12 June 2023 – The economy of Japan is growing at an astonishing pace, leaving the other industrialized nations behind. Financial analysts are much more optimistic about the US economy. Mining giant to invest USD 1.5 billion in copper mining. And India would like an exemption from the US Section 232 tariffs on steel and aluminum – but is apparently already biting its teeth in the run-up to the negotiations.
- Japan's economy surges with impressive momentum
- Financial analysts see US economy in more positive position
- Mining giant to invest $1.5bn in copper mine
- Steel and aluminum: Is India biting the dust on US Section 232 exemption?
Japan’s economy surges with impressive momentum
The Japanese economy has experienced remarkable growth, surpassing all expectations. In the first quarter, the country’s gross domestic product (GDP) expanded at a staggering annualized rate of 1.6 percent compared to the previous quarter, as per initial estimates.
Anticipated by analysts at an average of 1.9 percent, the second estimate revealed an even more robust growth of 2.7 percent. This revision was primarily attributed to increased inventories and investments.
Japan’s GDP rose by 8.3 percent
Notably, Japan’s GDP rose by an astounding 8.3 percent in nominal terms. When assessing the potential growth of an economy without overheating in the long run, Japan’s economic momentum far outpaces that of almost any other industrialized nation.
Nikkei 225 on a 33-yeaar high
This impressive performance is also evident in the Japanese stock market, with the Nikkei 225 index surging to a 33-year high. Year to date, the index has gained approximately 25 percent in yen terms and 17.5 percent in euro terms.
Robust and thriving business environment
Looking forward, it is expected that both the economy and the stock market may experience a more moderate pace of development. Nonetheless, Japan’s economic strength and the positive trajectory of its stock market reflect a robust and thriving business environment in the country.
Financial analysts see US economy in more positive position
Goldman Sachs slashed the odds of a U.S. economic downturn within the next year to 25 percent from 35 percent. This is due to factors such as the bipartisan debt ceiling deal, which removes the risk of default, and improved conditions in the regional banking sector. Economic resilience, a strong labour market and solid consumer spending are all contributing to a brighter picture. Goldman Sachs, citing the stabilisation of the housing market and growth in real disposable income as further reasons for confidence, maintains its forecast of 1.8% growth for the US economy in 2023.
Mining giant to invest $1.5bn in copper mine
Mining giant Glencore is to invest $1.5bn in the expansion of its Antapaccay copper mine in Peru, up from the $590m previously announced. The investment is driven by growing demand for copper in the electric vehicle industry. The aim of the expansion is to extend the mine’s life and increase production. In the first decade of operation, Glencore expects the project to produce approximately 250,000 tonnes of copper per year.
The investment reflects growing demand for copper, driven largely by the electric vehicle and renewable energy revolution. This has led already to a supply shortfall.
Expanding mining capacity is a long-term undertaking, but it is also an important sign of the urgent need to invest in mining to meet the massive growth in global demand for raw materials.
Steel and aluminum: Is India biting the dust on US Section 232 exemption?
Indian Prime Minister Narendra Modi will visit the United States from June 21 to 24, 2023. One of the issues to be discussed is the US Section 232 tariffs on steel and aluminum and whether India could be exempted from them.
No exemption for India
But even in the run-up to the Indian prime minister’s visit, the US government’s adamant stance on this request seems to have leaked out. According to Reuters, US sources said to be familiar with the matter have already expressed unequivocal opposition, and the U.S. negotiating team has not even seriously considered the request. Thus, an exemption from the Section 232 tariffs for India is likely out of the question.
Tough stance of the US government
The US. government’s stance is likely based on several issues. At one point, the presidential election campaign has begun in the United States. And the votes from the steel and aluminum industries are weighty for a possible election victory. Moreover, the US government had already granted exemptions to some close allies (EU27, UK, Japan, Ukraine) in the past two years.
As India is trying to massively expand its steel industry and has shown a strong closeness to Russia since the outbreak of the Ukraine war, further concessions on steel and aluminum would be economically more than inconvenient for the US domestic market. It would also undermine the United States’ tough political stance toward Russia.
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