Tariff War with Colombia on Hold
The U.S. and Colombia reached an agreement on Sunday to avoid a potential trade war after Colombia agreed to accept deported migrants, including those on U.S. military flights. President Trump had threatened severe tariffs and sanctions if Colombia refused to comply with his immigration policies, but the White House confirmed the agreement late Sunday. Colombian officials stated the impasse was resolved and offered resources to facilitate the migrants’ return, though they did not directly address the use of military aircraft. This comes as the Trump administration ramps up its immigration crackdown, drawing international criticism for its deportation methods.
Looming Tariff’s Impact on Prices
Foxconn and Nvidia announced plans to begin production of Nvidia’s high-demand AI servers in Guadalajara, Mexico, starting early 2025, reflecting a broader trend of nearshoring in response to global trade shifts. However, these efforts could face disruption if President Donald Trump implements sweeping tariffs on imports from Mexico, China, and Canada, which he is expected to detail soon. Analysts warn that tariffs could raise consumer prices, disrupt supply chains, and penalize companies investing in reshoring, such as Foxconn and other manufacturers expanding operations in Mexico. While Trump has hinted at using tariffs as leverage on broader geopolitical issues, businesses remain cautious, awaiting clarity on the scope and timing of these measures.
Fed Rate Cuts Unlikely
The Federal Reserve is expected to hold interest rates steady despite President Trump’s call for immediate cuts, citing inflation and high borrowing costs as ongoing challenges for consumers. Credit card rates remain at record highs, while fixed mortgage and auto loan rates continue to strain affordability for buyers. Student loan borrowers face rising rates, and savers are benefiting from top-yielding accounts offering nearly 5% returns. Any potential rate cuts in 2025 are expected to be gradual, providing limited short-term relief to borrowers.