Entering the final stretch of 2025, the US and China seem to be starting November on their most positive note of the year.
Now Trump and Xi Jinping met in South Korea last week and agreed to a one-year trade truce.
China will buy soybeans from US farmers and lift export restrictions on rare earths while the US has lower tariffs on Chinese goods from 57% to 47%.
Now, while cooler heads have prevailed overseas, there's tension brewing in North America and certainty.
Over the future of trade talks between the US and Canada as the Trump administration's trade strategy heads to the Supreme Court, and the Treasury Secretary says the president's latest tariff threat may never materialize.
Well, joining me to weigh in this morning is Patrick L.
Young, chairman and founder of Exchange Invest.
Patrick, good morning.
Thank you so much for joining us.
Well, the US and China agreeing to a one year trade truce.
What are your takeaways from the meeting between Trump and Xi last week?
Well, it was very interesting first of all to see that it looks as if President Xi might still be in charge because we weren't even sure about that a few months ago.
Trump is clearly in charge of the USA, even though he may not know who CZ is and therefore it gives us a sort of an element of feeling that we're back in the Biden administration.
But leaving that aside, the top level domain discussions between China and the US somehow or other left me a little disappointed.
Yes, we've got, you know, some sort of a truce piece in our time, but look at the soybean numbers.
I mean this Trump.
To deal used to be the US was the dominant supplier of soybeans to China, whereas what we're talking about now is roughly about 12 million tons if I remember correctly, is going to be exported by the US to China, which is poultry still is looking to export something like 100 to 112 million tons to China in the same period of time.
So there's a certain element of did China really just sop something to Trump.
On the other hand, of course, rare earths, that gets Into a much more interesting discussion because one, as we all know, it's an oxymoron.
Rare earths aren't that essentially rare.
It's just a question of the fact that the Western world is full of ecologists who don't like people mining stuff these days.
So was she really sitting back and thinking, well, perhaps we have to think about the long term issue with AI chips and also the issue of rare earths where if China doesn't export to the USA, it looks as if economic substitution effects are going to deliver a lot of other people who will.
Well, Patrick, that scenario we'll definitely keep a close eye on.
Now I do want to move on to focus in the nation's capital.
The US government shutdown is about to break the 35 day record set back in Trump's first term.
So what are your expectations for the progress in terms of the government reopening?
When do you think this ends?
I have to admit I have absolutely no idea whatsoever because at the moment I mean past government shutdowns have often seemed to revolve around some huge point of principle engineered by the opposition of either party, whereas at the moment nobody really understands what they're arguing about.
I mean, the idea is that Trump doesn't have the right to govern over something that actually has been a proven failure from a previous regime, and people want that put back.
And it's a complete mess of the first order.
It demonstrates also, I think, a very dangerous piece of politics on the part of the Democrats because they really don't understand why they lost the last election to Trump and therefore this could drag on and on.
But every day that it drags on, it's probably only going to be playing to the forehand of the MAGA regime, which suggests that the Democratic Party are out of touch with the people.
Well, Patrick, one thing is for sure, the Supreme Court will hear arguments on Trump's tariffs, and while tensions have boiled over between the US and Canada, our neighbor up to the north is moving forward on its plans to loosen China's control over rare earths.
So what do you make of all of this?
Very, very interesting.
Look at the internal politics of Canada.
A lot of people remain very upset at Mark Carney winning election.
Remember that effectively the Canadian electoral situation is somewhat anti-democratic.
They can weigh the vote in favor of the opposition to Mark Carney out west where all the mines are, but ultimately they don't get the seats because there's a concentration in liberal metropolitan areas that tend to support the Carney Party, or indeed Trudeau before that.
So actually in many ways this looks to me A sop against another separatist movement coming up, not the Bloc Quebecois this time because they're the people who've ultimately been trying to kill off rare earth mining for a long time, but actually the people in the west of Canada who are mad and angry because they want to get mining for rare earths, and it makes economic sense and it may also give Carney, Prime Minister Carney of Canada, an opportunity to look better in the eyes of the USA where relations with Donald Trump remain challenging and in court.
And Patrick, while I have you here, I do want to get your take on central banks in particular here in the US and across the Atlantic in Europe.
So last week, the Fed cut rates as widely expected by 25 basis points in terms of the December meeting.
Still have to wait and see and we do have about 37 days left until that December rate decision.
But what do you make of the ECB's latest move and what are you looking for when it comes to the Eurozone moving forward?
Well, I mean, the problem is the eurozone simply hasn't moved forward for a generation.
It's been economically mismanaged.
They've got growth at about 1%.
Remember, the USA managed to grow 86% over the course of 15 years while Europe grew at 9% in total.
So the problem the ECB really faces is it doesn't know what it's doing right now because in one way it's trying to fight an inflation at the same time it probably needs to do something to.
Try and help the economy overall, but ultimately there's just atrophy in the European Union because it's being strangled by bureaucracy from every angle, and actually the government itself is trying to do ridiculous things like impose a monoorse a single stock exchange in all of Europe.
What utter idiocy which demonstrates how out of touch they are when the communists in China are quite happy to have 4 stock exchanges touting for business across the nation.
Well, finally, Patrick, before I let you go, let's shift our focus on over to the UK.
Rachel Reeves is considering an exit tax, so take us through this situation and what are the implications here?
Well, the UK has been in managed decline ever since they elected Tony Blair 30 years ago.
Ultimately, the government has spent more money than it could afford over a multiplicitous regime allegedly of the right and allegedly of the left, but they've all basically spent too much money.
She's now dug herself into a hole.
The UK government spent a huge amount of money when they entered parliament last year into government on July 4th, 2024, and they effectively gave it to the unionized.
Bosses of the railways and other people who are already remarkably well paid overall and now she has to pay for it, so she's going to clobber entrepreneurs even harder.
She's going to try and stop people leaving the UK fiscally, and that can only aid Dubai, the United Arab Emirates, Monaco, and all the other places where British entrepreneurs go once they've been proven that they're aliens and disliked aliens in their home country.
Well, Patrick, a lot of moving parts here.
So thank you so much for giving us your perspective as always when it comes to these key points.
Uh, have a great day.
Thank you.
