• Mexico's government may look for other trade partners, the nation's president said on Wednesday, after the United States slapped tariffs on its southern neighbour. President Claudia Sheinbaum said that Mexico could shift trade alliances "if necessary," referring to the possible continuation of the tariffs.
• S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with fresh duties on Chinese goods, standing to seriously alter supply chains and long-standing trade partnerships.
• Sheinbaum is tentatively set to have a phone call on Thursday with the U.S. leader about the tariffs, she said in her daily morning press conference. If the tariffs continue after that, Mexico "will reach out to Canada and other nations," Sheinbaum noted. "It is a very definitive moment for Mexico," Sheinbaum said. "Our economy is fine, but there will be no submission. ... Depending on the circumstances, we will look to Canada and other countries."
• The Mexican peso slightly strengthened by 0.84% on Wednesday to 20.41 per U.S. dollar. In an appeal to Mexican national pride, Sheinbaum has called for a rally on Sunday in Mexico City's historic Zocalo square where she will outline her response to the United States, which she said would include retaliatory tariffs.
• S. Commerce Secretary Howard Lutnick said on Wednesday that an announcement on tariffs could come later in the day, hinting at possible relief for some sectors such as automobiles. The auto sector stands to take a heavy hit from tariffs, with parts typically crossing the border several times as cars are assembled. The United States imported $181.4Bn in autos and auto parts from Mexico in 2024, representing nearly 10% of Mexico's economy, according to Goldman Sachs.

(Source: Reuters)

• Trinidad and Tobago need to put proper policies in place to transform the foundations of the Carnival activities, underwriting their evolution into a competitive industry in the global marketplace. This is the advice from economist Dr Vanus James following comments made by Prime Minister Keith Rowley who described the heavy foreign exchange expenditure on Carnival costumes as “absolute foolishness.”
• Rowley who made the statements while speaking at Wednesday’s sod-turning ceremony for Nutrimix’s animal feed and pet food plant on the Point Lisas Industrial Estate, said costumes should be locally sourced.
• Meanwhile, Dr Marlene Attzs, a development economist, also agreed that the Carnival “business model” must also be redesigned so it becomes a net earner of forex rather than a forex drain. Attzs further advised that while the discussion on the use of scarce forex for importing Carnival materials is important, the issue should not be viewed in isolation. Moving forward, she said T&T must rethink its consumption habits, reduce dependence on imports, and acknowledge the reality of dwindling foreign exchange supply. “Without strategic interventions, we risk deepening the crisis and further eroding our economic stability,” she added.
• In its November 2024 Monetary Policy Report, the Central Bank highlighted those purchases of foreign exchange by authorised dealers (supply) from the public amounted to US$3.72Bn from January to October 2024, a 0.7% decrease relative to the same period a year earlier. The marginal decrease in purchases followed a 0.3% rise in conversions by energy companies compared to the same period in 2023. Between January to October 2024, purchases from the energy sector accounted for 72.7% of total foreign currency purchases over US$20,000 in value.
• Sales of foreign exchange by authorised dealers to the public (demand) reached US$4.92 billion over January to October 2024, a 5.7% decrease relative to the same period a year prior.
• Based on reported data for transactions over US$20,000, credit cards (43.7%), energy companies (17.1%), retail and distribution (15.8%), and automobile companies (5.3%) made up the bulk of foreign exchange sales by authorised dealers to the public. The net sales gap reached US$1.20Bn during the period. To support the market, the Central Bank sold US$1,075.0Mn to authorised dealers.

