to expectations of 51.6 and the prior month’s reading of 51.5. The private survey comes just days after government PMI data also showed the manufacturing sector expanded in December, but at a slightly slower than expected pace.The Caixin reading differs from the official reading in its scope, wherein the government survey focuses more on larger, state-run enterprises in the north, while the Caixin data covers smaller private companies in the south. Investors usually use both readings to gain a broader picture of the Chinese economy. Beijing has doled out a slew of stimulus measures since late-September, but is still expected to announce more hefty measures in 2025 in the face of increased trade headwinds as Donald Trump returns to the White House.Trump has vowed to impose steep trade tariffs on China, which could bode poorly for the world’s second-largest economy as it struggles to shore up growth. UK house prices rose in December, according to mortgage lender Nationwide, as the country’s property market upswing continued.House prices jumped by 0.7% in monthly terms during December, following a 1.2% increase in November, Nationwide said. The resilience of the UK housing market has surprised many given indications of weakening activity across the wider economy, with prices ending the year 4.7% higher than their level of December 2023, up from 3.7% in November – the highest annual growth rate since late 2022.”Mortgage market activity and house prices proved surprisingly resilient in 2024 given the ongoing affordability challenges facing potential buyers,” said Robert Gardner, chief economist at Nationwide.Crude prices edged higher Thursday, helped by declining US oil inventories while traders cautiously eyed an economic recovery in China, the largest importer in the world.By 03:50 ET, the US crude futures (WTI) climbed 0.4% to $71.98 a barrel, while the Brent contract rose 0.3% to $74.87 a barrel.China’s Xi Jinping said on Tuesday in his New Year’s address that the country would implement more proactive policies to promote growth in 2025.China’s factory activity grew in December, according to the private-sector Caixin/S&P Global survey on Thursday, but at a slower than expected pace. This echoed Tuesday’s official survey, and suggested policy stimulus is gradually trickling into the second largest economy in the world.The American Petroleum Institute reported on Tuesday that US oil inventories fell by 1.4 million barrels last week.Official data from the Energy Information Administration is due later on Thursday, and a drop in US oil inventories tends to indicate an increase in demand for crude oil. More

The companies on the list include General Dynamics (NYSE:GD), Boeing (NYSE:BA) Defense, Space & Security, Lockheed Martin (NYSE:LMT) and Raytheon (NYSE:RTN) Missiles & Defense.China is also banning the export of dual-use items to these companies starting on Thursday, the ministry said. More

(Reuters) -Oil prices are likely to be constrained near $70 a barrel in 2025 as weak demand from China and rising global supplies are expected to cast a shadow on OPEC+-led efforts to shore up the market, a Reuters monthly poll showed on Tuesday.The survey of 31 economists and analysts predicted that Brent crude would average $74.33 per barrel in 2025, down from a forecast of $74.53 in November, marking an eighth straight downward revision.The global benchmark Brent crude has averaged around $80 a barrel so far this year and was poised for a 3% yearly decline on weakening demand stemming from top importer China.U.S. crude is projected to average $70.86 per barrel in 2025, compared with last month’s expectation of $70.69.”Rising production from non-OPEC countries is expected to keep the market well-supplied. While an economic recovery in China is anticipated, the shift to electric vehicles is likely to limit demand growth,” Sehul Bhatt, director of research at CRISIL (NS:CRSL), said.Most of the poll respondents expect the oil market to be in a surplus next year, with analysts from JPMorgan predicting that supply will outpace demand to the tune of 1.2 million barrels per day (bpd).OPEC+, which pumps about half the world’s oil, at its December meeting pushed back the start of oil output rises by three months until April 2025 and extended the full unwinding of cuts by a year until the end of 2026.”The decision was driven by the expectation that non-OPEC+ supply growth will outpace demand growth in 2025. This leaves limited room for OPEC+ to raise production… we anticipate a further delay in unwinding of cuts until Q4 2025,” said Florian Grunberger, senior analyst at data and analytics firm Kpler.Global oil demand was seen growing between 0.4 million and 1.3 million bpd in 2025, the poll showed. That compares with OPEC’s 2025 growth estimate of 1.45 million bpd.Markets are also bracing for substantial policy shifts, encompassing tariffs, deregulation, and tax amendments as Donald Trump is set to return to the White House in January 2025.”In general, we think U.S. politics matter less than many believe when it comes to the impact on oil prices and the U.S. domestic oil & gas sector,” said Kim Fustier, head of European oil & gas research at HSBC.However, implementation of intensified sanctions on Iranian oil exports by the Trump administration could offer support to oil prices in the short term, some analysts noted. More

