New tariffs on Mexico, Canada, and China

According to Saudi Gazette, US President Donald Trump will impose new tariffs on imports from Mexico, Canada, and China starting Saturday, marking a significant escalation in global trade tensions.

The tariffs will include a 25% duty on Mexican and Canadian imports and a 10% tariff on Chinese goods.

However, Trump stated on Friday that Canadian oil would face a reduced tariff of 10%, set to take effect on February 18.

Trump also signaled potential future tariffs on the European Union, accusing the bloc of unfair treatment toward the United States.

"These are promises made and promises kept by the President," White House Press Secretary Karoline Leavitt said, justifying the Mexico and Canada tariffs as a response to what she described as their role in the distribution of illegal fentanyl in the United States.

The president has frequently cited undocumented migration and trade imbalances with neighboring countries as key reasons for the tariffs.

During his campaign, Trump had threatened to impose tariffs of up to 60% on Chinese goods but has so far held off on immediate action, instead directing his administration to conduct further analysis.

US imports from China have remained flat since 2018, following a series of tariffs imposed during Trump’s first term.

However, concerns are mounting that renewed trade restrictions could trigger a wider trade conflict and drive up costs for American consumers.

In response to the tariffs, Canadian Prime Minister Justin Trudeau warned that Canada would retaliate if the US moves forward with the new levies.

"It's not what we want, but if he moves forward, we will also act," Trudeau said.

Both Canada and Mexico have indicated they will implement countermeasures while also working to reassure Washington that they are addressing US border concerns.

Chinese officials have also urged against protectionist measures, with Vice Premier Ding Xuexiang calling for a "win-win" approach to trade during a speech at the World Economic Forum in Davos. While he did not mention the US by name, his comments underscored China's concerns about a renewed trade war under Trump's presidency.

The new tariffs come as the US relies heavily on imports from Canada, Mexico, and China, which together accounted for 40% of all goods brought into the country last year. If tariffs on Canadian and Mexican oil imports are enforced, they could undermine Trump’s promise to lower the cost of living, potentially raising prices on fuel and consumer goods.

Trump acknowledged on Friday that tariffs could lead to short-term economic disruption, as costs are often passed along to businesses and consumers. 

PSX witnesses 29%WoW decline in daily trading volume

Pakistan Stock Exchange witnessed volatility throughout the week, largely influenced by corporate earnings announcements. During the week, the benchmark KSE-100 index shed 625 points or 0.54% to close at 114,256 points on Friday, January 31, 2025.

Fertilizer stocks weighed heavily on the benchmark index, following FFC’s lower-than-expected profitability. However, this was partially offset by higher-than-expected final dividends by the banks.

The week begun with State Bank of Pakistan (SBP) cutting the policy rate by 100bps to 12% amid a continued disinflationary trend.

Additionally, SBP revised its inflation forecast for FY25 to range between 5.5% to 7.5%, significantly lower than the earlier projections of 11.5% to 13.5%.

The central bank also changed its current account balance forecast to a range of a 0.5% surplus to a 0.5% deficit of GDP in FY25 as against an earlier estimate of a nominal deficit.

Meanwhile, ahead of the IMF review, authorities met another condition by notifying a gas price increase for captive power producers to PKR3,500/ mmbtu.

Market participation dropped to 15-week low, with an average daily traded volume of 498 million shares, down 29%WoW.

Foreign exchange reserves held by SBP declined by US$76 million to US$11.4 billion as of January 24, 2025.

The domestic currency weakened marginally against the greenback to PKR278.95 to a US$.

Major news flow during the week included: 1) Reko Diq deal with Saudi firm nearing finalization, 2) Only 3,651 individuals file taxable income greater than PKR100 million, 3) SBP injects PKR523.7 billion through open market operations, and 4) Weekly SPI inflation eases multi-year low at 0.44%YoY.

Textile Weaving, Automobile Assembler, and Banks were amongst the top performers, while OMCs, Engineering, and Refinery sectors were among the laggards.

Major selling was recorded by Banks and Foreigners with a net sell of US$10.4 million. Companies, Other organizations and Individuals absorbed most of the selling with a net buy of US$10.5 million.

