US Trade vs the World Since Donald Trump became the President of the United States in 2016, we have heard him say a lot about the "unbelievably bad" trade agreements the world’s largest economy has with some countries around the world. We have already seen Trump attempt to renegotiate the North American Free Trade Agreement (NAFTA), which has reached a deadlock, and there is a possibility of the US scrapping the decades-old agreement between Canada and Mexico. But how does the trade balance look between the US and other nations around the world?
Trade Surplus President Trump has said that "We don't have any good deals. In fact, I'm trying to find a country where we actually have a surplus of trade as opposed to... Everything's a deficit." However, there are many countries which the US has a positive trade balance with.
It’s largest trade surplus is with Hong Kong at $29.7 billion, followed by the Netherlands. The US exports reached nearly $37 billion with Hong Kong in 2017 (from January to November) with $6.9 billion worth of goods imported. However, some analysts are suggesting that Hong Kong’s trade with the US will suffer from the ongoing tensions between the two largest economies in the world.
Trade Deficit Trump has aimed some strong words towards the countries which the US has a negative trade balance with. Most of the criticism has been towards the trading relationship with China – the world’s second largest economy. He may have a point as the trade deficit stands at a whopping $344.4 billion (year-to-date).
Trump said – "With China we have close to a $500 billion trade deficit, so we have to do something. I spoke to the president, I spoke to many people — we're going to work on that very, very hard. And we're going to do things that are the proper things to do." The second largest trade deficit is with one of Americas two closest neighbours – Mexico.
Donald Trump has slated the NAFTA agreement in particular, which he has called a disaster for US manufacturing. However, since Trump was elected we have seen some big American companies move their production back to the US. Most recently Fiat Chrysler, the world’s eighth largest auto maker announced its plans to move production of its Ram heavy pickup trucks from Mexico to Michigan.
Moving production of the Ram, which is mainly sold in the US and Canada, means that Fiat Chrysler will not be paying the high import duties which are likely to apply if the NAFTA agreement is rolled back. Overall, we can see why Trump has been criticising the trading agreements with some countries around the world. But will he be able to change it during his presidency?
His current actions would suggest that the United States’ trade policies will be changing.
By
GO Markets
本文由 GO Markets 的分析師及撰稿人撰寫，內容基於其獨立分析或個人經驗。文中所表達的觀點、意見或交易風格均屬作者個人，並不代表或反映 GO Markets 的立場。任何提供的建議均屬一般性，並未考慮您的個人目標、財務狀況或需求。在採取任何行動之前，請考慮該建議是否適合您的目標、財務狀況與需求。若該建議涉及購買特定金融產品，請於作出任何決定前，先閱讀我們網站上提供的《產品揭露聲明書》（Disclosure Statement, DS）及其他法律文件。
Asia starts the week with a fresh geopolitical shock that is already being framed in oil terms, not just security terms. The first-order move may be a repricing of risk premia and volatility across energy and macro, while markets wait to see whether this becomes a durable physical disruption or a fast-fading headline premium.
At a glance
What happened: US officials said the US carried out “Operation Absolute Resolve”, including strikes around Caracas, and that Venezuela’s President Nicolás Maduro and his wife were taken into US custody and flown to the United States (subject to ongoing verification against the cited reporting).
What markets may focus on now: Headline-driven risk premia and volatility, especially in products and heavy-crude-sensitive spreads, rather than a clean “missing barrels” shock.
What is not happening yet: Early pricing has so far looked more like a headline risk premium than a confirmed physical supply shock, though this can change quickly, with analysts pointing to ample global supply as a possible cap on sustained upside.
Next 24 to 72 hours: Market participants are likely to focus on the shape of the oil “quarantine”, the UN track, and whether this stays “one and done” or becomes open-ended.
Australia and Asia hook: AUD as a risk barometer, Asia refinery margins in diesel and heavy, and shipping and insurance where the price can show up in friction before it shows up in benchmarks.
What happened, facts fast
Before anyone had time to workshop the talking points, there were strikes, there was a raid, and there was a custody transfer. US officials say the operation culminated in Maduro and his wife being flown to the United States, where court proceedings are expected.
Then came the line that turned a foreign policy story into a markets story. President Trump publicly suggested the US would “run” Venezuela for now, explicitly tying the mission to oil.
