TRADE WAR TRUCE WORLD ECONOMY SHAKEN

● Tariff Tsunami Relief

2024 US-China Mega Tariff Reduction Agreement: Complete Analysis of Market Shock and Global Economic Impact

This article details the background of the dramatic agreement between the US and China on large-scale tariff reductions, the major policy decision-making processes, and the economic impact of the negotiations on the market.
It covers the dramatic gap between market expectations and reality, Trump's change in stance, the economic landscape changes that will occur over the next 90 days, and the strategic implications for global trade and investment markets.
It is highly recommended not to miss this opportunity to see at a glance what opportunities and risks the latest trade policy changes provide for businesses, investors, and consumers.

1. Key Trends in US-China Tariff Policy Changes

Past Trends of the Tariff War
Since the trade war in 2018, the US has imposed tariffs of 145% on Chinese products, and China has imposed retaliatory tariffs of 125% on US products.
This has led to severe economic repercussions, including disruptions to the global supply chain and sharp increases in raw material and finished product prices.
The prolonged trade dispute has significantly shaken the global competitiveness of various industries, including manufacturing, IT, semiconductors, and consumer goods.
Unprecedented Expectations from the Swiss Talks
Recently, representatives from both countries held closed-door negotiations in Switzerland.
In the global financial market, there was a high expectation that "even a reduction of tariffs from 145% to 50% would be a huge success."
However, figures like Trump in the US political circles have taken a cautious stance, saying, "Even if it's reduced a little, 80% wouldn't be bad."

2. Radical Agreement Results: 30% vs 10% Tariffs

Details of the Agreement
Finally, in early June 2024, the US announced that it would drastically reduce tariffs on Chinese products from 145% to 30%, and China would reduce tariffs on US products from 125% to 10%.
The agreement maintenance period is initially limited to 90 days. (There is also talk of permanent extension after the agreement.)
Market Reaction
Economic experts and Wall Street have hailed it as an "unprecedented surprise."
Major stock markets, commodities, and global trade stocks have begun a rally.
Major US and Chinese corporations, global logistics companies, and small and medium-sized manufacturing IT companies are all rapidly seeking countermeasures.

3. Impact & Outlook on the Global Economy

Normalization of Trade & Supply Chain Restoration
The tariff reduction is expected to resolve supply chain disruptions and uncertainties.
Manufacturing costs are expected to fall, and finished product prices are expected to stabilize.
Countries exporting intermediate goods, such as Korea, Europe, and ASEAN, are also expected to benefit.
Price/Inflation Stabilization Effect
Until now, rising raw material costs due to tariffs → rising prices have become the new normal of global inflation.
The tariff reduction is expected to alleviate price pressures in the US, China, and globally.
The burden of interest rate hikes by central banks may also be eased in the short term.
Investment/Stock Market Changes
Changes in global investor asset preferences are possible.
Major US and China-related stocks, export companies, and resource stocks are expected to benefit.
In particular, interest in Korean KOSPI and KOSDAQ, and emerging market investment products is rebounding.
Policy Uncertainty Remains
However, whether to extend the 90-day temporary agreement after three months will be determined based on the political situation in both countries.
Full-scale trade normalization is highly volatile, with its direction changing in conjunction with political events such as the presidential election.

4. Future Strategies and Implications

Checklist for Businesses and Investors
Logistics, procurement, and production strategy reviews are essential.
Diversification of intermediate and raw material sourcing, management of exchange rate risk, and seeking opportunities to enter new markets are essential.
A strategy to secure inventory within the short-term tariff reduction period should be established.
Implications of Global Negotiations
It has become clear that the entire market landscape can change with just one agreement in a major trade dispute.
Real-time monitoring of trade policies, global economic trends, and stock market volatility is necessary.
Attention should also be paid to trade policy changes in major economic blocs such as Europe and India in the future.

< Summary >
The US and China reach a dramatic agreement on unprecedented tariff reductions at the Swiss talks.
Significant reduction in tariff rates (145→30%, 125→10%).
Temporary for 90 days, but simultaneous changes in global supply chains, prices, and investment markets.
Positive impact on economic blocs in three or more countries, including Korea, but political risks remain.

2024 US-China Tariff Reduction to Change the Global Trade Landscape

Unprecedented Trade War Eased, Changes in Tariffs, Global Supply Chain, and Stock Market

The US and China take drastic action to drastically reduce tariff rates in a surprise agreement.
A major turning point in the global economy, stock market, and trade war trends.
Temporary for 90 days, but immediate effects on supply chain normalization and inflation relief.
Small and medium-sized enterprises, large corporations, and investors all need to review procurement and investment strategies.
This tariff agreement presents both risks and opportunities for the global economy.

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● Rich DNA-Simple, John Lee.

