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The escalating trade war between the US and China has taken a new turn with China announcing a retaliatory tariff increase to 84% on US goods, following the US's imposition of a 104% tariff on Chinese imports. This move comes after President Trump added a 50% tariff on top of existing duties, bringing the total to 104%. The trade tensions have led to significant market reactions, with companies like Amazon canceling orders from China due to the new tariffs, and Walmart adjusting its profit forecasts due to the uncertainty. Meanwhile, President Trump has remained defiant, encouraging investors to buy the dip in stocks and asserting that countries are keen to negotiate. However, the exact objectives of Trump's trade policy remain unclear, leaving many foreign governments and markets in a state of uncertainty. The situation has also prompted responses from other countries, with Canada announcing new tariffs on certain US vehicles and the EU voting in favor of countermeasures. The ongoing trade disputes are causing companies to raise prices and adjust their strategies, while the global economic implications continue to unfold.
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US Senators Elizabeth Warren and Richard Blumenthal have sent a letter to Meta CEO Mark Zuckerberg, seeking clarity on the company’s potential plans to introduce a stablecoin as the Senate prepares to vote on the GENIUS Act, a bill to regulate payment stablecoins. The lawmakers expressed concerns over Meta’s past failed stablecoin projects, Libra and Diem, and the risk of the company bypassing regulations through a waiver from President Donald Trump. They warned that a Meta-controlled stablecoin could enable extensive consumer data surveillance, fueling intrusive advertising and data monetization. Reports suggest Meta is exploring stablecoin payments on platforms like Facebook and Instagram, though a spokesperson denied plans for a Meta-issued stablecoin. The GENIUS Act advanced in the Senate with bipartisan support, despite Warren’s reservations about Trump’s ties to a family-backed crypto platform.
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The Financial Stability Board (FSB), led by outgoing Chair Klaas Knot, has raised concerns about the growing integration of cryptocurrency with traditional finance (TradFi), warning of a potential "tipping point" for systemic risks. Speaking in Madrid, Knot emphasized the role of stablecoins and crypto ETFs in this convergence. Stablecoins, with a market cap exceeding $251 billion, are increasingly embedded in financial systems, holding large amounts of US Treasurys and impacting short-term Treasury yields, as shown by recent research. Crypto ETFs, meanwhile, simplify retail investor access to digital assets. Knot stressed the need for close monitoring of these developments, despite crypto not yet posing a systemic threat. Additionally, the US Senate advanced the GENIUS Act, a bill to provide regulatory clarity for stablecoins, signaling potential growth for the US digital asset sector. As interlinkages deepen, the FSB underscores the urgency of addressing these evolving financial risks.
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The US has ordered a partial evacuation of its embassy staff in Baghdad and authorized families of military personnel to leave the region due to escalating tensions with Iran over its nuclear program. Iran has threatened to target US military bases in the Middle East if negotiations collapse and it is attacked, with its Defense Minister warning of significant retaliatory losses for the US. Reports also suggest Israel is preparing for a potential operation against Iran, prompting the Trump administration to advise some Americans to depart. President Trump has expressed dwindling confidence in nuclear talks, while Iran is preparing a new proposal for discussions in Muscat. The heightened tensions have broader implications, with the UK Navy issuing warnings about potential military escalation impacting shipping through critical chokepoints like the Strait of Hormuz. Oil markets reacted sharply, with West Texas Intermediate futures rising over 5% amid security concerns. The situation remains fluid, with the US Central Command coordinating with allies to maintain readiness, as geopolitical strife continues to threaten stability in the region.
