President Trump recently revoked an order mandating that 50% of cars be electric by 2030, stirring a debate in the automotive and energy sectors. In an unexpected move, he also halted the distribution of $5 billion in subsidies meant for charging stations. These decisions have sparked concerns about the future of electric vehicles (EVs) in the United States.
The US currently faces challenges with battery technology, relying heavily on imports from China. This dependency complicates the trade landscape, especially amid ongoing tariff uncertainties. Analysts suggest that these uncertainties could hinder potential interest rate cuts by the Federal Reserve.
The labor market shows signs of cooling, which the Federal Reserve might use to justify a potential rate cut in March. The US private sector saw a job creation of 183,000 in January, indicating a slowdown in employment growth. Meanwhile, the EUR/USD remained within a consolidative range above the key 1.0400 barrier on Wednesday.
Prominent publications have weighed in on Trump's policies. The New York Times' Thomas Friedman criticized these policies as catastrophic for US car manufacturers like Ford. The Wall Street Journal echoed similar sentiments, describing Trump’s actions as "dumb."
In the financial markets, Bitcoin's value hovered around $97,000 on Wednesday after experiencing a 3.5% drop the previous day. Meanwhile, the US Dollar remains weak, and gold prices reached all-time highs near the $2,880 mark.
The Briefing, a publication with a legacy of over 25 years, highlighted Trump's belief that his stance on Taiwan is a strategic advantage in negotiations with China. However, China has diversified its export destinations and possesses robust bargaining tools. These include re-sourcing agricultural imports and maintaining a stronghold in high-tech industries.
China appears to be gaining the upper hand in the trade war, having already emerged victorious in the EV auto sector. This development raises questions about the US's competitiveness in this crucial industry.