Top performers of the week were: ATLH, NBP, KTML, AKBL, and BAHL, while the laggards included: ISL, SNGP, UNITY, AGP, and KOSM. 

According to AKD Securities, the market is expected to remain positive, with short-term market momentum largely following the upcoming corporate results.

Over the medium term, the KSE-100 index is anticipated to sustain its upward momentum through CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable RoEs of banks, and improving cash flows of E&Ps and OMCs, benefitting from falling interest rates.

Iran foreign policy must not be dictated by US

Iran’s Vice President for Strategic Affairs Mohammad Javad Zarif, stated, "I do not see the United States as an opportunity for Iran's foreign policy. I consider the US a nuisance or a shackle that must be removed from Iran's foreign policy."

In his speech at a recent conference on international relations and geopolitics, Zarif referenced discussions from the 55th World Economic Forum (Davos 2025).

He noted that the theme of "the return of hard power," with a focus on Donald Trump's re-election as President of the United States, dominated many discussions.

Zarif highlighted a common sentiment among attendees, "Take Donald Trump, the new President of the United States, seriously but not literally."

“The 47th US President seeks to revive American hard power using economic leverage rather than military tools,” he noted.

Zarif also addressed the notion that a polarized world requires loyalty.

He mentioned that some attendees believed Trump divides the world into smaller countries and peer countries.

"Trump expects loyalty from smaller countries but not from those on par with the United States," Zarif said.

Discussing the post-polar world, the former foreign minister noted that some attendees believed Europe desires relative American hegemony, but Trump does not.

Others emphasized that loyalty is not a consistent factor in Trump's calculations, raising serious doubts about its stability.

Zarif added that a new international polarization would not emerge soon.

Some view this situation as a form of chaos, but Zarif argued that it signifies a new international condition where "temporary issue-based coalitions" replace "permanent polarizations."

He explained that the absence of loyalty could be interpreted within these temporary coalitions, which might last longer depending on their purpose and goals.

The official emphasized that Iran has an opportunity in this situation that must be seized.

He stated that some outside Iran, including Zionists and certain Iranian opposition groups, aim to solidify the perception that Iran is at its weakest and most dangerous.

This perception was so ingrained that a high-ranking European official repeatedly claimed during a Davos session that Iran “has been weakened.”

Zarif responded, "Assuming your statement is correct and Iran has weakened, you and your like-minded colleagues can no longer claim that Iran disrupts West Asia’s peace because, according to you, we lack the power to do so."

Zarif insisted that the reason for the lack of harmony in West Asia is not Iran but the unresolved Palestinian issue.

Zarif continued, "The second point they emphasize is that Iran, allegedly 'weakened,' now faces fewer options, with the only remaining option for Tehran being nuclear weapons.”

“They argue that before Iran can move towards production, we must prevent it with military action,” he added.

However, Zarif noted that Trump's recent statements suggest he is not entirely convinced by these arguments. 

In response to questions, Zarif agreed that Iran's foreign policy should start regionally but stressed the need to remove the US as an obstacle.

"I do not see the US as an opportunity for Iran's foreign policy. I consider the US a nuisance or a shackle that must be removed from Iran's foreign policy," he reiterated.

"We do not need to establish friendly relations with the US Instead, we must ensure that others do not feel they must fight the US when they engage with us, as this will deter them from choosing us," he concluded.

 

Trump dancing to Zionist drumbeat

US President Donald Trump's insistence on the proposal to relocate Palestinians from the Gaza Strip evidently reflects his alignment with the expansionist aspirations of Zionist ideologies. Trump reiterated his suggestion while trying to initiate a charm offensive directed at the Palestinian people. He added that Cairo and Amman will comply with his request to take in Palestinians. 

“I want them to live in a place without violence. Gaza has been hell for so many years. They can live in much better and more comfortable areas,” Trump said while referring to Israel’s devastating war on the Palestinian territory. 

On Saturday, Trump floated the idea of transferring Gazans to Egypt and Jordan to “clean out” the enclave. 

 “It is literally a demolition site right now, almost everything is demolished and people are dying there. So, I would rather get involved with some of the Arab nations and build housing in a different location, where they can maybe live in peace for a change,” he said. 

