BN Daybreak Tues 24 Feb - Global Tariffs, AI Shockwaves, and SA’s R50bn Budget Windfall

Today’s BizNews Daybreak, hosted by Alec Hogg, covers sweeping international developments, market-rattling AI advancements, and crucial South African economic updates. Here is a breakdown of the key stories:Global Tariffs & Geopolitics: The White House is preparing a formal directive to increase the global tariff rate to 15%. Additionally, tensions between the US and Iran remain high, with the primary risk being the potential blockage of oil delivery from the Gulf Coast, which could push oil prices to $100.AI Disruptions & Market Moves: IBM shares tumbled 13% after Anthropic announced that its Claude code tool can modernize the Cobalt software language. This AI disruption led author Nassim Taleb to warn of impending software bankruptcies. On the M&A front, Paramount raised its all-cash bid to buy Warner Bros Discovery to $30 a share.Gold & Crypto: Gold surged 3% overnight to reach $5,250 an ounce. In contrast, Bitcoin lost 4%, dropping to $63,500.UK Political Scandal: UK police arrested Peter Mandelson, the former British ambassador to the US, on suspicion of misconduct in public office. This arrest follows the release of emails allegedly showing him forwarding government information to Jeffrey Epstein.South Africa's Budget Windfall: Finance Minister Enoch Godongwana will present the national budget with an estimated R50 billion windfall in additional revenue, driven by high gold and platinum commodity prices. Economist Dawie Roodt advises using these funds to cut corporate taxes and adjust personal income tax brackets, warning heavily against using the surplus to increase government spending.Local Parliamentary Inquiries: The ad hoc committee investigating police and political capture has drawn heavy criticism. Ian Cameron expressed disappointment, stating the proceedings resembled a "soap opera" driven by TikTok likes instead of serious questioning..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.Global Markets: AI Disruptions and Tariff TurmoilEquity markets retreated as a new wave of uncertainty hit US trade policy. Following the Supreme Court’s decision to strike down President Trump’s emergency tariffs, the White House is reportedly drafting a directive to raise the global tariff rate to 15%. Amidst this, FedEx has filed a lawsuit seeking a refund for invalidated levies.In the technology sector, IBM shares plummeted 13% after Anthropic announced a tool capable of modernising the COBOL software language—the backbone of IBM’s mainframe business. Conversely, Nvidia remains a beacon of optimism ahead of its earnings report, with analysts viewing the results as a "make or break" moment for Big Tech.Renowned author Nassim Taleb, however, warns that the current market rally is fragile. He predicts a wave of bankruptcies for software companies and suggests that current volatility does not yet reflect the "real risks" of global debt and "tail risks".Geopolitical Brinkmanship: The Iran DeadlineThe threat of a major conflict in the Middle East looms as a Thursday deadline approaches for Iran to soften its nuclear and military stance. Intelligence experts note a military buildup in the region not seen since 2003.Taleb warns that a disruption of oil flow from the Gulf Coast could see prices spike to $100 per barrel, potentially triggering 1970s-style stagflation that monetary policy alone cannot fix. Currently, gold has surged 3% to $5,250 an ounce as investors seek safe havens, while Bitcoin has slipped to $63,500.The UK: A Confidant in CrisisIn the UK, the government faces a deepening crisis following the arrest of Peter Mandelson. The former ambassador and confidant to Prime Minister Keir Starmer is under investigation for misconduct in public office after US Department of Justice emails allegedly linked him to Jeffrey Epstein.South Africa: A Budgetary Balancing ActLocally, attention turns to Finance Minister Enoch Godongwana’s national budget on Wednesday. High commodity prices have gifted the Treasury a R50 billion revenue windfall. Economist Dawie Roodt suggests this surplus, equivalent to a 2% budget increase, presents a rare opportunity.While there is pressure to increase spending on public sector salaries or Eskom, Roodt advocates for:Reducing the "damaging" 27% corporate tax rate. Adjusting personal income tax brackets to offset "bracket creep" caused by inflation. Simplifying an "expensive and complicated" tax regime..Despite these challenges, the markets expect a fiscal deficit slightly below 4% and a potential stabilising of the debt-to-GDP ratio at 78%..Corruption and "TikTok Likes"Finally, the Madlanga Commission and parliamentary inquiries into police capture continue to stir public debate. Ian Cameron, chair of the police portfolio committee, expressed disappointment that some proceedings have devolved into a "soap opera" driven by "TikTok likes" rather than merit. Nevertheless, he remains "carefully optimistic" as investigative teams begin making arrests

BN Daybreak Tues 24 Feb - Global Tariffs, AI Shockwaves, and SA’s R50bn Budget Windfall

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