Taiwan is home to multiple companies dedicated to the manufacture of technological components. Given the possible effects of the tariffs that Donald Trump announced for Mexico, Canada and China, the government has said that it will assist those companies that wish to move to the United States to avoid being hit by said taxes.

The objective of the Taiwanese government is to facilitate the adaptation of companies to this new scenario, with tariffs on imports, so that their operations are not severely affected.

The announcement states: “In light of the fact that the United States has imposed additional tariffs on Canada, Mexico and other countries, which has affected the overseas operations of some Taiwanese manufacturers, the Ministry of Economic Affairs has initiated a series of response measures.”

The strategy is aimed at making it easier for companies to adjust their supply chains and investment strategies. In this regard, “the Ministry has announced that it will offer customized services to manufacturers for overseas distribution, as well as relevant information on target markets for Taiwanese companies intending to relocate abroad.”

Companies wishing to move to the United States to open factories or transfer production processes to this or another country, including India, will receive information on “state and local investment laws in the United States, as well as opportunities in related markets and assistance in finding partners.”

M.Pino

Source: americaeconomia

(Reference image source: Eric BARBEAU on Unsplash)

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The World Trade Organization (WTO) Goods Trade Barometer reported that the volume of global goods trade has seen a recovery after a recent contraction. This improvement is mainly attributed to the boost generated by the production and sale of automobiles, as well as the dynamism in the trade of electronic components.

Despite these encouraging signs, the near-term outlook is uncertain due to mixed economic performance and rising geopolitical tensions.

The barometer’s current index stands at 100.7 points, surpassing the previous reading of 99.1 points in August and approaching the reference value of 100. According to the WTO, this suggests that the volume of merchandise trade will gradually return to its trend in the medium term in the second half of 2023, as reported by Bloomberg.

Barometer reveals stability in global merchandise trade

The Merchandise Trade Barometer, a leading indicator that provides real-time information on the trajectory of trade in goods, has shown that the volume of global merchandise trade remained stable in the second quarter of 2023, with a slight increase of 0.2 % compared to the previous quarter, although registering a year-on-year decrease of 0.5%.

Third-quarter trade statistics are anticipated to be slightly stronger thanks to GDP growth in the United States and China, although economic stagnation in the European Union continues to affect global demand.

Despite these challenges, the WTO projects strong year-on-year growth in trade during the fourth quarter, driven by the reduction in trade in the same period last year and pandemic-related disruptions.

These forecasts are in line with WTO estimates from October 5, 2023, which predicted a 0.8% increase in global trade volume.

K. Tovar

Source: Bloomberg

(Reference image source: Ian Taylor, Unsplash)

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Amid global turmoil, Latin American stocks are posting their strongest performance compared to other emerging market regions since 2009, thanks to the economic and political stability the region enjoys.

In a recent analysis of benchmark indices from major developing regions, Latin American stocks have hit a 14-year high against emerging Europe, the Middle East and Africa. In addition, they are on track to post consecutive annual gains against Asia, marking a milestone in this period, as reported by Bloomberg.

The key drivers of this rally match those of 2009: a robust US economy and expectations of an accommodative stance from the Federal Reserve. However, it is also attributed to a comparative advantage: while Asia faces challenges due to the Chinese economic slowdown, and the EMEA region grapples with war, debt problems and currency vulnerabilities, Latin America benefits from its position distant from geopolitical tensions. , its proximity to the largest world economy and a greater capacity to implement economic stimuli.

According to Nenad Dinic, equity strategist at Bank Julius Baer & Co. in Zurich, “Latin America currently appears to have an advantage over EMEA heading into 2024, mainly due to its favorable macroeconomic environment and positive market reactions to planned policy changes”. He added that the EMEA stock market remains more vulnerable to geopolitical risks, especially given the potential escalation of conflicts in the region.

Rising Latin American stock index

The MSCI EM Latin America Index, which gives a combined 90% weighting to Brazil and Mexico, has seen an impressive 16% rise so far this year, marking the most significant advance since 2017. Among the main contributors to this rally Petróleo Brasileiro S.A. is located (PETR4), Fomento Economico Mexicano SAB (FEMSAUBD) and Itaú Unibanco Holding S.A. (ITUB4).

Earnings estimates for index members have hit their highest point in a year, and valuations are half what they were three years ago.

According to Dinic, “Brazil began an aggressive cycle of rate cuts, while improved fiscal prospects have bolstered investor confidence.” Additionally, Mexico’s economy has seen significant benefits thanks to the nearshoring trend, where U.S. companies move their production facilities closer to the local market.

In contrast, the EMEA equity index has seen a 0.5% decline in 2023, with South African mining stocks and Middle Eastern banks the biggest drags.

In addition, the region’s currencies are pegged to the US dollar, limiting their ability to recover when the dollar weakens. This diminishes its appeal at a time when yields in countries like Brazil are attracting traders, according to Ashish Chugh, money manager at Loomis Sayles & Co.

K. Tovar

Source: Bancaynegocios

(Referential image source: Unsplash)

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