Almost immediately after that came a message-discipline correction. Secretary of State Marco Rubio said the US would not govern Venezuela day to day, but would press for changes through an oil “quarantine” or blockade.
That tension, between maximalist presidential rhetoric and a more bureaucratically describable “quarantine”, is where the uncertainty lives. Uncertainty is what gets priced first.
Source: Adobe images
Why this is price relevant now
What’s new versus known for positioning
What’s new, and price relevant, is that the scale and outcome are not incremental. A major military operation, a claimed removal of Venezuela’s leadership from the country, and a US-led custody transfer are not the sort of things markets can safely treat as noise.
Second, the oil framing is explicit. Even if you assume the language gets sanded down later, the stated lever is petroleum. Flows, enforcement, and pressure via exports.
Third, the embargo is not just a talking point anymore. Reporting says PDVSA has begun asking some joint ventures to cut output because exports have been halted and storage is tightening, with heavy-crude and diluent constraints featuring prominently.
What’s still unknown, and where volatility comes from
Key unknowns include how strict enforcement is on water, what exemptions look like in practice, how stable the on-the-ground situation is, and which countries recognise what comes next. Those are not philosophical questions. Those are the inputs for whether this is a temporary risk premium or a durable regime shift.
Political and legal reaction, why this drives tail risk
The fastest way to understand the tail here is to watch who calls this illegal, and who calls it effective, then ask what those camps can actually do.
Internationally, reaction has been fast, with emphasis on international law and the UN Charter from key partners, and UN processes in view. In the US, lawmakers and commentators have begun debating the legal basis, including questions of authority and war powers. That matters for markets because it helps define whether this is a finite operation with an aftershock, or the opening chapter of a rolling policy regime that keeps generating headlines.
Market mechanism, the core “so what”
Here’s the key thing about oil shocks. Sometimes the headline is the shock. Sometimes the plumbing is the shock.
Venezuela’s heavy-crude system: Orinoco production, key pipelines, and export/refining bottlenecks.
Volumes and cushion
Venezuela is not the world’s swing producer. Its production is meaningful at the margin, but not enough by itself to imply “the world runs out of oil tomorrow”. The risk is not just volume. It is duration, disruption, and friction.
The market’s mental brake is spare capacity and the broader supply backdrop. Reporting over the weekend pointed to ample global supply as a likely cap on sustained gains, even as prices respond to risk.
Quality and transmission
Venezuela’s barrels are disproportionately extra heavy, and extra heavy crude is not just “oil”. It is oil that often needs diluent or condensate to move and process. That is exactly the kind of constraint that shows up as grade-specific tightness and product effects.
Reporting has highlighted diluent constraints and storage pressure as exports stall. Translation: even if Brent stays relatively civil, watch cracks, diesel and distillates, and any signals that “heavy substitution” is getting expensive.
Heavy-light spread as a stress gauge: rising differentials can signal costly substitution and tighter heavy supply.
Products transmission, volatility first, pump later
If crude is the headline, products are the receipt, because products tell you what refiners can actually do with the crude they can actually get. The short-run pattern is usually: futures reprice risk fast, implied volatility pops; physical flows adapt more slowly; retail follows with a lag, and often with less drama than the first weekend of commentary promised.
For Australia and Asia desks, the bigger point is transmission. Energy moves can influence inflation expectations, which can feed into rates pricing and the dollar, and in turn affect Asia FX and broader risk, though the links are not mechanical and can vary by regime.
Some market participants also monitor refined-product benchmarks, including gasoline contracts such as reformulated gasoline blendstock, as part of that chain rather than as a stand-alone signal.
Historical context, the two patterns that matter
Two patterns matter more than any single episode.
Pattern A: scare premium. Big headline, limited lasting outage. A spike, then a fade as the market decides the plumbing still works.
Pattern B: structural. Real barrels are lost or restrictions lock in; the forward curve reprices; the premium migrates from front-month drama to whole-curve reality.
One commonly observed pattern is that when it is only premium, volatility tends to spike more than price. When it is structural, levels and time spreads move more durably.
The three possible market reactions
Contained, rhetorical: quarantine exists but porous; diplomacy churns; no second-wave actions. Premium bleeds out; volatility mean-reverts.
Escalation, prolonged control risk: “not governing” language loses credibility; repeated operations; allies fracture further. Longer-duration premium; broader risk-off impulse across FX and rates.