(Source: The Trinidad & Tobago Guardian)

• A divided U.S. Supreme Court declined on Wednesday, March 5, to let President Donald Trump's administration withhold payment to foreign aid organisations for work they already performed for the government as the Republican president moves to pull the plug on American humanitarian projects worldwide.
• Handing a setback to Trump, the court, in a 5-4 decision, upheld Washington-based U.S. District Judge Amir Ali's order that had called on the administration to promptly release funding to contractors and recipients of grants from the U.S. Agency for International Development and the State Department for their past work.
• Chief Justice John Roberts and fellow conservative Amy Coney Barrett joined the court's three liberal members to form a majority in rejecting the Trump administration's request. Conservative Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh dissented from the decision.
• The order by Ali, who is presiding over an ongoing legal challenge to Trump's policy, had originally given the administration until February 26 to disburse the funding, which it has said totalled nearly US$2Bn that could take weeks to pay in full.
• Roberts paused that order hours before the midnight deadline to give the Supreme Court additional time to consider the administration's more formal request to block Ali's ruling. The Supreme Court's 6-3 conservative majority includes three justices Trump appointed during his first presidential term.
• The court did not provide a rationale for its unsigned order on Wednesday. With the original deadline now lapsed, the court instructed Ali to "clarify what obligations the government must fulfil to ensure compliance with the temporary restraining order, with due regard for the feasibility of any compliance timelines."
• Ali has a hearing scheduled for Thursday at the request of the plaintiffs for a preliminary injunction. The judge has a temporary restraining order currently in place that lasts until March 10.

(Source: Reuters)

• U.S. services sector growth unexpectedly picked up in February, and prices for inputs increased, which, combined with a recent surge in the cost of raw materials at factories, suggested that inflation could heat up in the months ahead.
• Rising price pressures could be worsened by a trade war triggered by President Donald Trump's new 25% tariffs on imports from Mexico and Canada, which took effect on Tuesday, March 4, along with a doubling of duties on Chinese goods to 20%.
• The Institute for Supply Management (ISM) said on Wednesday, March 5, that its non-manufacturing purchasing managers index (PMI) climbed to 53.5 last month from 52.8 in January. Economists polled by Reuters had forecast the services PMI dipping to 52.6.
• A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM associates a PMI reading above 49 over time with expansion in the overall economy.
• The PMI pointed to resilience in domestic demand but was at odds with so-called hard data, including consumer spending and homebuilding, that have suggested a sharp slowdown in gross domestic product this quarter.
• With the goods trade deficit deteriorating sharply in January, largely blamed on the front-loading of imports ahead of tariffs, the Atlanta Fed is currently forecasting GDP contracting at a 2.8% annualized rate this quarter. The economy grew at a 2.3% pace in the fourth quarter.
• The ISM survey's new orders measure rose to 52.2 last month from 51.3 in January. That helped to lift its gauge of prices paid for services inputs to 62.6 from 60.4 in January. The ISM reported on Monday that its measure of prices paid by factories jumped to nearly a three-year high in February.

(Sources: Reuters)

• 1Great Studios (1GS) generated J$35.68Mn in earnings for the financial year ended December 2024 (FY2024), 54.88% lower than in FY2023 amid lower revenues. Revenues came in at J$342.20Mn, 25.75% lower than in 2023 reflecting a 39.0% decline in its SEO business line that offset a combined 19.0% growth in all other business lines.
• The impact of the underperformance in the company’s revenues on operating profits was exacerbated by a slower pace of reduction in cost of sales and higher operating expenses. Cost of sales fell just 12.9%. Operating expenses increased by 10.27% to J$87.43Mn driven by material increases in salaries, wages and related costs, advertising and promotion expenses. As a result, 1GS’ operating profit of J$47.41Mn was more than half its FY2023 figure.
• Non-operating costs softened the blow. Interest expense and taxation charges were markedly lower at 86.62% and 91.30% respectively, reflecting the benefits of tax exemptions from listing on the Junior Market, along with proceeds from its IPO, which helped reduce debt and interest expenses. Nonetheless, this was inadequate to offset the lower revenue and sticky operating costs. As a result, earnings fell to J$35.68Mn.
• Notwithstanding the not-so-great FY2024 profits, management remains optimistic about the company’s ability to leverage its expertise and services to drive shareholder value. Given new trends within the industry, 1GS continues to diversify its product and service offerings and other revenue streams including Web & App development, which followed as the second-largest segment. Meanwhile, strategically significant yet smaller segments, Digital, Branding & Creative, and Video Production, continued to play a vital role in the company’s diversified service portfolio.
• 1GS’s stock price has decreased by 32.35% since the start of the 2025 calendar year and has lost 54.0% of its market value since being listed in September 2023. The stock closed Monday’s trading session at $0.46.

