WEBVTT - Kopi Time E145 - Markets and Trump 2.0 0:00:05.969 --> 0:00:08.949 Hi, this is Copy Time, a podcast series on markets 0:00:08.949 --> 0:00:12.300 and economies from DBS Group Research. I'm Tambe, chief economist, 0:00:12.630 --> 0:00:17.729 welcoming you to our 145th episode. Happy New Year. Today 0:00:17.729 --> 0:00:21.069 it's just yours truly here. I'm gonna talk a bit 0:00:21.069 --> 0:00:23.989 about where we stand with the markets in 2025. 0:00:24.469 --> 0:00:27.860 Now, I'm having this discussion recorded just a few hours 0:00:27.860 --> 0:00:31.209 after Donald Trump took over office, and there has been 0:00:31.209 --> 0:00:34.990 a slew of executive orders taking the US out of 0:00:34.990 --> 0:00:39.240 the Paris climate treaty, withdrawing US from the WHO, talks 0:00:39.240 --> 0:00:43.909 about 25% tariff on Canada, Mexico, uh, starting on the 0:00:43.909 --> 0:00:47.580 1st of February. I think it will take a while 0:00:48.110 --> 0:00:48.369 before 0:00:48.418 --> 0:00:52.439 The market can fully digest, if ever, but at least 0:00:52.650 --> 0:00:55.450 not now. It'll be a while before the markets can digest, 0:00:55.459 --> 0:01:00.439 even remotely the far reaching implications of some of Trump's measures, 0:01:00.729 --> 0:01:02.889 and I don't think we can wait that long. I 0:01:02.889 --> 0:01:06.930 think we need to suss out what awaits us perhaps 0:01:06.930 --> 0:01:10.169 with some historical context and that's where I'd like to 0:01:10.169 --> 0:01:12.419 begin today. Uh, let's travel back. 0:01:12.540 --> 0:01:18.500 To the 1890s, 1890 to be precise, when William McKinley, 0:01:18.830 --> 0:01:21.709 who was the powerful head of the House Ways and 0:01:21.709 --> 0:01:26.910 Means Committee, pushed through a wide range of tariffs uh 0:01:26.910 --> 0:01:30.790 for on on US imports, and the idea at that 0:01:30.790 --> 0:01:36.470 time was to make sugar non-dutiable and balance. 0:01:36.769 --> 0:01:41.169 The loss of revenue from sugar import to a wide 0:01:41.169 --> 0:01:44.330 range of other non-sugar products. And the reason for that 0:01:44.330 --> 0:01:47.489 was in the late 191880s the US was going through 0:01:47.489 --> 0:01:50.209 a bout of high inflation, food prices were up, and 0:01:50.209 --> 0:01:53.080 the view was that a certain imported food items, including sugar, 0:01:53.290 --> 0:01:55.680 maybe if you make it duty free, it'll help inflation, 0:01:55.849 --> 0:01:58.239 but if you lose that tariff, well, that's a problem, 0:01:58.290 --> 0:02:00.459 so impose tariffs on everything else. 0:02:01.209 --> 0:02:05.769 And as a result, the average tariff on duty of 0:02:05.769 --> 0:02:09.089 imports in the US went to about 50% and the 0:02:09.089 --> 0:02:13.779 average tariff on all imports went to about 20%. This 0:02:13.779 --> 0:02:17.779 proved to be actually pretty unpopular because the Congress actually 0:02:17.779 --> 0:02:20.910 got a revenue windfall, uh, because the tariff that they 0:02:20.910 --> 0:02:23.239 took away from sugar and put on everything else actually 0:02:23.240 --> 0:02:24.179 amounted to more money. 0:02:24.429 --> 0:02:27.250 The Congress actually was called the billion dollar Congress in 0:02:27.250 --> 0:02:33.609 the early 1890s, and the Democrats ran against this measure 0:02:33.610 --> 0:02:37.728 by Republican McKinley to increase tariffs on a wide range 0:02:37.729 --> 0:02:41.619 of things in the midterm elections in 1892 and the 0:02:42.220 --> 0:02:46.100 Republicans lost the House and the Senate altogether, uh, because 0:02:46.100 --> 0:02:51.419 of the unpopularity of tariff. Now, the Democrats who ran 0:02:51.419 --> 0:02:54.580 against tariff, spent the next few years, at that time, 0:02:54.619 --> 0:02:56.899 by the way, they had all three chambers of the House, 0:02:57.440 --> 0:02:59.258 uh House and the Senate and the presidency. 