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Tensions between the U.S. and NATO allies flared as President Donald Trump said he was considering pulling the U.S. out of the Western military alliance due to its European members refusing to send ships to unblock the Strait of Hormuz, according to Reuters.
Trump told Reuters on Wednesday that he would state in an address to the nation later in the day that he was “absolutely” considering withdrawing the U.S. from the NATO alliance.
“I’ll be discussing my disgust with NATO,” he said in regard to the speech.
Trump’s comments reflect his ongoing frustration with NATO and came just hours after Defense Secretary Pete Hegseth declined to reaffirm the U.S. commitment to NATO’s collective defense, a concept that lies at the heart of the alliance.
Experts have warned that these repeated statements suggest that the U.S. might not honor its NATO commitments could encourage Russia to test NATO members’ readiness to enforce the alliance’s Article 5, which states an armed attack against one member state is an attack on all.
Secretary of State Marco Rubio said the U.S. may need to reassess its relationship with NATO after the Iran war is finished, calling the military alliance’s alleged lack of support during the Middle East conflict “very disappointing,” Bloomberg reports.
However, Legally, Trump has limited options. A law passed in 2023, which was championed by then-Senator Marco Rubio, prevents a U.S. president from suspending, termination or denouncing the NATO treaty or withdrawing the U.S. from it unless the Senate agrees by a two-thirds majority or Congress passes a new law. Neither of those are possibilities, as Republicans who favor the alliance will likely side with Democrats to circumvent any action Trump might urge Congress to take.
China buys Argentine corn: Cofco International Ltd. said it is loading a bulk cargo of Argentine corn to China, marking the first shipment in more than 15 years as the two countries expand agriculture trade, according to Bloomberg.
The deal comes after China cleared Argentine corn imports in 2024, and as the South American nation reaps a bumper harvest. China also booked a rare cargo of Argentine wheat last year, which was the first shipment in decades.
The shipment of around 34,000 MT of corn will load at Cofco’s Timbúes port terminal in Argentina and is destined for China’s feed sector. “The cargo reflects the increasing alignment between the two markets and provides additional origin option for Chinese buyers,” Cofco said.
Argentine peso rally: The Argentine peso has largely struggled for more than a decade, though it’s flourished since the commencement of the war in Iran, which has upended global markets.
The peso was one of two developing currencies to gain against the dollar in March, when the MSCI return index for emerging FX saw its worst monthly decline since 2022 as traders assessed odds of interest-rate cuts and higher energy costs due to the conflict.
The peso has been the worst performing currency among 22 peers in 10 of the past 11 years, notes Bloomberg.
The gains are being driven by a seasonal surge in agricultural exports, rising energy shipments from the Vaca Muerta shale basin and a wave of dollar borrowing by local companies. At least two tapped international markets this week, even as volatility increased, including oil and gas firm Vista, which sold $500 million of a 12-year international bond on Wednesday.
“A lot of export dollars are hitting the market right now,” noted Joseph Incalcaterra head of Latin America Macro Strategy. “The structural growth in oil and gas exports is coinciding with high prices as well as with Argentina’s harvest season.”
However, Argentina’s renewed access to global financial markets is also playing a role in the peso’s strength.
Argentine companies have steadily tapped international markets for the past few months, as the war in the Middle East pressed on in an effort to finance energy investments. Debt-related inflows have become a key source of dollar supply in the local foreign exchange market, according to central bank data.
These inflows have allowed banks to build reserves, purchasing roughly $4 billion since the start of the year. Economy minister Luis Caputo has said the peso would be about 20% stronger were it not for those purchases.
25% tariff on finished steel aluminum goods: The Trump administration is preparing to set a tariff rate of 25% on finished products made with imported steel and aluminum, according to the Wall Street Journal, in an effort to streamline levies on metals and make it easier for companies to navigate President Trump’s import taxes.
The tariff rate could be announced as soon as this week, the Journal reported, citing people with knowledge of the administration’s plans. The 25% rate would apply to derivative products, those that contain steel and aluminum, the report said, replacing a current 50% rate on the value of steel and aluminum used in products. The higher rate would still apply for goods made almost entirely of steel and aluminum, according to the Journal.
The administration has been working to narrow the broad tariffs it imposed on steel and aluminum products to bring relief for business that found it difficult to calculate.
Retail sales strong in February: U.S. retail sales increased by the most in seven months in February as motor vehicle purchases rebounded and temperatures warmed up, but surging gas prices due to the war in the Middle East were expected to curb spending in the months ahead, notes Reuters.
The Commerce Department’s delayed report on Wednesday suggested that the economy was on solid footing before the U.S.-Israeli war with Iran. The conflict has sent global oil prices surging more than 50%, and the national average retail gas price this week topped $4 a gallon for the first time in more than three years.
Economists have warned a prolonged war and further increases in gas prices could offset some of the anticipated boost to consumer spending and the overall economy from tax cuts. They expected the conflict to weigh on growth in the second quarter.
“I expect consumer spending to be softer in the first half of the year than would have been the case in the absence of the surge in gasoline prices, but I project that energy prices will recede significantly within a few months, allowing real outlays to rebound in the second half of the year,” stated Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
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