(Source: 1GS & NCBCM Research)

• Jamaica’s Business Process Outsourcing (BPO) sector has recorded phenomenal growth over the past four decades, transforming from a modest operation in the Montego Bay Free Zone to a sprawling industry encompassing over three million square feet of space islandwide.
• According to Vice President, BPO and Logistics, Port Authority of Jamaica (PAJ), Gloria Henry, this expansion has been fuelled by increasing private sector investment and strategic stakeholder vision to position Jamaica as a key player in the global logistics hub.
• The shift from public to private sector dominance has been a key driver of this growth. Up to 15 years ago, the public sector, through the PAJ, was the primary provider of BPO space. The private sector now accounts for 67% of the space occupied, a testament to the industry’s increasing attractiveness and potential.
• The PAJ has been pivotal in catalysing the BPO industry, facilitating its transition from traditional box processing to higher-value services.
• Meanwhile, Jamaica is being strategically positioned to capitalise on the $1.5Tn third-party logistics (3PL) space. The Cayman Special Economic Zone (SEZ¹) is expected to play a significant role in this endeavour, leveraging the synergies between BPO and 3PL. Given its proximity to Jamaica and its attractive tax incentives, the SEZ serves as a strategic hub for linking Jamaica’s BPO sector to the 3PL industry. By providing high-value support services, the SEZ acts as a regional enabler that can strengthen and expand Jamaica’s BPO operations.
  _________________________________
  ¹The Cayman Special Economic Zone (SEZ) is a designated area within the Cayman Islands that offers attractive incentives for international businesses to set up a physical presence, allowing them to operate essentially tax-free and with streamlined processes, primarily focused on attracting companies in sectors like technology, media, and financial services.

(Source: JIS)

• U.S. Treasury Secretary Scott Bessent said on Friday that Mexico has proposed matching U.S. tariffs on China in a move that he described as "very interesting" and one that Canada should match.
• Top Mexican officials have met with members of Trump's cabinet this week for trade talks ahead of a March 4 deadline, when U.S. President Donald Trump's proposed tariffs on Mexican and Canadian imports are set to get into effect alongside an additional 10% duty on Chinese imports. The Mexican and Canadian governments did not immediately respond to requests for comment. The Chinese embassy in Washington said unilateral tariff hikes by the U.S. severely violate World Trade Organization rules and harm the interests of China, the U.S. and the world.
• Embassy spokesperson, Liu Pengyu highlighted that pressuring, coercion and threat are not the right way to deal with China. Instead, mutual respect is the basic prerequisite. Bloomberg, citing a person familiar, has reported that the proposed tariffs by Mexico on China would focus on cars and auto parts. The move is likely a response by Mexico City to avoid a looming 25% tariff by the United States on Mexican goods.
• Mexican President Claudia Sheinbaum's administration has said for months that it is carefully considering Washington and Ottawa's policies towards China, saying even before Trump's reelection that it sought to be "more aligned" in addressing potential unfair Chinese trade practices.
• Mexican Deputy Economy Minister Vidal Llerenas noted that Mexico could adopt further trade measures beyond tariffs it has slapped on cheap goods mostly from China, including counterfeit products, which had entered under previous low-cost exemptions known as "de minimis."