0:02:59.889 --> 0:03:02.729 Grover Cleveland was a precedent, and they tried for the 0:03:02.729 --> 0:03:05.470 next couple of years to remove the tariffs. It didn't 0:03:05.470 --> 0:03:07.649 work out that well. I think that's lesson number one 0:03:07.649 --> 0:03:10.369 from history. Once you put up tariffs, it's not that 0:03:10.369 --> 0:03:13.050 easy to take out because all those industries that get 0:03:13.050 --> 0:03:15.330 protected by tariffs start fighting against it. 0:03:16.029 --> 0:03:21.339 So the Democrats tried and failed, and by the mid 0:03:21.339 --> 0:03:24.989 of 1890s, tariffs were still there and the US was 0:03:24.990 --> 0:03:28.320 stepping into a big recession. There was a banking crisis, uh, 0:03:28.508 --> 0:03:31.229 monetary policy was very tight because there was not a 0:03:31.229 --> 0:03:33.270 lot of extra gold and the US dollar was linked 0:03:33.270 --> 0:03:35.869 to the gold. So for a variety of reasons, uh, 0:03:35.949 --> 0:03:40.820 public opinion turned very, very sour pretty quickly and by 1896, 0:03:40.949 --> 0:03:43.949 the Democrats lost and the 0:03:44.759 --> 0:03:47.779 McKinley tired guy, McKinley, William McKinley became the president of 0:03:47.779 --> 0:03:48.589 the United States. 0:03:49.339 --> 0:03:54.250 Um, now, the subsequent years when McKinley presided over high tariff, 0:03:54.470 --> 0:03:58.229 the US actually went through an amazing spurt of growth, uh, 0:03:58.240 --> 0:04:01.350 both with respect to GDP and productivity, and it was 0:04:01.639 --> 0:04:04.429 something that has been noticed by Donald Trump. 0:04:05.110 --> 0:04:08.039 He always says that McKinley is his favorite president. He 0:04:08.039 --> 0:04:10.759 wants to be a tariff president himself, and he cites 0:04:10.759 --> 0:04:13.839 the years of McKinley presidency and the years after that 0:04:13.839 --> 0:04:17.940 early 1900s as proof that you can have high tariffs 0:04:17.940 --> 0:04:20.518 and high growth at the same time. So it is 0:04:20.519 --> 0:04:23.519 important for us to understand some of the things that 0:04:23.519 --> 0:04:26.159 happened in the US in the late 1890s that led 0:04:26.160 --> 0:04:28.920 to the strong growth and the conditions we might be 0:04:28.920 --> 0:04:31.558 encountering going into 2025 and beyond. 0:04:32.290 --> 0:04:35.250 How did the US manage to put a massive wall 0:04:35.250 --> 0:04:42.059 of tariffs, discourage competition, push away overseas uh flow of goods, 0:04:42.209 --> 0:04:46.609 and somehow miraculously grow so fast. Two things happened. First, 0:04:46.809 --> 0:04:49.929 the Klondike gold rush. There was a huge discovery of 0:04:49.928 --> 0:04:52.929 gold in the US. That gold entered the market, and 0:04:52.928 --> 0:04:54.890 since the dollar was linked to the gold, that resulted 0:04:54.890 --> 0:04:56.890 in a huge expansion of money supply. 0:04:57.309 --> 0:05:00.540 Now, as a result, the US went through a monetary 0:05:00.540 --> 0:05:03.589 easing while dealing with some of the headwinds from tariffs. 