Australia and Asia angle
For Sydney, Singapore, and Hong Kong screens, this is less about Venezuelan retail politics and more about how a Western Hemisphere intervention bleeds into Asia pricing.
AUD is the quick and dirty risk proxy. Asia refiners care about the kind of oil and the friction cost. Heavy crude plus diluent dependency makes substitution non-trivial. If enforcement looks aggressive, the “price” can show up in freight, insurance, and spreads before it shows up in headline Brent.
Catalyst calendar, key developments markets may monitor
US policy detail: quarantine rules, enforcement posture, exemptions.
UN and allies: statements that signal whether this becomes a long legitimacy fight.
The United States entered a government shutdown on October 1, 2025, after Congress failed to agree on full-year appropriations or a short-term funding bill. Although shutdowns have occurred before, the timing, speed, scale, and motives behind this one make it unique. This is the first shutdown since the last Trump term in 2018–19, which lasted 35 days, the longest in history.For traders, understanding both the mechanics and the ripple effects is essential to anticipating how markets may respond, particularly if the shutdown draws out to multiple weeks as currently anticipated.
What Is a Government Shutdown?
A government shutdown occurs when Congress fails to pass appropriation bills or a temporary extension to fund government operations for the new fiscal year beginning October 1.Without the legal authority to spend, federal agencies must suspend “non-essential” operations, while “essential” services such as national security, air traffic control, and public safety continue, often with employees working unpaid until funding is restored.Since the Government Employee Fair Treatment Act of 2019, federal employees are guaranteed back pay to cover lost wages once the shutdown ends, although there has been some narrative from the current administration that some may not be returning to work at all.
Why Did the Government Shutdown Happen?
The 2025 impasse stems from partisan disputes over spending levels, health-insurance subsidies, and proposed rescissions of foreign aid and other programs. The reported result is that around 900,000 federal workers are furloughed, and another 700,000 are currently working without pay.Unlike many past standoffs, there was no stopgap agreement to keep the government open while negotiations continued, making this shutdown more disruptive and unusually early.
Why an Early Shutdown?
Historically, most shutdowns don’t occur immediately on October 1. Lawmakers typically kick the can down the road with a “Continuing Resolution (CR)”. This is a stopgap measure that can extend existing funding for weeks or months to allow time for an agreement later in the quarter.The speed of the breakdown in 2025, with no CR in place, is unusual compared to past shutdowns. It suggests it was not simply budgetary drift, but a potentially deliberate refusal to extend funding.
Alternative Theories Behind the Early Shutdown
While the main narrative coming from the U.S. administrators points to budget deadlock, several other theories are being discussed across the media:
Executive Leverage – The White House may be using the shutdown as a tool to increase bargaining power and force structural policy changes. Health care is central to the debate, funding for which was impacted significantly by the “one big, beautiful bill” recently passed through Congress.
Hardline Congressional Factions – Small but influential groups within Congress, particularly on the right, may be driving the shutdown to demand deeper cuts.
Political Messaging – The blame game is rife, despite the reality that Republican control of the presidency, House, and Senate, as well as both sides, is indulging in the usual political barbs aimed at the other side. As for the voter impact, Recent polls show that voters are placing more blame on Republicans than Democrats at this point, though significant numbers of Americans suggest both parties are responsible
Debt Ceiling Positioning – Creating a fiscal crisis early could shape the terms of future negotiations on borrowing limits.
Electoral Calculus – With midterms ahead, both sides may be positioning to frame the narrative for voters.
Systemic Dysfunction – A structural view is that shutdowns have become a recurring feature of hyper-partisan U.S. politics, rather than exceptions.
Short-Term Impact of Government Shutdown
AreaImpactFederal workforceHundreds of thousands have been furloughed with reduced services across various agencies.Travel & aviationFAA expects to furlough 11,000 staff. Inspections and certifications may stall. Safety concerns may become more acute if prolonged shutdown.Economic outputThe White House estimates a $15 billion GDP loss per week of shutdown (source: internal document obtained by “Politico”.Consumer spendingFederal workers and contractors face delayed income, pressuring local economies. Economic data releaseKey data releases may be delayed, impacting the decision process at the Fed meeting later this month.Credit outlookScope Ratings and others warn that the shutdown is “negative for credit” and could weigh on U.S. borrowing costs.Projects & researchInfrastructure, grants, and scientific initiatives are delayed or paused.
