7th April 2025

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TRADE:

• Major stock indexes plunged in Asia on Monday as Trump showed no sign of backing away from his sweeping tariff plans. At time of writing: Hang Seng -12.2%, Hang Seng Tech -15.9%, A50 -6.8%, Nikkei -7.7%, TAIEX -9.7%, ASX -4.2%. (RTRS)
• Trump said to reporters Sunday on Air Force One that he had spoken to officials in Europe and Asia and that they were “dying to make a deal. But I said we are not going to have deficits with your country... we are going to have surpluses, or at worst, breaking even”. (PBS)
• “Hundreds of billions of dollars a year we lose with China,” Trump told reporters. “And unless we solve that problem, I’m not going to make a deal.” He added that he was “willing to deal with China, but they have to solve their surplus.” (PBS)
• Trump said to reporters that Europe had treated the US badly and added that “they are coming to the table, they want to talk, but there’s no talk unless they pay us a lot of money on a yearly basis. Number one for present but also for past”. (PBS)
• Asked by a reporter if there is a "Trump put", the President replied "I think your question is so stupid. I don't want anything to go down but sometimes you need to take medicine to fix something." (PBS)
• Trump posted on Truth on Sunday, "We have massive Financial Deficits with China, the European Union, and many others. The only way this problem can be cured is with TARIFFS... We are going to reverse it [deficits], and reverse it QUICKLY." (Truth)
• Trump posted on Truth on Friday evening, "Big business is not worried about the Tariffs, because they know they are here to stay, but they are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our Economy" (Truth)
• Trump posted on Truth on Saturday, "China has been hit much harder than the USA, not even close. They, and many other nations, have treated us unsustainably badly... HANG TOUGH, it won’t be easy, but the end result will be historic." (Truth)
• US Commerce Secretary Lutnick said on Sunday that the tariff strategy will stay in place, also saying “There is no postponing.” (CBS)
• US Treasury Secretary Bessent on Sunday argued tariffs were necessary and rejected that they would cause a recession. He said more than 50 countries had called the administration seeking negotiations, but any talks are going to take time. (NBC)
• US trade advisor Navarro said, “This is not a negotiation, this is a national emergency based on a trade deficit that’s gotten out of control because of cheating... We’re always willing to listen.” (Fox News)
• Elon Musk said to Italian Deputy PM Salvini, “Both Europe and the United States should move, ideally, in my view, to a zero-tariff situation... That’s what I hope occurs.” (BBG)
• Bill Ackman published a post on X on Sunday urging a “90-day timeout” on some of the tariffs announced by the White House last week. He said Trump was risking an “economic nuclear winter” and eroding global confidence in the U.S. as a trading partner. (MarketWatch)
• The Trump administration is weighing financial aid to America’s farmers to mitigate any negative effects from Trump’s tariff program, Brooke Rollins, the U.S. agriculture secretary, said Sunday. (WSJ)
• Many Republican lawmakers are adopting a wait and see approach to Trump's tariffs, hoping that the stock market turmoil is short lived as they pressure from industry. (WSJ)
• U.S. customs agents began collecting the 10% tariff on all imports from many countries on Saturday, with higher levies on goods from 57 larger trading partners due to start Wednesday. (RTRS)
• US companies are struggling to figure out how to respond to Donald Trump’s trade war, concerned about the impact of the president’s tariffs on the economy but wary of speaking out for fear of retaliation by the White House. (FT)
• A deal to spin off the US assets of TikTok was put on hold after China indicated it would not approve the deal following Trump's tariffs announcement this week. (RTRS)
• China's foreign ministry spokesperson posted, "The market has spoken... Now is the time for the U.S. to stop doing the wrong things and resolve the differences with trading partners through equal-footed consultation". (Facebook)
• China said to the US, "Stop using tariffs as a weapon to suppress China's economy and trade... China has taken and will continue to take resolute measures to safeguard its sovereignty, security and development interests." (Xinhua)
• China's chamber of commerce, representing traders in food products, called on "China's food and agricultural products import and export industry to unite and strengthen cooperation to jointly explore domestic and foreign markets". (RTRS)
• Chinese officials have suggested a Trump/Xi meeting is seen as unlikely soon given heightened tensions despite prior suggestions. (WSJ)
• Chinese officials had attempted to make contact with Trump admin officials in recent months but got nowhere. Government advisors were shocked by the tariff decision and are sceptical of China's ability to negotiate a deal. (WSJ)
• UK PM Starmer and French President Macron agreed a trade war was in nobody’s interests but added nothing should be off the table. (Newsquawk)
• French Economy and Finance Minister Eric Lombard has suggested striking back against Trump's tariffs by more strictly regulating U.S. Big Tech's use of data. (Politico)
• European Commissioner Sejourne said the EU's response to US tariffs should be "proportionate" and hoped bourbon will be dropped from a list of US imports that could be slapped with additional tariffs. Sejourne said the EU had several cards up its sleeve to put pressure on America, including "withdrawing U.S. companies from our European public markets." (RTRS)
• Spain's Economy Minister Cuerpo stated that no instruments can be taken off the table when it comes to retaliation, but also stressed the importance of signaling openness to negotiations with the US. (BBG)
• Japanese PM Ishiba said on Monday that the sooner he can get on a call with Trump, the better, saying Japan needs to reach a tariff deal with the US in one shot. Ishiba also said earlier that Japan is looking into the non-tariff barriers raised by the US but cannot specify how long it will take to find solutions. (Newswires)
• Taiwan's President Lai Ching-te on Sunday offered zero tariffs as the basis for talks with the U.S., pledging to remove trade barriers rather than imposing reciprocal measures and saying Taiwanese companies will raise their U.S. investments. (RTRS)
• South Korea's trade minister will visit the US on Tuesday and Wednesday. The minister is scheduled to meet with USTR Greer and discuss lowering the 25% US tariff rates. (RTRS)
• Vietnam has offered to remove all tariffs on US imports after Donald Trump announced a 46% levy on the Southeast Asian nation, according to an April 5 letter from Vietnam’s communist party. (BBG)
• India is unlikely to immediately retaliate against Trump’s tariffs and is focusing efforts on negotiating a bilateral trade deal with the US to bring down duties, according to a government official cited by Economic Times. (Newsquawk)