0:05:03.630 --> 0:05:06.390 So that was a very nice offset. The second big 0:05:06.390 --> 0:05:09.470 offset was massive amount of immigration that was continuing into 0:05:09.470 --> 0:05:14.029 the US from mainland Europe. So, in the late 1890s 0:05:14.029 --> 0:05:17.349 and early 1900s, the US was blessed by substantial monetary 0:05:17.350 --> 0:05:21.790 easing and substantially easing of labor supply because of substantial immigration. 0:05:22.619 --> 0:05:25.100 Do we expect either of those to happen in the 0:05:25.100 --> 0:05:27.750 next couple of years in the US? I think very unlikely. 0:05:28.019 --> 0:05:32.850 Inflation is still a problem, tariffs could fuel even additional inflation. 0:05:33.220 --> 0:05:37.420 Trump also has plans to cut taxes. That certainly won't 0:05:37.420 --> 0:05:40.779 help the inflation cost in the near term, and therefore, 0:05:41.019 --> 0:05:44.409 we might actually see monetary policy remain where it is now, 0:05:44.579 --> 0:05:47.059 or it will be marginally easier over the next year 0:05:47.059 --> 0:05:47.459 or two. 0:05:47.920 --> 0:05:52.320 So the late 1890s style massive monetary expansion simply is 0:05:52.320 --> 0:05:55.160 not on the cards. The second one is immigration. I 0:05:55.160 --> 0:05:57.678 think we can all safely say Trump is not interested 0:05:57.678 --> 0:06:02.079 in increasing substantial immigration. He's trying to decrease, particularly undocumented 0:06:02.079 --> 0:06:04.320 immigration in the US, so we were not going to 0:06:04.320 --> 0:06:07.399 see an expansion of the labor supply unlike what we 0:06:07.399 --> 0:06:12.440 saw in the late 1890s. So my lesson from comparing 0:06:12.440 --> 0:06:15.079 what's coming versus what happened back then. 0:06:15.510 --> 0:06:22.510 Is that substantial additional tariffs will almost certainly add to inflation, 0:06:22.630 --> 0:06:25.670 immigration measures will almost certainly add to tightness of the 0:06:25.670 --> 0:06:26.428 labor market. 0:06:27.109 --> 0:06:32.178 And therefore, going forward, I'm not particularly hopeful that Trump tariffs, 0:06:32.279 --> 0:06:34.600 whichever shape and form they come in the coming days 0:06:34.600 --> 0:06:37.450 and months, uh, would be particularly helpful to the US 0:06:37.450 --> 0:06:41.078 growth outlook. I've seen some forecasters out there looking at 0:06:41.079 --> 0:06:43.799 about 2.7% growth for the US. I mean, this is 0:06:43.799 --> 0:06:47.320 the most optimistic end of the spectrum. I am probably 0:06:47.320 --> 0:06:51.118 more with consensus looking at low 2s, about 2.1%, because 0:06:51.119 --> 0:06:53.230 if indeed the tariffs get implemented in a 0:06:53.839 --> 0:06:58.440 Wholesale manner, universal tariffs, substantial tariffs on additional tariffs on China, 0:06:58.640 --> 0:07:01.850 substantial tariff on Mexico, Canada, all those things would be very, 0:07:01.859 --> 0:07:04.440 very disruptive for business sentiment. It would be disruptive for 0:07:04.440 --> 0:07:08.600 the inflation dynamic, uh, would be, uh, disruptive for flows 0:07:08.600 --> 0:07:11.160 of trade, putting it on, and of course, let's not forget, 0:07:11.200 --> 0:07:12.640 I forgot the other important point. 0:07:13.015 --> 0:07:16.415 There would be retaliation. As the US raises tariffs. Other 0:07:16.415 --> 0:07:20.334 countries would raise tariffs, US exporters would suffer, that would 0:07:20.334 --> 0:07:23.214 then come back to again hurt US growth outlook. So 0:07:23.214 --> 0:07:26.364 I would probably shave off 40 to 50 basis points 0:07:26.695 --> 0:07:30.015 from that very optimistic end of the forecast instead of 2.7%. 