An air of caution lingered over markets on Thursday as Donald Trump’s impending return to the White House – and his plans for hefty import tariffs, tax cuts and immigration restrictions – set the tone for the new year.With just over two weeks until the U.S. President-elect’s Jan. 20 inauguration, investors were bracing for unpredictability in Trump’s economic agenda and what that would mean for the global economy.That uncertainty left shares in Asia vulnerable to a selloff on Thursday, though those in Europe looked set to fare better with futures pointing to a positive open.Chinese stocks in particular fell heavily, as did the yuan which weakened to its lowest level against the U.S. dollar in almost 14 months.Trump’s talk of tariffs in excess of 60% on imports of Chinese goods has coincided with central government pledges of proactive policies to promote growth this year, muddying the outlook for an economy that has struggled for momentum.China and other Asian factory powerhouses ended 2024 on a soft note, data on Thursday showed, as expectations for the new year were tainted by growing trade risk from a second Trump presidency and persistently weak Chinese demand.Also plaguing investors was concern that Trump’s administration would run the U.S. economy red hot again, with policies market watchers expect will stoke inflation and add to government debt, limiting the scope for the Federal Reserve to ease interest rates.Markets now price in about 42 basis points worth of Fed cuts this year, which is likely to keep the dollar strongly supported well into 2025.In Europe, market focus will likely be on energy shares after Russian gas exports via Soviet-era pipelines running through Ukraine stopped on New Year’s Day, ending decades of Russian dominance over European energy markets.Still, the impact is likely to be muted given the long-scheduled stoppage will have limited influence on prices in the European Union – unlike in 2022, when falling Russian supplies sent prices to record highs, worsened a cost-of-living crisis and hit the bloc’s competitiveness.Key developments that could influence markets on Thursday: – UK nationwide house prices (December)- France, Germany HCOB manufacturing PMI (December)- U.S. weekly jobless claims (By Rae Wee; Editing by Christopher Cushing) More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldDonald Trump’s vision to reshape the world’s largest economy through protectionist policies that put “America First” will damage growth, according to Financial Times economists’ polls that contrast with investors’ bullishness over the US president-elect’s plans. Surveys of more than 220 economists in the US, UK and Eurozone on the economic impact of Trump’s return to the White House showed most respondents believed his protectionist shift would overshadow the benefits of other elements of what the president-elect has dubbed “Maganomics”. Many economists in the US, who were polled jointly by the FT and the University of Chicago’s Booth School of Business, also believe a new Trump term will spur inflation and lead to more caution from the Federal Reserve on cutting interest rates. “Trump’s policies can bring some growth in the short term, but this will be at the expense of a global slowdown which then will come back and hurt the US later on,” said Şebnem Kalemli-Özcan, a professor at Brown University who also sits on the New York Fed’s economic advisory panel. “His policies are also inflationary, both in the US and the rest of the world, hence we will be moving to a stagflationary world.”Some content could not load. Check your internet connection or browser settings.However, most economists — including at the IMF, the OECD and the European Commission — forecast stronger growth in the US than in Europe in 2025. The US economy has consistently outgrown its counterparts across the Atlantic since the coronavirus pandemic, expanding at an annualised rate of 2.8 per cent in the third quarter of last year.Trump has yet to lay out a comprehensive economic policy prospectus, leaving analysts to base their outlooks on pledges and threats made on the campaign trail. Those include plans to impose blanket tariffs of up to 20 per cent on all US imports, mass deportations of undocumented workers, slashing red tape and making tax cuts introduced in 2017 permanent. Trump, a self-described “tariff man”, has a long-standing and deep-rooted belief that the US needs to close its trade deficit and boost homegrown production. “The announced policies include