Following months of uncertainty, the global trade picture is becoming more clear.
The US has reached trade agreements with 20 countries, including the EU, Japan, and the UK.
The Trump administration is also furthering negotiations with China and Mexico, which are currently enjoying a trade truce.
Yet Canada has been left out in the cold and is facing a 35%.
Tariff rate while US tariffs are also becoming visible in macro data.
Fetcher Jay Powell saying tariffs have caused an increase in food prices while we saw the overall goods and services US trade deficit drop significantly in June as imports drop.
Well joining me to break all of this down and the impact on markets as well as the economy is.
Kari, president and CEO of the Atlas Network.
Kareem, great to have you back.
Thanks for joining us.
Well, first and foremost, I do want to start out with India.
So we've been seeing headlines here about how companies are being affected, but what's the bottom line?
The bottom line of it is it comes down to supply and demand.
India is the 4th largest economy in the world, and they have been initiating tax cuts to increase domestic buying.
And this is a problem because it reduces the ability for exports in the global economy and we know that will then reduce the amount of available product which will then create a scenario of demand increasing as well and scarcity.
And that will drive prices, and we know that India is very important with regards to areas such as pharmaceuticals, automotive, agricultural products.
So when Prime Minister Modi is making these kinds of tax breaks for its own citizens to increase domestic consumptions, it's because of a fearful tariff environment.
Yeah, and Karim, when we talk about supply and demand, that is a simple equation that most of us can understand here.
But given the recent economic data from retail sales as well as inflation figures, we are seeing how that's affecting Americans as well as businesses.
So what's the reality on the ground?
What are you hearing?
The reality on the ground.
Is that supply chain moves slowly, but when the impacts are felt, they're felt immediately, and that's what we're starting to see now.
We're starting to see, for example, the cost of vegetables up to 38%.
We're seeing that PPI reports, the producer price index reports, are surging to levels that haven't been seen in 3 years.
Um, the forecasts were at 0.2% and now they're coming in at about 0.9% and these significant changes are indicators of inflation, which is coming and that will be passed along to American businesses and consumers.
So the next couple of months um have to be paid attention to very, very carefully.
At the same time too, we know that the administration is working to come up with certain levels of truces as you've mentioned, extending the 90 day with China up until November and working to essentially be able to create opportunities where there can be as well as carving out certain categories of products that will be not impacted by tariffs.
But either way there are impacts and we're just seeing those coming to light these days.
Karim, many of Us are paying attention to the final months of 2025 and of course it is earnings season.
We just heard from Home Depot.
We'll be hearing from big box retailers later on this week, but it is back to school season, so we're back at the big box retailers hunting for bargains.
We're also looking ahead to holidays including Thanksgiving or even Halloween or Christmas.
So when it comes to categories and sectors, what do you expect to see heading into your end?
Yeah, I mean, I would say that we are going to definitely see some increases in the cost of certain products, definitely in the realm of electronics, you know, part of getting together during the holidays are those meals, right, and agricultural products, as I mentioned before, are being impacted up to 38% as far as the cost of vegetables and other kinds of.
Products automotive continues to be an area that is getting hit as well as things that rely upon materials such as semiconductors or some of the metals that have been impacted like copper as it relates to things like cell phones and so forth.
So these are all categories that I would expect to be a bit more expensive as we're going into the holiday season.
Yeah, and last but not least before I let you go, we have less than 60 seconds here.
So in reality in this post-pandemic environment, we remember having hoarded supplies, but what can Americans really do given the inflation that we're seeing right now and what we can expect to see?
Right?
I would say that Americans need to really look to bargain shop wherever they can.
I think they need to be a little bit conscious about certain products that may not be as disposable as they should.
Meaning try to reuse things, try to go for a more recycled approach where you're really being able to not necessarily have one-time use products but instead use items that can be used over and over again and this will cut down on those budgetary concerns, especially with the higher prices that are existing in our global economy today.
Well, a lot to pay attention to as we head into the final months of this year.
I look forward to speaking with you again and welcoming you back.
Thank you so much for joining me so much.
Appreciate it as always.
