Daily Brief – Chinese Tariffs

Humphrey Percy
Chairman and Founder
Wed 9 Oct 2024

Chinese Tariffs

When the EU decided to impose tariffs and restrictions on Chinese Electric Vehicles entering the EU this summer, there was little thought about the law of unintended consequences. That came home yesterday when China retaliated by requiring Brandy imports into China to be accompanied by security deposits of between 34 and 39%. Martell, Remy Martin and Hennessy are the key brands and their owners LVMH, Period Ricard and Remy Cointreau all suffered markdowns on their shares immediately of between 4 and 9%. The EV tariffs were largely to the benefit of the beleaguered German auto industry but the retaliation was meted out on the almost exclusively French brandy industry. China imports 99% of its brandy consumption and spends USD 1.7 billion each year on the digestif.

EUR/USD 1.0980.

Strait of Hormuz

The narrow channel that separates Oman and Iran in the Persian Gulf is named the Strait of Hormuz and more than 20% of the world’s oil supply is transported through it. While the threat of Israel incapacitating Iran’s oil production by bombing it is a threat, it is less to do with the 3% of the world’s oil production being curtailed. Rather the spike in the oil price is much more to do with the Strait of Hormuz being effectively closed should that threat materialise. That would prevent Saudi Arabia, Kuwait and Iraq in particular and to a lesser extent the UAE from shipping their oil. If that were to happen, the estimate of a USD 100 oil price would be both reached and breeched in short order.

Brent USD 78.67.

UK Population

It is no surprise to people living in the overcrowded South East of the UK that the population has risen sharply-this time by 1% in the past year due to net international migration to a record 68.3 million people. The Office for National Statistics are unlikely to be popular on this news especially as it was accompanied by a caveat regarding the quality of the data which makes many believe that the real figure is higher still.

GBP/USD 1.3108.

Nobu

Once again attendees at the High Court have been treated to the two best known footballer WAGs slogging it out over Rebekah Vardy not stumping up the costs awarded to her opponent Coleen Rooney. In case you have not been as gripped as we have, Coleen has notched up GBP 1.8 million in costs and Rebekah has to pay them in addition to the GBP 1 million that it is estimated that she has spent on her losing case. So there is the GBP 3 million in legals but the latest dispute centres around the reasonableness or otherwise of Coleen having to consult her barrister 30 times (GBP 500,000) and her stays at the Nobu Hotel GBP 295 each time plus some mini bar bills of GBP 225.

Still more fun than the long running Lord Alli outfitting the new government story.

EUR/GBP 0.8375.

Maggie May

This day in 1971 Rod Stewart had his first Number 1 Hit with this number which, in those days of flares and stomping in stack heels( and that was just the men) rather than dancing stuck there for 5 whole weeks having been adopted as the then yoof’s anthem.

Wake up, Maggie, I think I got somethin’ to say to you
It’s late September and I really should be back at school
I know I keep you amused, but I feel I’m being used
Oh, Maggie, I couldn’t have tried any more

You led me away from home
Just to save you from being alone
You stole my heart and that’s what really hurts

The mornin’ sun when it’s in your face really shows your age
But that don’t worry me none, in my eyes, you’re everything
I laughed at all of your jokes, my love, you didn’t need to coax
Oh, Maggie, I couldn’t have tried any more

You led me away from home
Just to save you from being alone
You stole my soul, and that’s a pain I can do without

All I needed was a friend to lend a guiding hand
But you turned into a lover, and mother, what a lover, you wore me out
All you did was wreck my bed, and in the morning, kick me in the head
Oh, Maggie, I couldn’t have tried any more

You led me away from home
‘Cause you didn’t wanna be alone
You stole my heart, I couldn’t leave you if I tried

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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