0:07:30.015 --> 0:07:33.494 I think a reasonable forecast for the US for 2025 0:07:33.494 --> 0:07:35.714 would be in the low 2s, maybe 2.1 or so, 0:07:36.015 --> 0:07:38.524 assuming some of the shocks that are likely to come 0:07:38.524 --> 0:07:40.415 in the coming days and months. 0:07:41.440 --> 0:07:45.809 Now, beyond the issue of growth, which again I'm underscoring 0:07:45.809 --> 0:07:47.959 to be in the low 2%, uh what are the 0:07:47.959 --> 0:07:50.239 other market implications for the US? And the first is 0:07:50.239 --> 0:07:54.079 if rates do stay high, uh, there are negatives for 0:07:54.079 --> 0:07:57.079 the equity market, which has been on a tear the 0:07:57.079 --> 0:08:00.399 last couple of years. Uh, very rarely is the case 0:08:00.399 --> 0:08:03.850 that you see two consecutive years of 20% plus return. 0:08:04.190 --> 0:08:06.829 So from that perspective, uh, the headwind that will come 0:08:06.829 --> 0:08:09.559 from the US equity markets is a simple uh yield 0:08:09.559 --> 0:08:14.029 gap that if you have 10 year bonds yielding close 0:08:14.029 --> 0:08:19.630 to 4.7%, 4.8%, even 5%, uh, the dividend that the 0:08:19.630 --> 0:08:21.739 S&P 500 gives uh looks very. 0:08:22.225 --> 0:08:25.815 Attractive by comparison, and that becomes a sell signal in 0:08:25.815 --> 0:08:29.005 many equity evaluation models. Now you could of course argue 0:08:29.005 --> 0:08:33.135 that dividend is passe, all that matters is growth, and 0:08:33.135 --> 0:08:35.895 US tech companies are growing so fast. There's this huge 0:08:35.895 --> 0:08:38.734 AI boom going on, so why should we be negative 0:08:38.734 --> 0:08:41.215 about the US stock market. So I think that, you know, 0:08:41.304 --> 0:08:44.085 you could be constructive about certain parts of the market, 0:08:44.294 --> 0:08:47.603 but still be fairly cautious about the overall market outlook 0:08:47.794 --> 0:08:50.684 uh based on the yield gap calculation and also 0:08:50.919 --> 0:08:56.000 The good news for the tech uh companies is so 0:08:56.000 --> 0:08:58.840 deeply priced in because as soon as Trump got elected, 0:08:58.849 --> 0:09:01.770 we've seen a massive rally in the Teslas. 0:09:02.450 --> 0:09:05.419 And the tech companies in general, ah, because they're expected 0:09:05.419 --> 0:09:07.739 to benefit tremendously under the Trump administration. So I think 0:09:07.739 --> 0:09:10.619 the the upside is very much priced in. What has 0:09:10.619 --> 0:09:12.940 not been priced in is the likelihood of rates remaining 0:09:12.940 --> 0:09:17.059 high under the high tariff environment and therefore I am 0:09:17.059 --> 0:09:19.260 fairly cautious on the US equity side. 0:09:19.599 --> 0:09:21.770 And also let's not forget there is a tremendous amount 0:09:21.770 --> 0:09:24.450 on a relative basis value in the rest of the world, 0:09:24.500 --> 0:09:28.650 whether it's in Asia or in Europe. They haven't had, 0:09:28.820 --> 0:09:31.140 they haven't been blessed by the kind of growth momentum 0:09:31.140 --> 0:09:33.539 that the US has had lately, but I wouldn't put 0:09:33.539 --> 0:09:37.820 it past equity portfolio managers looking at those opportunities outside 0:09:37.820 --> 0:09:39.979 of Asia if rates do remain high through the course 0:09:39.979 --> 0:09:42.940 of 2025. The other issue related to rates is of 0:09:42.940 --> 0:09:45.179 course the private markets in the US. We will discuss 0:09:45.375 --> 0:09:49.853 Uh, private markets in a deeper dive, uh, in a 0:09:49.854 --> 0:09:53.015 couple of weeks' time at a separate podcast, but there 0:09:53.015 --> 0:09:58.005 has been a big expansion of private equity, private debt, uh, 0:09:58.174 --> 0:10:02.015 and the impact of interest rates remaining sticky on those 0:10:02.015 --> 0:10:04.853 asset classes, um, I don't think it's going to be 0:10:04.854 --> 0:10:09.414 particularly constructive. I'm not necessarily foreshadowing some systemic risk coming 0:10:09.414 --> 0:10:12.434 out of the US financial system, uh, because of high 0:10:12.434 --> 0:10:14.733 interest rates, but it cannot be a 0:10:15.039 --> 0:10:19.409 You know, help in any way or stretch of imagination. 