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MACRO:

• US Senate passed the budget blueprint for US President Trump’s tax cuts and border agenda, sending the measure to the House. (Newsquawk)
• House Republican leaders told their members Sunday they still plan on muscling a reworked Senate budget blueprint through the House this week, even as fiscal hawks say there is enough opposition to tank the measure should it come to a vote. (Politico)
• Thousands of protesters gathered in Washington, D.C., and across the U.S. on Saturday, part of some 1,200 demonstrations that were expected to form against Trump and Elon Musk. (RTRS)
• In the first weekend since President Trump unveiled broad tariffs, many shoppers sought to get ahead of expected price increases. (NYT)
• Goldman Sachs has made a US recession its base case unless Trump cuts this week's impending additional tariffs. (Newswires)
• JPMorgan said in a note Friday that volatility targeting portfolios had between $25 billion and $30 billion in equities to sell in the coming days, as they unwind positions to reduce risk. (RTRS)
• Money market funds are surging as investors stay parked in cash. Retail investors are losing their appetite for buying the dip. (WSJ)
• UK wealth managers say enquiries from US-based investors worried by the actions of Donald Trump and his administration and seeking to move money from the country have risen markedly. (FT)
• Credit markets turned shaky in Asia on Monday, with the cost of insuring against corporate and sovereign default higher as recession fears rippled across financial markets. (RTRS)
• Chinese officials told state media on Monday they were prepared to cut borrowing costs and lower cash reserve requirements for lenders. They also said there is “ample room” to expand the state’s fiscal deficit and use extraordinary measures to boost consumption. (FT)
• China’s policymakers discussed measures over the weekend to stabilize the economy and the markets in the face of US President Donald Trump’s tariff onslaught, including whether to accelerate plans to unleash stimulus to bolster consumption, according to Bloomberg sources. (BBG)
• China's sovereign fund Central Huijin ("national team") is actively taking measures to stabilise the capital market, the official Securities Times said on Monday, citing sources. (RTRS)
• The deepening trade war is raising speculation in financial markets that China may resort to aggressively devaluing the yuan against the dollar in a break of their policy of pursuing a stable currency. (BBG)
• China's yuan slipped to a 2-1/2-month low against the dollar on Monday. The pace of declines in the yuan was somewhat tempered by the central bank's support, which continued to set the daily official midpoint at a level firmer than market projections. (RTRS)
• PBoC continued its gold buying for a fifth consecutive month in March, adding 0.09mln troy ounces to its reserves. (BBG)
• Goldman Sachs said it expects Chinese policymakers to accelerate fiscal easing measures significantly to offset the drag on growth from higher tariffs. Goldman expects the new tariffs to lower Chinese GDP growth by at least 0.7 percentage point this year. (RTRS)
• China's Vice Commerce Minister Ling Ji told US companies including Tesla and GE Healthcare that the country would always protect the rights of foreign-funded firms in China, including those from the US. (RTRS)
• Japan’s exchange operator briefly called a halt to trading in Nikkei stock futures on Monday morning because of a sharp fall triggered by President Trump’s tariffs. (WSJ)
• Japan Chief Cabinet Secretary Hayashi and Finance Minster Kato both said the government was watching market moves with a sense of urgency. (RTRS)
• Japan's government and ruling coalition are considering compiling an extra budget in response to the impact of Trump-era tariffs and prolonged inflation. Prime Minister Ishiba is expected to instruct the compilation of the extra budget as early as this month. (Kyodo)
• Some Japanese companies are worried about heightened uncertainty over U.S. trade policy that could hit their profits and output, the central bank said in a statement on Monday after a quarterly meeting of its regional branch managers. (RTRS)
• Taiwan's top financial regulator said on Sunday it will impose temporary curbs on short-selling of shares to help deal with potential market turmoil from Trump's new tariffs as the market reopens for the first time since Wednesday. (RTRS)
• Industrial production in Germany fell back into contraction in February, reflecting the persistent weakness of the sector even before President Trump’s tariff measures imposed last week. (WSJ)
• ECB's Stournaras warned that Trump’s tariffs risk triggering a large “negative demand shock” in the Eurozone, as the ECB weighs an interest rate decision later this month. (FT)
• Australia will be able to manage the direct impact of Trump's tariffs but economic growth will take a hit as the global economy slows, Treasurer Jim Chalmers said on Monday. (RTRS)
• New Zealand said it would boost defence spending by NZ$9 billion ($5 billion) over the next four years, and aim to nearly double spending to 2% as a share of GDP in the next eight years. (RTRS)
• A meeting of top OPEC+ ministers on Saturday kept oil output policy unchanged after the surprise output hike last week and discussed the plan for some members to compensate for pumping above quotas. (RTRS)
• Goldman Sachs revised down its price forecasts again for Brent and WTI crude in 2026, citing increased recession risks and the possibility of higher-than-expected OPEC+ supply. The bank cut its 2026 average price forecast by $4 for Brent to $58 a barrel and WTI to $55. (RTRS)
• Run rates for China's struggling independent oil refiners have nudged up recently, but still face near-term pressure over tepid domestic fuel demand and supply risks from U.S. sanctions and tariffs, industry participants and analysts said. (RTRS)
• Venezuela’s government is cracking down on the use of black market dollars as it seeks to protect the embattled bolívar currency in the face of US sanctions and “secondary” tariffs. (FT)
• ​Bitcoin's price has fallen below $75,000 for the first time since November 2024. (Newswires)
• Tether is considering offering a US-only “stablecoin” if Donald Trump’s administration introduces regulations to encourage new market entrants. (FT)