substantial tariffs and deportations of immigrant workers,” said Janice Eberly, a former Obama administration senior US Treasury official now at Northwestern University. “Both tend to be inflationary and likely negative for growth.” Overall, more than half of the 47 economists polled specifically on the US economy expect “some negative impact” from the Trump agenda, and another tenth forecast a “large negative impact”. On the other hand, a fifth of those surveyed expect a positive impact. The gloom among economists contrasts with investors’ optimism over Trump’s second term. The US S&P equity index surged in the weeks following Trump’s win, though it pared some of those gains in December after US rate-setters signalled they would make fewer rate cuts this year than previously anticipated. In its best two-year run this century, the benchmark index ended 2024 up 23.3 per cent, following a similar gain in 2023.Benjamin Bowler, a Bank of America strategist, said this week that Trump’s “laissez-faire economics, tax cuts and deregulation”, coupled with a potential “AI revolution”, meant the rally was likely to continue into 2025.A separate survey by the FT showed that Eurozone economists were even more pessimistic about the impact of Trump policies in their region than those in the US, with 13 per cent of analysts saying they expected a large negative effect and another 72 per cent forecasting some negative repercussions.For the Eurozone the main concern is about manufacturing production, especially in Germany, the region’s biggest economy. Martin Wolburg, senior economist at Generali Investments, highlighted the possibility of the country’s car industry being “especially targeted” by Trump. Trump’s threat of a 60 per cent levy on China “could further challenge European industries,” said Christophe Boucher, chief investment officer at ABN Amro Investment Solutions, as it would raise the prospect of Beijing flooding the region with cheap products. While the UK is seen as better insulated from tariffs, thanks to its large services sector, Alpesh Paleja, lead economist at the CBI, warned that the country would be exposed to the “second-round impact” should tariffs weigh on Eurozone growth. In the UK, more than 56 per cent of almost 100 respondents expected some negative impact, with many speaking of the drag on sentiment from the prevailing climate of uncertainty ahead of Trump’s inauguration on January 20. Just over 10 per cent forecast some positive impact. “The Trump administration will be an ‘unpredictability machine’ which will dissuade business and households from taking long-term decisions with ease,” said Barret Kupelian, chief economist at PwC UK. “This will inevitably have an economic cost.” More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The rerouting of global trade from China to ports elsewhere in Asia is leading shipowners to move on from the era of ordering ever-larger vessels and switch to smaller crafts instead.Just six container ships capable of carrying the equivalent of more than 17,000 20-foot containers, known in industry parlance as TEUs, are due to be delivered in 2025, against 17 delivered in 2020, according to shipbroker Braemar.At the same time, 83 mid-sized vessels measuring between 12,000 TEUs and 16,999 TEUs are set to be completed in 2025, almost five times the number five years earlier.“The 16,000-TEU ship will become the popular workhorse for liner companies,” said Jonathan Roach, container market analyst at Braemar, who added that “tepid” global trade and a saturation of “massive ships” had also reduced the appetite for these vessels.The threat of environmental regulations and trade disruptions — including last year’s attacks on ships in the Red Sea — have also hit demand for the bulkiest carriers, said industry insiders.That disruption is expected to continue with Donald Trump’s return to the White House this month. The incoming president has threatened to turbocharge tariffs on imports from China.“We definitely see increased interest away from sourcing only your products from China,” said Peter Sand, chief analyst at shipping market tracker Xeneta, who added that supply chains were spreading to smaller manufacturing hubs elsewhere in Asia.Sand added: “You can only make economic sense out of ships [of the largest] size if you have got the cargo to fill that up. If you don’t, you are losing money.”A senior executive at one of Asia’s biggest container shipping lines echoed Sand’s remarks. With manufacturing shifting to India and Vietnam, “it probably makes less sense to expect the largest vessels [to be] filled up in two or three ports”, he said.The shift follows decades of shipowners ordering ever-larger vessels as global trade boomed — a trend that came to widespread attention when the 220,000-tonne, 20,000-TEU Ever Given ship ran aground and blocked the Suez Canal for six days in 2021.Tugboats push the Ever Given container ship in the Suez Canal More