10th April 2025

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TRADE:

• Trump’s new tariffs on China have taken effect, raising the tariff rate to 125%. China’s 84% tariffs on all U.S. goods have also come into effect. (Newswires)
• Trump posted after midnight Eastern Time, "What a day, but more great days coming!!!." (Truth)
• An increased influence of Treasury Secretary Bessent, a slew of countries willing to negotiate, a declining stock market, and complaints from business leaders were all key in Trump's tariff detente, according to WSJ sources. (WSJ)
• Trump had privately acknowledged that his trade policy could trigger a recession but said he wanted to be sure it didn’t cause a depression. (WSJ)
• Caving to the US under such pressure is a nonstarter for Chinese President Xi, say people who consult with senior Chinese officials, saying the Chinese leader will continue to respond to Trump’s escalations with a bare-knuckle approach that makes a prolonged fight even more likely. (WSJ)
• China’s top leaders are set to meet Thursday to discuss additional economic stimulus in response to Trump’s tariff increases, according to Bloomberg. The meeting will focus on measures to support housing, consumer spending, and technological innovation. (BBG)
• China’s Commerce Minister stated that China is willing to resolve differences through consultation and negotiation. However, if the U.S. insists on having its own way, China will fight to the end. (RTRS)
• China’s Commerce Ministry said China will unswervingly focus on managing its own affairs well and will work to hedge against the uncertainty of the external environment. It affirmed that the door to dialogue remains open, but any talks must be based on mutual respect and equality, adding that pressure, threats, and blackmail are not the right way to deal with China.(RTRS)
• The US appears open to comprehensive negotiations with the EU to address a broad range of issues, Irish Trade Minister Harris said after a meeting with U.S. Commerce Secretary Lutnick on Wednesday. (RTRS)
• EU's von der Leyen welcomed Trump’s announcement to pause reciprocal tariffs, affirming that she has consistently advocated for a zero-for-zero tariff agreement between the EU and the US. She added that the EU is stepping up efforts to lift barriers within its own single market. (RTRS)
• Spanish PM Sanchez said the US decision to pause a round of global tariffs can serve as a way to open “a door to negotiation” and therefore could lead to an agreement. (BBG)
• The EU's energy commissioner said the bloc will court the US for more gas to assuage Trump while also slashing red tape to boost renewable power capacity this year. (FT)
• China and the EU on Tuesday exchanged views on strengthening their economic and trade cooperation in response to U.S. tariffs, the Chinese Commerce Ministry said on Thursday. (RTRS)
• Japan’s Economy Minister Akazawa is set to visit the US as early as next week to meet with Treasury Secretary Bessent. (NHK)
• Taiwan President Lai Ching-te said, “While Taiwan already maintains low tariffs, with an average nominal rate of 6%, we are willing to further cut this rate to zero on the basis of reciprocity with the US”. (BBG)
• Taiwan is planning a surge in US purchases over the next decade that would triple the share of American liquefied natural gas in the island’s mix. The purchases would include boosting the share of US LNG in Taiwan’s total imports to 30% from current levels around 10%. (BBG)
• Australia on Thursday declined Beijing's proposal to work together to counter U.S. tariffs, saying instead it would continue to diversify its trade and lower its reliance on China, its largest trading partner. (RTRS)
• New Zealand and Australia said on Thursday they are each working with other nations on a possible joint response to shore up free trade against a barrage of US tariffs. (RTRS)

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MACRO:

• Fed's Kashkari (2026 voter) said things have changed dramatically after the tariff delay and there'll be a little less of an impact on inflation if the pause endures, whilst saying uncertainty could still cause an economic downturn. Said the bar for cutting rates is still high. (CBS)
• House GOP cancelled the budget vote as hard-liners agitate for more spending cuts in Trump’s ‘beautiful’ bill. Speaker Mike Johnson has suggested forging ahead, even through a scheduled recess, as Republican leaders consider tweaks. (Politico)
• Trump signed an executive order to review the Pentagon’s weapons acquisition process, including assessments of top weapons programs that may be behind schedule and beset by cost overruns. (BBG)
• Trump signed an executive order that establishes funding for his plan to revive U.S. shipbuilding. Other directives include increasing the fleet of U.S.-flagged ships and creating a security plan for Arctic trade lanes. (RTRS)
• Trump signed executive orders and proclamations focused on deregulating markets, including one aimed at ensuring federal regulations do not block entrants from entering new markets. (RTRS)
• US shale oil producers are facing their gravest threat in years, as a sudden crude price sell-off triggered by Donald Trump’s trade war has pushed parts of the sector to the brink of failure, executives have warned. (FT)
• Bloomberg economist Anna Wong notes as things stand, the tariff mix is actually worse —China exports more consumer goods to US than other countries, so boosting that (to 125%) relative to others will boost the hit to consumption goods. (BBG)
• Jason Furman, an economist and former Obama economic advisor, suggests Trump’s China escalation “is probably more inflationary” than his original reciprocal tariffs, despite suspending the high rates on the EU and other trading partners for 90 days. (X)
• Ernie Tedeschi, economist and former Biden advisor, warned a 10% broad tariff on everything plus 125% on China, is still a 25pp increase in the effective tariff rate, even accounting for USMCA exemptions. (X)
• Bill Ackman said, "Time is not China's friend as every U.S. corporation with a supply chain based in China is seeking to move it to countries that are likely to make favorable tariff deals with the United States." (X)
• The White House told US government agencies to expedite efforts to repeal regulations that officials deem “unlawful,” and skip the standard rulemaking process to do so in some instances. (BBG)
• Ahead of US CPI on Thursday, Deutsche Bank says, “Given that about 20 per cent of apparel imports are from China, price pressures stemming from President Trump’s February tariffs on China could begin to show up in this data”. (BBG)
• UBS says, "Based on the pass-through that we saw in the 2018 to 2019 tariff episode, we would expect those February and March tariff increases to have their biggest impact on the monthly US CPI changes during the May to August time period”. (BBG)
• Pantheon Macroeconomics expects low US services inflation amid notable weak demand for plane tickets and hotels due to "the sharp decline in consumer sentiment", where "relatively few services businesses have increased prices lately". (BBG)
• The onshore yuan slipped to 7.3518 a dollar in early trade, before paring, its weakest since December 26th, 2007, after the PBoC weakened the fix further. (RTRS)
• China’s consumer prices continued to fall in March (CPI -0.4% M/M vs exp. -0.3%, prior -0.2%), pointing to persistent disinflationary pressure and adding urgency to Beijing’s efforts to stimulate consumption as steep U.S. tariffs kick in. (WSJ)
• Goldman Sachs revised down its economic growth forecasts for China, citing the expected negative effect of tariffs on the country’s economy and labor market. The bank now projects China’s real gross domestic product to rise 4.0% in 2025 and 3.5% in 2026, down from its previous estimates of 4.5% and 4.0%. (WSJ)
• Several major Chinese banks are aggressively expanding lending for listed companies to conduct share buybacks or key shareholders to increase stakes as part of efforts to bolster confidence in the country’s economy and capital market. (Shanghai Securities News)
• Commentary in China's Securities Daily said it's time and appropriate for China to further implement its moderately loose monetary policy by cutting interest rates and banks’ reserve requirement ratio in face of external headwinds and global market volatility. (Securities Daily)
• Economists in Chinese press are calling for increased policy support to counter emerging economic headwinds. (Securities Times)
• Japan's annual wholesale inflation hit 4.2% in March, accelerating from the previous month in a sign of persistent cost pressures that add to corporate pain from uncertainty over U.S. tariff policy. (RTRS)
• The Japanese government nominated Kazuyuki Masu, a former CFO of trading house Mitsubishi Corp, to join the central bank's board, replacing the dovish-leaning Toyoaki Nakamura. (RTRS)
• Japanese investors made record purchases of foreign equities in the week to April 5, turning to overseas markets for bargains as domestic shares came under pressure from aggressive tariff measures announced by President Trump. (RTRS)
• Taiwan's central bank affirmed that it will continue to hold US Treasuries, noting it considers it ideal to have Treasuries make up more than 80% of its foreign exchange reserves and that it will assess whether to increase its holdings or not. (RTRS)
• The oil-price crash will likely see Saudi Arabia's budget deficit soar to $67 billion this year, Goldman Sachs calculated, well over double the government’s base forecast from late 2024 and will likely force the country to borrow more on global bond markets and further cut back economy transformation plans. (BBG)
• Growth in AI-focused data centers will drive demand for gas- and coal-fired power plants, according to a new report from the IEA. The IEA projects power demand from data centers to double by 2030. (BBG)

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EQUITIES:

• Chinese companies that sell products on Amazon are preparing to hike prices for the US or quit that market due to Trump's unprecedented tariff hikes, sellers and the head of China's largest e-commerce association said. (RTRS)
• Banking executives—frustrated at their apparent lack of influence with administration officials—turned to Republican lawmakers in recent days to lobby Trump on the tariffs. Their message was that Trump was going to tank the economy. (WSJ)
• Trump said on Wednesday he does not want U.S. Steel Corp to go to Japan, suggesting he does not support Nippon Steel's $14 billion bid for the steel producer. (RTRS)
• Dell Technologies Inc. has eliminated or narrowed the US discounts on many of its computers, the latest sign that consumers may have to pay more in the face of vacillating tariff plans. (BBG)
• OpenAI, in a court filing, accused Elon Musk of waging a “relentless” campaign for more than a year to damage the startup and urged a court to order him to stop. (BBG)
• Constellation Brands saw downside after the bell as it forecast profit below analysts' estimates, expecting Trump administration's steep tariffs to impact its beers and spirits business. (RTRS)
• TSMC’s quarterly revenue rose a larger-than-anticipated 42%, reflecting strengthening demand for AI servers and smartphones before US tariffs kicked in. That marked TSMC’s fastest pace of growth since 2022. (BBG)
• CATL's Hong Kong listing to raise at least $5 billion is due to be approved by the city's stock exchange on Thursday. (RTRS)
• Volkswagen warned that first-quarter earnings missed expectations after taking a hit from one-off items including some early impact from U.S. import tariffs. (WSJ)
• Ørsted has called on Europe to do more to support an industry at risk of a “downward spiral”, just as Trump’s new tariffs heap further pressure on its ailing US operation. (FT)
• Tesco said it expects to report lower profit for its fiscal year as competition intensifies, with rivals such as Asda ramping up efforts to gain market share. (WSJ)

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