29 Sept 2025
Mexico faces intense US pressure to impose significant tariffs on Chinese goods, prompting China to consider retaliatory actions amidst a doubling of its exports to Mexico since 2016. Concurrently, gold and silver continue their strong upward trend, influenced by geopolitical instability, US inflation, and expectations of central bank policy shifts, while the UK economy experiences a stagnant Q3 start with unchanged GDP and declining industrial output.
Mexico, under considerable US pressure, plans to impose tariffs of up to 50% on Chinese vehicles and other products from China and certain Asian exporters. China's exports to Mexico have doubled since 2016, partly because Chinese companies relocated operations to Mexico to bypass US tariffs, leading China to consider retaliatory measures, potentially targeting Mexican copper and copper concentrate.
Gold prices surpassed $23650 per ounce, showing a nearly 2% weekly growth, while silver also surged past $42, reaching its highest level since 2011. This growth is driven by expectations of interest rate reductions, US political interference with the Federal Reserve, global trade policy disruptions, rising US inflation at 2.9% annually, and the perception of precious metals as anti-inflationary assets.
The UK economy remained stagnant in July, marking a weak start to the third quarter, with Gross Domestic Product (GDP) virtually unchanged and the services sector showing no growth. Industrial production experienced a significant 0.9% decline, largely offsetting minor growths of 0.1% in consumer-facing services and 0.2% in construction.
UK consumers and businesses face mounting pressure from increased taxes, with the prospect of further increases in the autumn budget, alongside stagnant real wages and no significant improvement in living standards. Companies must contend with rising taxes and minimum wage increases, while consumers anticipate further tax hikes, contributing to a challenging financial environment.
UK goods exports to the US improved by £800 million month-on-month, primarily in chemicals, machinery, and transport equipment, although they remain below pre-April 2023 tariff levels. Imports from the US decreased, contributing to a £400 million increase in the UK's overall trade deficit over the last three months.
The Trump administration's attempts to expand its influence over the Federal Reserve, including legal efforts to prevent the removal of Lisa Cook from a September 16 meeting, are seen as contributing factors to the observed increases in gold prices.
Gold continues its upward trajectory due to global trade policy disruptions, rising US inflation, geopolitical instability, and its appeal as a safe-haven asset, driving sustained investor demand.
| Topic | Key Insight | Impact |
|---|---|---|
| US-Mexico-China Trade Tensions | Mexico plans up to 50% tariffs on Chinese goods under US pressure. | China considers retaliation, with its exports to Mexico having doubled since 2016 due to tariff circumvention. |
| Gold Market Performance | Gold prices exceeded $23650/ounce, experiencing a nearly 2% weekly growth. | Driven by rate cut expectations, US political tensions with the Fed, global trade disruptions, and rising US inflation. |
| Silver Market Performance | Silver surged past $42/ounce, reaching its highest level since 2011. | Moves in tandem with gold, benefiting from similar macroeconomic and geopolitical drivers. |
| UK Economic Stagnation (July) | UK GDP remained unchanged in July, marking a weak start to Q3. | Services sector showed no growth, and industrial production significantly declined, offsetting minor gains in other sectors. |
| UK Economic Pressures | Consumers and businesses face high taxes and potential further increases. | Stagnant living standards and real wages persist despite inflation, creating pressure for stronger economic growth. |
| UK Trade with US | Goods exports to the US increased by £800 million in July. | Primarily in chemicals and machinery; still below pre-tariff levels. The overall trade deficit worsened by £400 million. |