0:10:19.479 --> 0:10:21.739 It's a tail, it's a headwind, and we need to 0:10:21.739 --> 0:10:24.520 be cognizant of that risk on the financial stability side 0:10:24.780 --> 0:10:28.090 coming from high rates. Credit, same story, credit spreads are 0:10:28.090 --> 0:10:30.539 exceptionally narrow. There there's only one way for them to 0:10:30.539 --> 0:10:33.700 go in my view, which is higher and with 0:10:34.640 --> 0:10:38.039 Policies likely to remain fairly restrictive going ahead. Uh, I 0:10:38.039 --> 0:10:40.479 think that there is room for some, particularly in the 0:10:40.479 --> 0:10:43.799 sub-investment grade category for credit spreads to widen from the 0:10:43.799 --> 0:10:46.520 historical narrows that we have right now. 0:10:47.679 --> 0:10:51.400 How will Asia deal with all this? I urge you 0:10:51.400 --> 0:10:54.439 to read the weekly we published, uh, yesterday. Uh, we're 0:10:54.440 --> 0:10:56.960 gonna put the link on the show notes. Uh, we 0:10:56.960 --> 0:11:01.200 talked about the issue of trade, uh, you know, a 0:11:01.200 --> 0:11:04.478 simple metric would be which country exports the most to 0:11:04.479 --> 0:11:07.799 the US and the Vietnam, Taiwan's, Japan's are the highest 0:11:07.799 --> 0:11:11.750 in the region. China is actually not that vulnerable uh 0:11:11.750 --> 0:11:12.320 of China. 0:11:12.469 --> 0:11:15.978 Total exports, barely 15% or even less, uh go to 0:11:15.979 --> 0:11:18.260 the US these days. It's come down a lot. Now 0:11:18.260 --> 0:11:21.218 you might argue that China has diverted the trade through 0:11:21.219 --> 0:11:24.780 Mexico and Vietnam, and those countries trade share with the 0:11:24.780 --> 0:11:27.820 US has certainly gone up, uh, but it is still 0:11:27.820 --> 0:11:30.940 a final demand export from those countries that tariffs will 0:11:30.940 --> 0:11:34.979 affect those countries directly, China downstream indirectly. 0:11:35.820 --> 0:11:38.630 But if I were to look at countries that are 0:11:38.630 --> 0:11:42.189 most vulnerable to a universal tariff, I would not put 0:11:42.190 --> 0:11:43.750 China at the top of my list. I would think 0:11:43.750 --> 0:11:47.789 more about Vietnam, Japan, Taiwan, and so on. Uh, I 0:11:47.789 --> 0:11:50.080 also think that some of these countries are such strong 0:11:50.080 --> 0:11:53.030 allies of the US, Japan and Taiwan in particular, that 0:11:53.030 --> 0:11:54.959 there will be a lot of horse trading and exceptions 0:11:54.960 --> 0:11:59.400 made to universal tariff. Nonetheless, tariffs are coming. 0:11:59.960 --> 0:12:02.679 Markets will know that these countries will see some of 0:12:02.679 --> 0:12:05.589 their export demand in the US go down as a result, 0:12:05.599 --> 0:12:08.439 and they would be cautious about the outlook of the 0:12:08.440 --> 0:12:12.840 export industry, particularly of those countries. In addition to export performance, 0:12:12.919 --> 0:12:15.718 the other thing for Asian economies to worry about in 0:12:15.719 --> 0:12:18.199 the tariff for 2.0 scenario. 