Tolls to Trade: Trump flips on 20% toll tax

**Charlene Young** (0:09)
Hello, and welcome to the latest episode of the AJ Bell Money & Markets podcast. I'm Charlene Young.

**Danni Hewson** (0:15)
And I'm Danni Hewson.

**Charlene Young** (0:17)
Coming up this week, we'll be looking at the latest twists and turns in the oil market, and what US plans for the Strait of Hormuz could mean for global supply chains.

**Danni Hewson** (0:26)
We will also take a closer look at the US economy, where banks have delivered a storming set of results, and headline inflation appeared to have been moving in the right direction, but of course, scratched beneath the surface, and the picture for American households is far less encouraging. We'll be asking what it means for the Federal Reserve and the outlook for interest rates.

**Charlene Young** (0:48)
Back on this side, the Atlantic, Rachel Reeves has delivered what is likely to be her last Mansion House speech, and we'll also bring you a quick update on EasyJet after development since our discussion last week. Sadly, the UK hidden gem we were lined up to discuss in our interview is in the process of being snapped up before we could get them in the studio.
Perhaps we're becoming victims of our own success here, hey?

**Danni Hewson** (1:11)
Thankfully, we have Tom Sieber joining us to talk through the latest edition of Shares magazine plus IBM's latest update and what it tells us about the state of technology spending. In the world of media, the mega Paramount-Warner Bros deal faces legal challenges in the United States.

**Charlene Young** (1:30)
We'll also be discussing encouraging signs from the recruitment sector with PageGroup and Hays enjoying positive reactions from investors who think the worst could finally be behind them. And we have news from Marks & Spencer and a window into the impact of TikTok.

**Danni Hewson** (1:46)
On the personal finance front, mortgage rates are falling at their fastest pace in almost two years.
Charlene, I know you've been busy digging through the latest HMRC income tax data. And if you're heading abroad this summer, there's some fresh figures showing how far your holiday spending money might stretch compared to last year.

**Charlene Young** (2:07)
So four packed episode there to kick us off. And we've got another kind of taco move from President Trump, this time in the form of a planned 20% toll, which I gather is no longer happening. Danni, please explain what's the latest on the Strait of Hormuz and why does it matter to our audience?

**Danni Hewson** (2:26)
Yeah, in usual Donald Trump style, he took to Truth Social with a post saying, we are going to give safe passage to vessels going through the Strait of Hormuz. However, in order to do that, we are going to demand a 20% safe passage fee, so 20% of the value of the cargo that is being hauled through. There have been a lot of questions about how that might work, how that might then impact inflation numbers. Of course, there had been a lot of talk before that about the fact that Iran might want to look to introduce some kind of a toll on people using the Strait of Hormuz. But Donald Trump came out and said that the US was going to do it, and just 24 hours after that, he said, no, no, no, no, we're not going to do that at all. In fact, what we're going to do is we're just going to ask for a lot of Gulf states to continue to invest in the United States. But clearly, the fact that we have renewed fighting between the United States and Iran, we've got the Strait of Hormuz blocked, we've got the US blockade of said Strait of Hormuz, but also clearly as things have escalated, we're just not seeing any vessels getting in or out, which creates another logjam. While we have all of this fighting, of course, that does impact then on the oil price. I was just taking a look back to the start of July, when a barrel of Brent crude, which of course is the global benchmark, was just $71.57.
Today, when I looked a couple of hours ago, it was $85.45 and in fact, more than $10 added since Monday. We saw markets really initially being like, we're used to volatility, it's going to be okay, they'll get back around the table. Gradually, as the days have progressed and we've had more and more comments from Donald Trump, the latest saying, right, unless Iran gets back around the table, we are going to bomb power plants and bridges. Once again, those threats and markets have then begun to react more forcefully to that.
It feels like Donald Trump is trying to come up with ideas which will maybe shock Iran back to the negotiating table. He clearly wants to get this done and dusted behind him. It's a very unpopular war in the United States. It is impacting the United States consumer. However, he also doesn't want to come away from this conflict. Without at least being able to say that any deal that is done with Iran is better than the deal that Barack Obama struck with Iran back in 2015, which Donald Trump then of course tore up.