16th April 2025

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TRADE:

• The Trump administration plans to use ongoing tariff negotiations to pressure its trading partners to limit their dealings with China, according to WSJ sources who note Treasury Sec Bessent is pushing the agenda. Officials are asking nations to disallow China to ship goods through their countries and prevent Chinese firms from being located in their territories to avoid US tariffs. (WSJ)
• The U.S. Commerce Department announced it was issuing new export licensing requirements for Nvidia's H20 and AMD's MI308 AI chips, as well as their equivalents, to China. (RTRS)
• Trump ordered a probe into potential new tariffs on all US critical minerals imports, a major escalation in his dispute with global trade partners and an attempt to push back on industry leader China. (RTRS)
• China appointed Li Chenggan as its new trade negotiator on Wednesday, a former representative to the WTO and former commerce official during the first Trump admin. Replaces Vice Commerce Minister Wang Shouwen. (RTRS)
• Japan has “many cards” to play in tariff negotiations with the US, according to Takeshi Niinami, senior economic advisor to Japan’s prime minister ahead of talks between Economy Minister Akazawa, US Treasury Sec. Bessent, and USTR Greer. (CNBC)
• The UK is "in the foothills" of a trade deal, but it has not been straightforward, and there is some distance to go, according to Sky News sources. (Sky via Newsquawk)

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MACRO:

• US Treasury Secretary Bessent in a Yahoo Finance interview dismissed concerns over China weaponizing its Treasuries, saying there has been no evidence of such, but if there were, the Treasury and Fed would do somethig about it. He also inferred intervention "if Treasuries hit a certain level". (Yahoo)
• Trump signed an executive order Tuesday that he said would lower prescription drug prices for many Americans, including people on Medicare. (WSJ)
• Gold Climbs to Record as Expanding Trade War Aids Haven Demand. (BBG)
• Trump posted on Truth, "The United States is taking in RECORD NUMBERS in Tariffs, with the cost of almost all products going down, including gasoline, groceries, and just about everything else. Likewise, INFLATION is down. Promises Made, Promises Kept!". (Truth)
• China's economy grew 5.4% Y/Y in the first quarter, surpassing estimates, but a trade war with the US has cast a shadow over the outlook. Industrial output and retail sales figures also both came in above forecasts. (RTRS)
• China's new home prices stabilised in March after a slight month-on-month dip in February. (RTRS)
• A China's stats bureau official said high US tariffs will bring about some pressures on China's trade and economy but has confidence in dealing with external challenges and achieving the economic growth target. Said macro economic policies will become more proactive this year and China has a 'rich' policy toolkit to support the economy. (RTRS)
• China's Commerce Ministry announced a plan to promote the expansion of services and improve service quality and consumer experience, saying the plan would provide strong support for high-quality economic development. (RTRS)
• Chinese stocks in Hong Kong snapped a six-day winning streak, as renewed fears of an expanding US-China trade war weigh on sentiment. (BBG)
• Chinese sellers of items from lunch boxes to appliances have taken to social media platform Rednote to generate sympathy purchases, telling domestic consumers they are offloading stock at bargain prices amid tariffs. (RTRS)
• BoJ Governor Ueda, via the Sankei newspaper, said the central bank may need to take policy action if US tariffs hurt the Japanese economy, signalling the potential to pause the bank's rate-hike cycle. He noted risks around US policies had "moved closer towards the bad scenario" the bank had envisioned. (RTRS)
• Japan’s 30-year bonds rallied on Wednesday, extending a recovery after recent turbulence, as volatility eased in the US Treasuries market and Ueda suggested a policy response to higher US tariffs. (BBG)
• A Nomura trader says “Clients continue to look at dollar downside plays across both euro-dollar and dollar-yen, but are now using leveraged structures” which indicated expectations “of a more grindy move lower from here”. (BBG)
• UK inflation slipped back for a second straight month in March, providing some relief for households before they were hit by a huge increase in bills in April. (BBG)

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GEOPOLITICS:

• US Secretary of State Rubio and envoy Steve Witkoff are expected to travel to Paris later this week, where the two sides will discuss Ukraine, Iran and trade relations in the wake of Trump’s tariff threats, according to Politico sources. (Politico)
• The US appears to have tempered its demands for the payback of aid by Ukraine during talks over an economic deal between the two nations, according to Bloomberg sources. (BBG)

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EQUITIES:

• Nvidia said it would take $5.5 billion in charges after the U.S. government limited exports of its H20 chip to China. Shares traded over 6% lower in after hours trade. (RTRS)
• ASML posted orders below analysts’ projections for the first quarter as chip makers held back spending on its semiconductor-making machinery, and warned that Trump’s erratic tariff policies were creating uncertainty. Its guidance was beneath expectations. (WSJ)
• Meta offered $450M to settle its antitrust case on Instagram and WhatsApp acquisitions, far less than the FTC’s $30B demand, emboldened by his perceived support from President Trump, although ultimately, the President did little to stop the case going to trial. (WSJ)
• Tesla plans to ship components from China for Cybercab and Semi electric trucks in the US were suspended after Trump raised tariffs on Chinese goods amid a trade war, according to a Reuters source. (RTRS)
• United Airlines swung to a profit and posted higher revenue in the first quarter despite what the airline is calling a challenging economic environment. (WSJ)
• J.B. Hunt Transport Services logged lower profit and revenue in the first quarter as the sector continued to struggle with weak demand and excess capacity. (WSJ)
• Advertising holding company Omnicom reduced the lower end of its expected range for organic growth this year, saying it was unsure how or whether tariffs will impact marketer clients’ spending. (WSJ)
• TSMC has raised prices by 30% for 4nm capacity at its US fabs due to strong demand. US tariffs have prompted many clients to revamp supply chain strategies. (DigiTimes)
• Xpeng said it had done a "thorough analysis" of its supply chain to ensure it would not be impacted by the current turmoil caused by Trump's tariffs and tensions with China. (RTRS)
• Honda Motor will shift production of its U.S.-bound five-door Civic hybrid model from Japan to Indiana. (RTRS)
• Vale churned out less iron ore than expected, reflecting licensing restrictions and seasonal heavy rainfall in operations in northern Brazil. (BBG)
• Iron-ore shipments from Rio Tinto’s massive Australian mining operations are likely to fall at the lower end of the miner’s estimates this year, following disruptions from four cyclones in recent months. (WSJ)
• Heineken backed its full-year guidance after quarterly performance beat market expectations, but warned that the consumer and geopolitical backdrop remains volatile. (WSJ)

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