"After prolonged reflection, I have come to a definition of Swadeshi: the restriction of ourselves to the use and resources of our immediate environment. […] Under the discipline of Swadeshi, the deprivation of a pin not made [in the United States] is not intolerable. The profound poverty into which the majority of [Americans] are plunged is due to the abandonment of Swadeshi. If no goods had been imported [into the United States], this country would today be a land flowing with honey." This doctrine, which could be attributed to Donald Trump, was theorized over 100 years ago by another Nobel Peace Prize candidate: Gandhi. The difference is that instead of boycotts, Donald Trump has a far more effective weapon at his disposal: tariffs. After being spared on July 7, the European Union also suffered the wrath of the American president on tariffs this Saturday with the announcement that 30% tariffs would come into effect on all European products imported into the United States on August 1. While the countermeasures have already been announced, negotiations are continuing behind the scenes. This situation is all the more comfortable for Donald Trump as it allows him to continue to control the narrative in a sort of lyrical cacophony surrounding the tariffs.
It was in this desire to regain control of the narrative that Donald Trump declared in a BBC interview: "I'm disappointed with Putin, but I'm not done with him. […] We'll have a great conversation, I'll say, 'That's good, I think we're close to a deal,' and the next day he'll demolish a building in Kyiv." President Trump also promised more arms to Ukraine via NATO, as well as 100% tariffs on Russia, further suffocating a debilitated economy. These statements, however, had little impact on the price of oil, which continues to hover below $70 per barrel, a sign that the markets still believe in a favorable outcome.
Indeed, the agreement reached by Nvidia this weekend to lift the ban on H2O chip exports to China, as a gift to Jensen Huang's company to celebrate its $4 trillion market capitalization, shows that a solution is still possible. This agreement comes at the same time as reassuring economic figures in China, with GDP growth of +5.2% year-on-year (versus +5.1% expected) and industrial production increasing by +6.8% year-on-year (versus +5.6% expected). The only downside is retail sales, which highlight a still-convalescing Chinese consumer (+4.8% YoY vs. +5.3% expected). And as the week opens with the start of the earnings season, attention will once again be turned to inflation in the United States, which should set the tone for investors in their cat-and-mouse game with Jerome Powell regarding the rate cut trajectory, and as continuing jobless claims reached 1.965M, their highest level since 2021. Donald Trump could take this quote from the Mahatma to his own: "The English [/ the European / the Canadian / the Mexican / the Chinese / Jerome Powell / ...] is not bad in itself, it is the system it represents that is bad."
