Financial and Economic Brief - March 6, 2018by © Liberty Publishing, Inc.
According to Commerce Secretary Wilbur Ross, President Donald Trump's tariffs are “no big deal.” Ross said the tariffs will have a “broad” but “trivial” impact on prices. Last week, Trump announced new tariffs on aluminum and steel, igniting concerns about a possible trade war. Ross said that steel is important to U.S. national security, and that the flow of current imports are “adversely impacting the steel industry”. But not everyone close to Trump is happy about tariffs. In fact, top economic advisor Gary Cohn was unable to convince the president not to impose steel and aluminum tariffs.
Stocks Continue to Drop
The Dow Jones Industrial Average fell for the fifth straight day as concerns about a global trade war following the President’s threat to impose tariffs kept investors concerned. Trump suggested that Canada and Mexico could win exemptions to the tariffs if they sign a new NAFTA trade deal, among other things. Scott Brown, chief economist at Raymond James noted, “Some of it will get passed on to consumers in terms of higher prices... It’ll add a little bit to inflation. But I think it’s more an uncertainty.” Furthermore, First Standard Financial Chief Market Economist Peter Cardillo said, “Markets’ inability to regain confidence is likely to keep stocks defensive.”
AXA to Acquire XL Group
French insurance company AXA has reached a deal to acquire XL Group for approximately $15.3 billion. “The future AXA will see its profile significantly rebalanced towards insurance risks and away from financial risks,” AXA CEO Thomas Buberl said. AXA said the deal allows it to move toward products with “high-frequency customer contacts” and “superior technical expertise.” AXA will move ahead with the planned initial public offering of its U.S. business sometime in the first half of 2018. The companies said they expect to cut $200 million in annual costs as a result of their combination.