(Source: Reuters)

• Barbados Chamber of Commerce and Industry (BCCI) head James Clarke has called for urgent reforms to address persistent delays at the Bridgetown Port, warning that inefficiencies are stifling business operations and undermining the country’s economic growth.
• Clarke called for urgent action to streamline port logistics, reduce bureaucratic red tape, and modernise trade and investment policies to position Barbados as a more competitive global player. The BCCI president said port bottlenecks remain one of the most pressing concerns for the local business community, highlighting frustrations over costly delays and inefficiencies that have plagued importers and exporters alike.
• These issues, he stressed, must be addressed as part of a broader strategy to improve the ease of doing business in the country. “Delays at the port continue to affect our business community, impacting supply chains and creating unnecessary hurdles for trade,” Clarke added.
• Addressing an audience of business leaders and policymakers, Clarke outlined the chamber’s agenda for 2025, identifying regulatory reform, digital transformation, and business advocacy as key priorities. He said the chamber would continue working closely with the government and social partners to implement policies aimed at reducing bureaucracy, modernising business practices, and making Barbados a more attractive destination for investment.

(Source: Barbados Today)

• Canadian manufacturing activity contracted for the first time in six months in February as an uncertain trade outlook led to firms turning the most pessimistic since the start of the COVID-19 pandemic.
• The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to 47.8 from 51.6 in January, its first move below the 50.0 no-change mark since August. A reading below 50 indicates a contraction in the sector.
• Output fell noticeably, driven lower by a steeper decline in new orders as product markets, both in Canada and abroad, were paralysed by concerns over the applicability and size of tariffs in the coming months. The output index fell to 47.5 from 52.3 in January, and the new orders index was at 45.4, its lowest level since July.
• U.S. President Donald Trump has proposed 25% tariffs on Mexican and Canadian goods that are due to go into effect on March 4. Canada sends about 75% of its exports to the United States.
• "Understandably, manufacturers grew increasingly downbeat about the future ... This meant firms also adopted an increasingly cautious approach to purchasing and employment," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. The measure of future output fell to 48.5 from 57.1 in January, marking the second-lowest level in survey data going back to July 2012. April 2020 was the only month when sentiment was weaker.
• A stronger U.S. dollar and suppliers adjusting prices in anticipation of tariffs contributed to increased input prices, S&P Global said. The input price index was at 58.9, its highest level since April 2023. The Bank of Canada has worried that tariffs could raise inflation even as they reduce prospects for economic growth.

(Source: Reuters)

• With less than two weeks before a March 14 deadline, Republicans and Democrats in the U.S. Congress appear to be nowhere close to a deal to avert a government shutdown that would throw Washington into deeper turmoil. The talks have been complicated by President Donald Trump, who has ignored spending laws passed by Congress, suspended foreign aid and fired tens of thousands of federal workers.
• Both sides say his actions are the biggest sticking point as they seek to reach a deal that would provide government funding beyond March 14, when it is due to expire. Democrats say they are trying to secure guarantees that would prevent Trump and his budget-slashing point person, billionaire Elon Musk, from firing more workers or cancelling more government programs. Republicans say Democrats are trying to undo Trump's actions, which they call a nonstarter.
• The spending deal only covers a portion of the budget, funding agencies like the Department of Defense and the Environmental Protection Agency. It would not address the country's rising borrowing costs or rapidly growing benefit programs like Social Security and Medicare.
• Republicans are separately pushing to extend the tax cuts that Trump signed into law in 2017. One version, which narrowly passed the House last week, would cut taxes by $4.5Tn and reduce spending by $2Tn over a decade. Independent analysts say that would further add to the nation's $36Tn debt load.
• Failure to reach a spending deal by March 14 would force the government to furlough hundreds of thousands of workers and shutter "nonessential" operations, such as financial regulation and trash pickup at national parks.
• The last government shutdown was also the longest, ending in January 2019 after 35 days, as Trump, during his first term in office, and lawmakers clashed over his effort to build a wall along the U.S.-Mexico border. With no clear resolution in sight, lawmakers have already begun pointing fingers.

(Sources: Reuters)