Tariff Plans Could Fuel Inflation

ECONOMY
Tariff Plans Could Fuel Inflation

President-elect Donald Trump’s proposed tariffs threaten to increase costs on everyday goods, from Mexican produce to Canadian lumber and Chinese electronics. With tariffs as high as 25% on Canada and Mexico, and an additional 10% on Chinese imports, prices for consumers could rise significantly, just as the country begins recovering from inflation.

Import-dependent industries like automobile manufacturing face higher costs, likely passing them on to consumers. Meanwhile, farmers and exporters risk retaliatory tariffs, further straining the economy. Analysts estimate these measures could raise U.S. consumer prices by 0.75% next year, translating to over $1,000 in lost purchasing power per household.

Economists are concerned that these tariffs could prompt the Federal Reserve to maintain higher interest rates, worsening credit and loan costs. Although Trump’s campaign rhetoric appealed to voters frustrated with trade imbalances, these aggressive measures risk disrupting global trade and harming the very consumers they aim to protect.

FINANCE
Adani Faces $55 Billion Loss

India’s Adani Group has suffered a $55 billion market value loss since U.S. prosecutors indicted founder Gautam Adani and officials on Nov. 20, alleging a $250 million bribery scheme. The charges claim Adani misled investors and bribed Indian officials for lucrative contracts.

Adani Group denies the allegations, calling them “baseless,” but the indictment triggered a massive sell-off in its stocks, causing over a 20% decline in key firm Adani Enterprises’ market value. Despite the controversy, Adani Enterprises shares rose 1.8% Wednesday.

The fallout has led to international repercussions, with Kenya canceling $2.6 billion in Adani-led projects and Sri Lanka investigating Adani's local investments. The group has faced similar crises, including a $150 billion loss in 2023 after a Hindenburg Research report accused it of fraud.

Adani Group, with interests in coal, airports, and media, remains under scrutiny as critics highlight its founder’s close ties to India’s Prime Minister Narendra Modi.

LVMH
Who Will Succeed Bernard Arnault?

LVMH founder and CEO Bernard Arnault, 75, recently extended his retirement age to 80, raising questions about who will eventually succeed him at the helm of the world’s largest luxury conglomerate. Arnault, one of the globe’s wealthiest individuals, received a letter from 93-year-old Warren Buffett, who humorously remarked that setting 80 as a retirement age was too early.

With LVMH’s vast influence as a €92 billion ($100 billion) empire, speculation about Arnault’s successor runs high. His five children, all involved in the business, fuel comparisons to Succession. Delphine, 49, chairs Christian Dior Couture; Antoine, 47, oversees LVMH’s image and environment; Alexandre, 32, is EVP at Tiffany & Co.; Frédéric, 29, leads Tag Heuer; and Jean, 25, directs watch strategy.

Despite the anticipation, Arnault insists the jury is still out. With family ties strong and leadership reshuffles underway, the luxury giant’s future remains one to watch.

Word of the day
Cantilever

A cantilever is a girder or beam that supports a bridge or another large structure. Cantilevers are attached only at one end, like a rigid diving board.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.