0:12:19.070 --> 0:12:22.380 Is the currencies. Uh, that is usually the first place 0:12:22.380 --> 0:12:26.450 where the market reflects its view on the impact of tariff. 0:12:26.659 --> 0:12:28.449 If I think Country A is going to be heard 0:12:28.450 --> 0:12:31.780 by tariff of Country B, then Country A's exchanges should 0:12:31.780 --> 0:12:35.299 be bid down against Country B. And then we've seen 0:12:35.299 --> 0:12:37.070 this play out in the last couple of months, uh, 0:12:37.299 --> 0:12:40.369 Asian FX in particular, including that of Mexico outside of 0:12:40.419 --> 0:12:44.369 Asia have sold off ever since Trump got elected in 0:12:44.369 --> 0:12:47.330 anticipation of the tariff shock that's coming, exchange rates have 0:12:47.330 --> 0:12:51.679 been adjusting. But these sort of developments rates remaining likely, 0:12:51.809 --> 0:12:55.309 you know, high in the US, exchange rate outlook becoming 0:12:55.309 --> 0:12:59.179 a bit cloudy, exports outlook looking a bit difficult. This 0:12:59.609 --> 0:13:00.380 will put 0:13:00.520 --> 0:13:03.049 Monetary policymakers in the region in a bit of a quandary. 0:13:03.419 --> 0:13:05.900 You've seen in Asia in the last couple of months 0:13:05.900 --> 0:13:08.380 some central banks choosing to stay on pause, some being 0:13:08.380 --> 0:13:11.700 a bit brave and cutting ahead of any further shock 0:13:11.700 --> 0:13:13.700 that is coming out of the US, but by and 0:13:13.700 --> 0:13:16.260 large I think it's safe to say if the Fed 0:13:16.260 --> 0:13:19.260 becomes reticent about cutting rates, Asian central banks would have 0:13:19.260 --> 0:13:20.329 a very hard time. 0:13:20.719 --> 0:13:23.400 Uh, trying to differentiate themselves away from the fat and 0:13:23.400 --> 0:13:26.799 cut by themselves. Mind you, rate cut imperative is not 0:13:26.799 --> 0:13:29.640 that great in Asia anyway. Asian economies have done pretty 0:13:29.640 --> 0:13:30.479 well this year. 0:13:31.190 --> 0:13:34.728 There aren't that many headwinds to worry about beyond tariff. 0:13:34.969 --> 0:13:37.500 Regional travel, tourism has picked up. The region is going 0:13:37.500 --> 0:13:40.859 through a purple patch with respect to investment, and in 0:13:40.859 --> 0:13:45.859 that mix of fairly decent macrodynamic, I don't think there 0:13:45.859 --> 0:13:48.780 is a great deal of desperation or urgency among central 0:13:48.780 --> 0:13:50.940 banks to cut rates. It would be nice to cut rates, 0:13:51.080 --> 0:13:51.789 but it won't. 0:13:51.849 --> 0:13:53.880 The end of the world. I would not be revising 0:13:53.880 --> 0:13:57.809 down Asian growth forecasts in a wholesale manner if I 0:13:57.809 --> 0:14:00.229 start losing confidence in the rate narrative. I don't think so. 0:14:00.429 --> 0:14:02.559 So rates may come down or not may come down. 0:14:02.640 --> 0:14:05.549 I think Asia can chug along pretty well. But again, 0:14:05.719 --> 0:14:08.159 if you are hugely exposed to the trade cycle, if 0:14:08.159 --> 0:14:10.760 you're hugely exposed to the US markets, there will be 0:14:10.760 --> 0:14:12.400 noise that just goes without saying. 