Medium- to Long-Term Impact of Government Shutdown
1. Market Sentiment
Shutdowns show some degree of U.S. political dysfunction. They can weigh on confidence and subsequently equity market and risk asset sentiment. To date, markets are shrugging off a prolonged impact, but a continued shutdown into later next week could start to impact.Equity markets have remained strong, and there has been no evidence of the frequent seasonal pullback we often see around this time of year.Markets have proved resilient to date, but one wonders whether this could be a catalyst for some significant selling to come.
2. Borrowing Costs
Ratings downgrades could lift Treasury yields and increase debt-servicing costs. The Federal Reserve is already balancing sticky inflation and potential downward pressure on growth. This could make rate decisions more difficult.
3. The Impact on the USD
Rises in treasury yields would generally support the USD. However, rising concerns about fiscal stability created by a prolonged shutdown may put further downward pressure on the USD. Consequently, it is likely to result in buying into gold as a safe haven. With gold already testing record highs repeatedly over the last weeks, this could support further moves to the upside.
4. Credibility Erosion
Repeated shutdowns weaken the U.S.’s reputation as the world’s most reliable borrower. With some evidence that tariffs are already impacting trade and investment into the US, a prolonged shutdown could exacerbate this further.
What Traders Should Watch
For those who trade financial markets, shutdowns matter more for what they could signal both in the short and medium term. Here are some of the key asset classes to watch:
Equities: Likely to see volatility as political risk rises, and the potential for “money off the table” after significant gains year-to-date for equities.
U.S. Dollar: With the US dollar already relatively weak, further vulnerability if a shutdown feeds global doubts about U.S. fiscal stability.
Gold and other commodities: May continue to gain as hedges against political and credit risk. Oil is already threatening support levels; any prolonged shutdown may add to the bearish narrative, along with other economic slowdown concerns
Outside the US: With the US such a big player in global GDP, we may see revisions in forward-looking estimates, slingshot impacts on other global markets and even supply chain disruptions with impact on customs services (potentially inflationary).
Final Word
The 2025 shutdown is unusual because of its scale and because it started on Day 1 of the fiscal year, without even a temporary extension. That speed points to a deeper strategic and political contribution beyond the usual budget wrangling that we see periodically.For traders, the lesson is clear: shutdowns are not just what happens in Washington, but may impact confidence, borrowing costs, and market sentiment across a range of asset classes. In today’s world, where political credibility is a form of capital, shutdowns have the potential to erode the very foundation of the U.S.’s role in global finance and trade relationships.
The US has entered the Israel-Iran war. However, despite an initial 4 per cent surge on the open, oil has settled where it has been since the conflict began in early June — around US$72 to US$75 a barrel.Trump claims the attacks from the US on Iranian nuclear facilities over the weekend are a very short, very tactical, one-off. This is something his base can get behind — some really big conservative players do not want a long-contracted war that sucks the US into external disputes.Whether this will be the case or not is up for debate, but there is a precedent from Trump's first presidency that we can look to. Iran had attacked several American bases in 2019, as well as attacking Saudi Arabia's most important oil refinery with Iranian drones. There wasn't a huge amount of damage; it was more a symbolic movement and display of capabilities by Iran.Initially, Trump didn't react — it took pressure from Gulf allies like the UAE and Israel for him to respond, which saw him order the assassination of the head of the Iranian Defence Force, Qasem Soleimani. This led to an Iranian response of ‘lots of noise’ and ‘cage rattling’, but minimal real action events, just a few drone attacks. Trump is betting on the same reaction now.If Iran follows the same patterns from the previous engagement, the geopolitical side of this is already at its peak.As of now, Iran is not going after or destroying major Gulf energy capabilities. Nor have there been any disruptions to the shipping traffic through the Strait of Hormuz. In fact, apart from a posturing vote to block the Strait, Iran has not made any indication that it is going to disrupt oil in any way that would lead to price surges.Additionally, despite the U.S. military equipment buildup in the region being its highest since the Iraq war, critical Iranian energy infrastructure is running largely unscathed.This all suggests that the geopolitics and the physical and futures oil markets remain disconnected. Oil will spike on news rumours, but the actual impacts in the physical realm to this point remain low. Of course, this could change in future. But, for now, the risk of seeing oil move to US$100 a barrel is still a minority case rather than the majority.