The Korean Economy and Financial System, and the Future of Wealth: Summary of CEO John Lee’s Discussion

🧭 Key Points Covered in This Article

– Diagnosis of the Korean economic structure and its problems amid the economic recession
– Social costs caused by the lack of financial education and investment culture
– Analysis of the reasons for the difference in economic growth between the United States and Korea
– Reasons why asset management and the financial industry need to be fostered
– Directions for improving the financial system to secure innovation and growth engines

1. Key Diagnosis of the Korean Economic Situation in 2024~2025

– The economy has been difficult for the past 5 months, but there are not only disadvantages.
– The biggest problem with the Korean economy is “lack of diversity.”
– Labor and capital cannot move creatively and are concentrated in the same industries (restaurants, karaoke rooms, etc.).
– The economic crisis is a result of a lack of diversity.
– A lot of money and manpower are concentrated in areas with low added value.
– Economic structural reform is essential, and the core of it is “strengthening the financial ecosystem.”

2. The Absence of Financial Education and Its Social Consequences

– Korea lacks groundbreaking education on ‘money’ and ‘finance’.
– Core financial knowledge such as stock investment, retirement preparation, and retirement pensions is not spread throughout society.
– Due to the education culture of memorizing only the correct answers from childhood, they are only immersed in number competition.
– Job concentration such as ‘Just become a doctor’ lowers future diversity and innovation capabilities.
– Many people in their 60s and older regret and start studying finance late.
– Other ethnic groups, such as Jews, have an ‘urgency’ about the importance of money inherent in their lives.
– Social problems such as Korea’s low birth rate, wealth gap, and high suicide rate are also linked to “financial illiteracy.”

3. Don’t Hate the Rich: Perceptions of Wealth and Investment Mindset

– Socially, there is a lack of positive discourse about wealth or becoming rich.
– The goal is not to study well and “become rich”, but study itself becomes the goal.
– Starting investment early (e.g., children’s investment) makes a big difference with the compounding effect.
– What’s more important than ‘What stock to choose’ is ‘How early’ you started.
– Instead of spending 1.5 to 2 million won on English private education and early education, rolling it with long-term investment can generate 7 billion won↑ with compound interest.
– Parents, schools, and society are all suffering from ‘financial illiteracy’.

4. The Case of the U.S. Economy and Financial Market: Where Did the Growth Engine Come From?

– The U.S. introduced retirement pensions (ERISA Act) in 1975 and created a structure to increase the assets of all citizens through mandatory stock investment of 10% of their salary.
– As the stock market ecosystem grew, innovative companies (Google, Nvidia, etc.) appeared.
– Korea and Japan have been slow to develop the financial industry: national assets are concentrated only in real estate.
– The U.S. GDP growth rate is around 2.5~3%, while Korea’s is in the 1% range (structural low growth).
– Looking at asset allocation, most Koreans are concentrated in real estate, lacking diversity such as financial investment.

5. Why Innovation in Asset Management and the Financial Industry Is Necessary

– U.S. asset management companies (BlackRock, Blackstone, etc.) and corporate finance ecosystems support innovative corporate growth.
– Korean financial institutions are still centered on banks/insurance companies, and asset management companies are ‘peripheral’.
– Innovative companies can only grow through idea/knowledge-based investment instead of collateral.
– Absolute necessity for financial innovation infrastructure such as asset management companies and venture capital.
– Even within leading domestic companies (Samsung financial affiliates, etc.), the asset management part is too small.
– It is difficult for companies like Google and Nvidia to emerge in Korea without the power of finance.

6. Tasks for Improving Laws, Policies, and Systems

– Need to be much more open to the entry of foreign financial capital and institutions than now.
– Global financial hubs such as Singapore and Hong Kong allow foreign institutions to operate freely.
– The Korean financial industry hinders foreign entry and growth due to foreign investment regulations, labor laws (strict working system such as 52 hours), and low flexibility.
– Retirement pensions also need to be reorganized around asset management companies, not insurance companies.
– Urgent need to improve the structure so that young people, entrepreneurs, and SMEs can easily receive investment.

7. Directions for Becoming a Financially Advanced, Innovative Nation

– The financial industry is the industry that can best utilize the strengths of Koreans.
– The growth engine of the Korean economy after 2025 depends on strengthening wealth and financial education, and innovating asset management and entrepreneurial finance.
– Only a financial-centered innovation ecosystem can achieve long-term growth, new jobs, and resolution of social disparities.

Even amidst complexity, the Achilles heel of the current Korean economy is clear.
The long-term absence of financial education and the lack of a financial ecosystem that supports entrepreneurship and innovation have been holding back social and national growth.
Sustainable growth, and solutions to various social problems all need to be found in economic keywords such as “financial industry,” “innovation ecosystem,” “asset management,” and “long-term investment.”
From now on, breaking free from financial illiteracy and encouraging an investment culture of “Let’s all get rich together” is the real starting point of wealth.

2025 Korean Economic Outlook: Financial Education, Asset Management Innovation, and Conditions for Future Wealth

Explanation of the core causes of Korean economic structural problems and low growth
Emphasis on the need for a lack of financial education, asset concentration, and a long-term investment culture
Concrete diagnosis of success stories of the U.S. economy and financial market, and policy implications
Presentation of directions for fostering the financial industry such as asset management companies and venture capital
Summary of foreign investment attraction, regulatory improvement, and growth engine expansion plans for financial advancement

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