Jordan and Egypt have issued official statements rejecting the removal of Palestinians from Gaza.

Trump’s idea is in line with those Israeli politicians who have consistently supported the mass relocation of Palestinians from the Gaza Strip and the reestablishment of Jewish settlements in the territory.

In October 2024, former National Security Minister Itamar Ben Gvir called for reestablishing settlements in Gaza and “encouraging emigration” of the strip’s 2.3 million population. 

“If we want to we can renew settlement in Gaza…We can [also] do something else – encourage emigration. Israel is giving them (Palestinians) the option of going to other countries,” the far-right minister, who resigned following the establishment of a ceasefire in Gaza said.

The ceasefire between Israel and Hamas took effect on January 19 after Israel failed to “destroy” the Palestinian resistance groups following more than a 15-month conflict.  

Israel launched a genocidal war on Gaza on October 07, 2023, killing more than 47,000 Palestinians including some 17,000 children. 

Israeli intentions extend beyond the reoccupation of Gaza to include the annexation of the occupied West Bank.

Following Trump’s reelection as the US president in the November 2024 election, Finance Minister Bezalel Smotrich suggested the regime would look to annex the West Bank in 2025. 

“2025: the year of sovereignty in Judea and Samaria,” the far-right minister said, using the biblical name by which Israel refers to the West Bank.

Days after the US presidential election, Smotrich hoped that the Trump administration would recognize Israel’s push for “sovereignty” over the occupied territory.

"I am convinced that we will be able to work closely together with President-elect Trump and all members of the incoming administration, to promote the common values and interests of the two countries, to strengthen the strength and security of the State of Israel, to expand the circle of peace and stability in the Middle East out of strength and faith and on the basis of recognition in the unquestionable historical belonging of the whole Land of Israel to the people of Israel," Smotrich said.

Trump moved the US embassy from Tel Aviv to Jerusalem (al-Quds) during his first term (January 20, 2017 – January 20, 2021). He also proposed a plan that would have cemented Israeli control over al-Quds and protected settlements in the West Bank. This is while all Israeli settlements are illegal under international law. 

From now on, it seems that Trump will likely align his objectives with those of Smotrich and similar figures.

Mike Huckabee, Trump's nominee to be the next US ambassador to Israel, is a strong advocate for the recognition of Israeli sovereignty over the West Bank.

Huckabee told the Associated Press when he was running to be the Republican presidential nominee in 2015 that if elected, his administration would formally recognize the West Bank as part of Israel.

The Israeli army attempted to ethnically cleanse Palestinians from Gaza, but it failed to do so amid rising resistance. 

Meanwhile, Israel has intensified deadly assaults on the West Bank as it seeks to implement its malevolent plans in the occupied territory.  

But Palestinians have shown that they will fight tooth and nail against the Israeli army that is armed to the teeth. 

 

Pakistan: Easypaisa Bank Gets First Digital Retail Bank License

In a landmark ceremony held at the State Bank of Pakistan (SBP) in Karachi, the Governor of central bank Jameel Ahmad, awarded the first Digital Retail Bank (DRB) license to Easypaisa Bank Limited (formerly Telenor Microfinance Bank Limited), authorizing it to commence commercial operations.

The DRB license to Easypaisa Bank is expected to promote innovation, enhance financial inclusion, and ensure the availability of accessible and affordable digital financial services. The event was attended by CEOs of digital banks, members of the Executive Committee of the Pakistan Banks’ Association, the Board of Directors and the senior management of Easypaisa Bank and senior executives of SBP.

Delivering the keynote address, the Governor underscored SBP's strategic role in establishing the framework for digital banking in Pakistan and facilitating the development of digital banks through a structured licensing process. He urged Easypaisa Bank to draw inspiration from its sponsor, Ant Group, by prioritizing the digital transformation of small and medium enterprises (SMEs) in Pakistan.

The Governor also highlighted the critical importance of achieving licensing milestones and encouraged digital banks to innovate and design customer-centric solutions tailored to the needs of individuals, micro, small, and medium enterprises (MSMEs), and other underserved segments. He emphasized that this focus would be instrumental in fostering financial inclusion and driving economic growth.

