1. U.S. Imposes 25% Tariffs on Imported Steel and Aluminum
2. U.S. Immigration Policies May Hinder GDP Growth
3. Musk Seeks Access to Government Financial Data
4. China’s CPI Surpasses Expectations During Spring Festival
5. Shein Encourages Suppliers to Establish Overseas Factories
6. Hedge Funds Turn Bullish on U.S. Stocks After Sell-Off
7. TD Bank Sells $14 Billion Worth of Charles Schwab Shares
1. U.S. Imposes 25% Tariffs on Imported Steel and Aluminum
Last Sunday, former President Donald Trump announced his plan to impose a 25% tariff on all steel and aluminum imports into the U.S. This move could significantly impact trade relations between the U.S. and its major partners.
Additionally, Trump stated that he would introduce counter-tariffs on countries imposing duties on American imports.
Previously, he had announced a 25% tariff on imports from Canada and Mexico but later postponed implementation during negotiations. Similarly, the newly announced tariffs might not be enforced immediately.
The U.S. heavily relies on imports from countries such as Canada, the UAE, and Mexico, with net aluminum imports reaching 80% in 2023.
______
2. U.S. Immigration Policies May Hinder GDP Growth
A study by Goldman Sachs economists suggests that Trump’s immigration restrictions could lead to an annual decline of 750,000 in net migration to the U.S., potentially reducing GDP growth by 0.3% to 0.4%.
Goldman Sachs also noted that changes in immigrant composition are expected. The U.S. will continue admitting new refugees and legal migrants while deporting approximately 500,000 individuals annually, bringing the net inflow of undocumented immigrants to zero.
Analyst Jan Hatzius warned that if immigrants hesitate to seek employment or employers become reluctant to hire them, the economic consequences could be severe.
According to U.S. Census Bureau data, a total of 2.8 million people immigrated to the U.S. last year.
______
3. Musk Seeks Access to Government Financial Data
Sources revealed that next week, Elon Musk’s DOGE (Department of Government Efficiency) team will dispatch a group to the Bureau of Fiscal Service in Parkersburg, West Virginia, to obtain read-only access to the U.S. government’s central accounting system.
The Bureau of Fiscal Service manages the financial data of all government agencies and also processes banking information for the Federal Reserve and other institutions.
Musk, who oversees DOGE, hopes to gain direct access to federal financial systems to identify inefficiencies in government spending.
However, after multiple lawsuits from labor unions and retirement groups, a U.S. federal judge recently denied DOGE’s request for access.
On Saturday, Musk announced that he had reached an agreement with the Treasury Department on how to audit federal transactions.
Source: Bloomberg – Musk’s DOGE Team Now Seeks Access to Treasury’s Accounting Data
______
4. China’s CPI Surpasses Expectations During Spring Festival
China’s National Bureau of Statistics reported on Sunday that the country’s Consumer Price Index (CPI) rose 0.5% year-over-year in January, surpassing December’s 0.1% increase and exceeding economists’ forecast of 0.4%.
In January, service prices increased by 0.9% year-over-year, contributing to more than half of the CPI growth.
Goldman Sachs analysts attributed the CPI increase mainly to rising food and travel-related service costs during the Lunar New Year. However, they noted that inflation might normalize in February as seasonal demand subsides.
Source: Bloomberg – China Consumer Inflation Picks Up as Holiday Boosts Spending
______
5. Shein Encourages Suppliers to Establish Overseas Factories
Insiders revealed that fast fashion giant Shein is encouraging some Chinese garment suppliers to set up new factories in Vietnam and is willing to increase procurement prices by 30% to facilitate the move.
Shein has also offered to assist suppliers in building new factories or transporting fabrics from China to Vietnam if needed.
The company has been discussing this strategy with suppliers for several months, but the initiative has accelerated since Trump’s return to the political scene. Establishing factories outside China could help Shein avoid U.S. import tariffs.
Last year, Shein filed for an IPO in the U.S., with a potential valuation of $90 billion.
Source: Bloomberg – Shein Asks Some Chinese Suppliers to Diversify to Vietnam
______
6. Hedge Funds Turn Bullish on U.S. Stocks After Sell-Off
A new report from Goldman Sachs shows that in the week leading up to February 7, hedge funds purchased U.S. stocks at the fastest pace since November, marking the largest net buying of single stocks in over three years.
Technology stocks were the most heavily bought, with funds covering short positions and increasing long positions, particularly in semiconductor and software sectors.
Recent market turbulence was driven by China’s DeepSeek and Trump’s tariff policies. However, solid corporate earnings reports over the past few weeks have helped stabilize investor confidence.
Goldman Sachs noted that despite high macroeconomic uncertainty, corporate earnings indicate strong business performance.
______
7. TD Bank Sells $14 Billion Worth of Charles Schwab Shares
Bank announced plans to sell 18.47 million common shares of Charles Schwab, valued at $14 billion. Charles Schwab has agreed to repurchase $1.5 billion worth of these shares.
In October last year, TD Bank agreed to pay a $3.1 billion fine to the U.S. Department of Justice for failing to prevent money laundering activities in multiple U.S. bank branches.
After a strategic review, TD Bank decided to restructure its capital allocation and sell its stake in Charles Schwab.
In August last year, TD had already sold $2.5 billion worth of Schwab shares to cover its fines.
______
This report is based on financial news from Financial Times, Bloomberg, he Real Deal, and other media outlets.