0:14:13.719 --> 0:14:17.369 I will conclude my short podcast for today, uh, and 0:14:17.369 --> 0:14:20.039 guests are coming, don't worry. Next year podcast, we'll have 0:14:20.039 --> 0:14:22.919 some excellent guests. Uh, I want to finish the podcast 0:14:22.919 --> 0:14:26.919 today by talking about China. The Chinese economy eked out 5% 0:14:26.919 --> 0:14:31.119 growth for 2024. People always have some quibbles about China's 0:14:31.119 --> 0:14:33.450 national accounts numbers, but when we look at 0:14:34.005 --> 0:14:38.765 performance from a wide variety of companies which report audited 0:14:38.765 --> 0:14:41.604 accounts outside the US, outside of China, and when we 0:14:41.604 --> 0:14:44.604 look at their books and their sales in China, they 0:14:44.604 --> 0:14:47.984 don't look that different from an economy that is growing by, uh, 0:14:48.125 --> 0:14:51.364 you know, 4 to 5% in real terms or expanding 0:14:51.364 --> 0:14:53.364 in nominal terms by 5 to 6%. 0:14:53.989 --> 0:14:56.150 So we do think that China had a decent year, 0:14:56.280 --> 0:14:58.559 led by exports, of course, the manufacturing sector had a 0:14:58.559 --> 0:15:01.789 great year, exports did very, very well, mind you again. 0:15:02.280 --> 0:15:05.320 While exports to the US are import for China, almost 0:15:05.320 --> 0:15:07.960 90 or 85% of China's exports go to the rest 0:15:07.960 --> 0:15:08.489 of the world. 0:15:09.719 --> 0:15:11.799 Those markets have been very buoyant and again, we're not 0:15:11.799 --> 0:15:15.869 just talking about third market parties through which those countries 0:15:15.869 --> 0:15:19.270 eventually trade with the US. Asian domestic demand has been strong, 0:15:19.479 --> 0:15:24.210 Middle East has been strong, Latin America has pockets of strength, Africa, 0:15:24.320 --> 0:15:28.479 same story, and those areas are increasingly intertwined with China's 0:15:28.479 --> 0:15:30.640 trade and exports, uh, dynamic. 0:15:31.390 --> 0:15:35.750 So, China had a good 2024, 25 will be clouded 0:15:35.750 --> 0:15:37.989 by the trade and tariff wars and the uncertainties vis 0:15:37.989 --> 0:15:40.390 a vis the US, but at the same time, we 0:15:40.390 --> 0:15:44.700 do expect a substantial more support measures coming from the authorities. 0:15:44.929 --> 0:15:48.469 Our China team in their reaction to the 2024 GDP numbers. 0:15:48.715 --> 0:15:52.565 said that to sustain anything close to that 5% in 2025, 0:15:52.804 --> 0:15:56.445 we'll probably need 50 basis points at least of prime 0:15:56.445 --> 0:16:00.844 lending cuts. We probably would need additional fiscal stimulus, not 0:16:00.844 --> 0:16:04.525 necessarily higher quantum, but better targeting aimed at areas that 0:16:04.525 --> 0:16:05.775 need revitalization. 0:16:06.010 --> 0:16:07.830 And I do think that some of those things are 0:16:07.830 --> 0:16:11.739 fairly well understood within the policy circles in China and therefore, 0:16:11.989 --> 0:16:15.869 watch out for a more targeted, if not more quantity 0:16:15.869 --> 0:16:19.429 of stimulus coming out of China in 2025. So I'm 0:16:19.429 --> 0:16:22.270 gonna wrap it up for that uh on that right 0:16:22.270 --> 0:16:24.950 for the time being. So thanks to listening to the 0:16:24.950 --> 0:16:27.590 first podcast of 2025. It's great to have you guys. 0:16:27.695 --> 0:16:31.005 And your support. Copy Time was produced by the very 0:16:31.005 --> 0:16:34.565 efficient Ken Delbridge at Spy Studios. Violet Lee and Daisy 0:16:34.565 --> 0:16:37.965 Sharma provided additional assistance. It is for information only, does 0:16:37.965 --> 0:16:42.684 not represent any trade recommendations. All 145 episodes of Copy 0:16:42.684 --> 0:16:47.205 Time are available on YouTube and on all major podcast platforms, 0:16:47.405 --> 0:16:52.015 including Apple, Google, and Spotify. As for our research publications, webinars, 0:16:52.025 --> 0:16:54.125 and live stream, you can find them all by Google 0:16:54.125 --> 0:16:56.284 and DBS Research Library. Have a great day.