The Governor stressed upon the importance of addressing challenges associated with rapid technological advancements. He highlighted two critical areas of digital literacy of customers and cyber security measures to protect customer trust and ensure the integrity of the financial system.

He also expressed his confidence that, with the issuance of this license, Easypaisa Bank will prioritize the development of innovative, customer-focused, and affordable digital financial solutions, particularly for underserved and unserved segments of society. He emphasized that such efforts will play a pivotal role in advancing the financial inclusion and digitalization objectives.

In January 2023, SBP issued No Objection Certificates (NoCs) to five successful applicants: HugoBank Limited, KT Bank Pakistan Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited, and Easypaisa Bank Limited.

These entities were selected following a rigorous evaluation process that assessed key criteria, including governance and fitness, industry expertise, financial capacity, business strategies, implementation frameworks, funding plans, and IT and cybersecurity infrastructure.

In September 2023, these banks received In-Principle Approval (IPA) to prepare for operational readiness. Subsequently, after fulfilling the required conditions, Easypaisa Bank Limited has now been authorized to commence commercial DRB operations.

The ceremony also featured remarks from the member of the Board of Directors of Easypaisa Bank who shared their vision and commitment to driving innovation in digital financial services. They expressed their gratitude to the State Bank of Pakistan for its support and reaffirmed their dedication to setting new benchmarks in customer-centricity and technological advancement in the financial sector.

 

 

German economy in deep crisis

The German economy is in deep crisis, with gross domestic product likely to contract 0.1% this year, the BDI industry association said on Tuesday, putting it on track for three years of declining growth for the first time since reunification.

At the same time, the euro zone will grow by 1.1% and the global economy by 3.2%, BDI said, indicating Germany will remain one of the currency bloc's laggards in economic terms.

"The situation is very serious, growth in industry in particular has suffered a structural break," BDI president Peter Leibinger said in Berlin. East and West Germany were reunited as a single sovereign state in the 1990s.

Increasing competition from abroad, high energy costs, still elevated interest rates and uncertain economic prospects have taken their toll on the Germany economy, which contracted in 2024 for two years in a row.

Disagreements over how to revive Europe's largest economy contributed to the governing coalition's demise, with the dire economic situation reflected in the storied auto industry as Volkswagen undertakes steep cost cuts to remain relevant.

The economic crisis is more than just a consequence of the pandemic and Russia's invasion of Ukraine, Leibinger said.

The problems are home-made and the result of a structural weakness since 2018 that governments have failed to tackle, Leibinger said.

"Public investment in modern infrastructure, in the transformation and the resilience of our economy, is urgently needed," Leibinger said, also calling for a reduction in bureaucracy, lower energy prices and a clear strategy for strengthening the German innovation and research landscape.

With a view to Brussels, Leibinger said it was important for Germany to take on a more confident leadership role again and for Europe to become more strategically independent.

The BDI president also addressed US President Donald Trump's return to the White House and his tariff threats, which could make the export-oriented German economy shrink by almost 0.5% in 2025 instead of the forecast 0.1% decline.

"The most important thing will be to enter into a transactional relationship and to have strategically important competencies that our partner can only find with us," Leibinger said.

 

Egypt and Jordan reject any attempt to move Palestinians out of Gaza

Egypt and Jordan have firmly rejected any attempt to move Palestinians out of their land, whether temporarily or permanently. The responses by the two countries came immediately after US President Donald Trump suggested Egypt and Jordan should take more Palestinians from Gaza. 

Egyptian foreign ministry expressed Cairo’s “continued support for the steadfastness of the Palestinian people on their land”.

The ministry rejected any infringement on those inalienable rights, whether by settlement or annexation of land, or by the depopulation of that land of its people through displacement, or encouraged transfer or the uprooting of Palestinians from their land, whether temporarily or long-term, France 24 reported.

Jordanian Foreign Minister Ayman Safadi said Amman’s rejection of any displacement of Palestinians is “firm and unwavering”.

Palestinian President Mahmud Abbas also condemned “any projects” to relocate the people of Gaza outside the territory.

Without naming the US leader, Abbas “expressed strong rejection and condemnation of any projects aimed at displacing our people from the Gaza Strip”, a statement from his office said, adding that the Palestinian people “will not abandon their land and holy sites”.