Buying American fuel

After a decade of rapid expansion, America is the world’s largest producer and exporter of liquefied natural gas. For countries worried that their trade surpluses with America put them in the firing line for tariffs, Donald Trump has a solution: buy American fuel. This month, Mr Trump declared that his country’s deficit with the European Union would “disappear easily and quickly” if the bloc did only that. He and his cabinet have pressed other allies, including India and the Philippines, to increase their purchases of American liquefied natural gas (LNG). Mr Trump’s treasury secretary Scott Bessent has sought to persuade Japan, South Korea and Taiwan to invest in a vast LNG project in Alaska and commit themselves to purchasing a “substantial portion” of the site’s output. American gas companies also spy an opportunity in the trade war.

(Adapted from “America Won’t Be Able To Bully The World Into Buying More Gas,” by The Economist, published on April 22, 2025)

Trillions for the wealthy

The wealthiest have gotten richer, and control a record share of America’s wealth. New data suggest $1tr of wealth was created for the 19 richest American households alone in 2024. That’s more than the value of Switzerland’s entire economy. It took four decades for the top 0.00001pc of Americans’ share of total US household wealth to grow from 0.1pc in 1982 — when 11 households made up that rarefied group — to 1.2pc in 2023, according to an analysis by Gabriel Zucman, an economist at the University of California, Berkeley, and the Paris School of Economics. In one year, by the end of 2024, the share of total US household wealth for the modern 0.00001pc — those 19 households — jumped to 1.8pc, or about $2.6tr. That is the biggest one-year increase on record, according to Mr Zucman. Total US household wealth stood at about $148tr at the end of 2024, according to a measure Mr Zucman used.

(Adapted from “$1 Trillion of Wealth Was Created for the 19 Richest US Households Last Year,” by Juliet Chung, published on April 23, 2025, by the Wall Street Journal)

Vulnerability of tech stocks

As the panic fades, investors’ nerves are still jangling. For the time being, stock markets have stopped convulsing, and the prices of American Treasury bonds are no longer in freefall. Yet share indices across America, Asia and Europe have hardly recovered their poise; instead, day-to-day drops of one per cent or more have become unremarkable. The VIX index — Wall Street’s “fear gauge”, which measures expected volatility using the market price of insurance against it — has fallen from its nerve-shredding peak reached a fortnight ago. It is nevertheless at a level last seen in 2022, amid a grinding bear market. The price of gold has been breaking record after record. Investors, in other words, are offloading risk wherever they can and preparing for a drawn-out slump.

(Adapted from “Why American Tech Stocks Are Newly Vulnerable,” by The Economist, published on April 23, 2025)

Trade war hits US auto sector

The auto industry, which supports one in 10 jobs in Michigan, has shifted into battle mode to stem the worst effects of President Trump’s trade war. The industry has become increasingly dependent on parts and vehicles from Canada, Mexico and China — imports Trump hit with steep tariffs in recent weeks. This trade has grown so large that Michigan ranks fifth in the nation by the size of its imports and exports, even though its total economy ranks 14th. Detroit’s automotive executives are wrestling with suppliers over price increases and setting up war rooms to figure out how to cut costs. Workers at the state’s biggest auto factories are tightening their belts, too, in case tariffs spark layoffs by causing a spike in vehicle prices and a drop in demand. Hours after the “Liberation Day” tariffs took effect, Jeep parent Stellantis temporarily laid off about 900 workers.

(Adapted from “The First Victim Of Trump’s Trade War: Michigan’s Economy,” by Jeanne Whalen and Christopher Otts, published on April 6, 2025, by the Wall Street Journal)

Published in Dawn, The Business and Finance Weekly, April 28th, 2025