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GEOPOLITICAL:

• A Ukrainian team will travel to the US early this week to discuss a minerals deal. (RTRS)
• The head of Taiwan's National Security Council arrived in the US for talks with the Trump' administration on Friday, days after China concluded war games around Taiwan. (RTRS)
• US Secretary of Defence Hegseth will travel to Panama early this week as Washington increases pressure on the Central American nation for alleged Chinese influence over its famous canal. (FT)
• The US is closing on a deal with the Democratic Republic of Congo that would see American companies take more control of critical mineral assets in return for greater backing for the embattled Kinshasa government. (FT)
• China and Cambodia on Sunday held joint military exercises at a newly expanded naval base on the coast of the Gulf of Thailand, a facility the US worries could become a military outpost for the Chinese. (RTRS)

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EQUITIES:

• Meta Platforms on Saturday released the latest version of its large language model (LLM) Llama, called the Llama 4 Scout and Llama 4 Maverick.
• The growing relationship between Trump and Meta CEO Mark Zuckerberg is stoking fears in Washington that the White House could pull the plug on the landmark, six-year FTC case that could see Meta forced to divest Instagram and WhatsApp. (Politico)
• The Centers for Medicare & Medicaid Services said on Friday it did not move forward with a proposal put forth by the Biden administration for Medicare coverage of weight-loss drugs such as those made by Novo Nordisk and Eli Lilly. (RTRS)
• Starbucks has sharply slowed its ambitious expansion in India as hard-pressed middle-class consumers cut spending at the coffee chain’s stores. (FT)
• Howmet Aerospace, which supplies parts for planes built by Airbus and Boeing, may halt some shipments if they are impacted by tariffs announced by Trump. Howmet declared a force majeure event, a legal practice that allows parties to a contract to avoid their obligations if hit by unavoidable and unpredictable external circumstances. (RTRS)
• Foxconn posted its highest first-quarter revenue ever on strong demand for AI products but said it would need to closely watch global politics. (RTRS)
• DeepSeek is working with Tsinghua University on reducing the training its AI models need in an effort to lower operational costs. The Chinese startup collaborated with researchers from the Beijing institution on a paper detailing a novel approach to reinforcement learning to make models more efficient. (BBG)
• Samsung Electronics is seeking 3-5% memory chip price hikes and is already in negotiations with major clients, where demand for memory chips has surged as customers stockpiled chips ahead of feared tariffs. (Pulse)
• LG Energy Solution, an EV battery supplier for General Motors and Tesla, estimated on Monday a 138% rise in its quarterly operating profit. (RTRS)
• Toyota Motor will produce EVs in the US, Thailand and Argentina, diversifying its production base from the existing two countries, Japan and China. (Nikkei)
• Shell lowered its integrated gas production estimate for the first quarter as volumes were hit by unplanned maintenance. (WSJ)
• Prada is set to make a decision this week about a potential takeover of smaller rival Versace, as the negotiations enter a final phase. (RTRS)
• Australian-listed miners of heavy rare earths rallied on Monday on bets Western governments would renew their push to develop a separate supply chain after top producer China set down export controls. (RTRS)

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