Articles in this Cluster
13-05-2025
The US and China have agreed to temporarily ease tariffs for 90 days as part of a joint statement released by the White House, marking significant progress in trade negotiations. The two countries will reduce reciprocal tariffs by 115 percentage points, with US tariffs on Chinese goods dropping to around 30% and Chinese levies on American imports falling to 10%. China will also ease some non-tariff barriers, potentially resuming exports of rare earths to US customers. The agreement is seen as a positive development for global financial markets, with stock futures soaring and commodities and currency markets buoyed. However, some analysts remain skeptical about the truce's longevity and the commitment to a more permanent agreement.
13-05-2025
Asia-Pacific markets traded mixed on Tuesday following a significant rally on Wall Street after the U.S. and China agreed on a trade deal, including a 90-day pause on tariffs and a reduction in reciprocal tariffs. The Nikkei 225 surged 1.71%, while the S&P/ASX 200 rose 0.51%. In contrast, Hong Kong's Hang Seng Index fell 1.74% and the Hang Seng Tech Index dropped 3.06%. Indian markets also declined, with the Nifty 50 down 0.34% and the BSE Sensex losing 0.39%. The trade deal led to a boost in global stocks, with the Dow Jones Industrial Average jumping 2.81%, the S&P 500 rising 3.26%, and the Nasdaq Composite adding 4.35%. Nomura analysts upgraded Chinese equities to a "tactical overweight" following the trade deal.
13-05-2025
The US and China agreed to a trade deal that cuts "reciprocal" tariffs from 125% to 10% for 90 days, with the US maintaining a 20% fentanyl-related levy on China, resulting in a total tariff of 30%. The news sent global stocks soaring, with the S&P 500 jumping 3.26%, the Dow Jones Industrial Average climbing 2.81%, and the Nasdaq Composite surging 4.35%. The deal revived the idea of a "Trump put," where the president takes action to prevent markets from falling. Technology and consumer discretionary stocks rallied, with the "Magnificent 7" group adding $837.5 billion in market value. The trade deal is expected to lead to a surge in exports from China to the US, with retailers and logistics executives anticipating higher prices due to pent-up demand.
13-05-2025
Investment banks such as UBS, Morgan Stanley, ANZ Bank, and Natixis have lifted their China growth forecasts following a surprise trade deal between the US and China, which temporarily halts most tariffs on each other's products for 90 days. UBS now expects China's GDP growth to be between 3.7% to 4% in 2025, up from 3.4%. The improved outlook has also boosted Chinese equities, with Nomura raising China equities to "tactical Overweight" and Citi increasing its target for the Hang Seng Index. However, some experts caution that the deal is temporary and may not be a breakthrough in the bilateral relationship, and that China's stock market still depends on weak domestic fundamentals.
13-05-2025
The US and China have reached a trade agreement, with the US pausing most of its tariffs on China for 90 days and China suspending its retaliatory tariffs on the US. Although the trade war appears to be de-escalating, the agreement leaves tariffs higher than they were previously, with China still facing average tariffs of around 40%. The US is still implementing an economic policy to increase the cost of doing business with China, and the deeper impact of the trade rollercoaster is unlikely to disappear, with companies remaining nervous about investing due to economic instability. The US president has effectively "blinked" in the trade war, pulling back from the most damaging tariffs in the face of a potential recession.
13-05-2025
The US must understand that there are two Chinas: a "hopeful China" that is a technology and manufacturing superpower, and a "gloomy China" facing economic challenges such as sluggish consumer spending, rising unemployment, and a housing crisis. Chinese tech entrepreneurs and investors are optimistic about the country's tech advancements, but less so about the overall economy. Despite the trade war, they believe China's pain threshold is higher than the US. China's economic success comes with significant costs, including wasteful investment and human suffering, and its top-down innovation model has proven inefficient. The country's leadership prioritizes technological self-reliance over addressing pressing issues like unemployment and weak consumption, posing significant challenges for the US in navigating the trade war.
13-05-2025
The US and China have agreed to lower tariff rates following bilateral trade talks, reducing duties on Chinese goods shipped to the US to at least 30% and on American exports to a minimum of 10%. However, the effective tariff rates are complex due to the layering of new duties on top of previous tariffs imposed during the initial trade war. The baseline effective tariff rate is estimated to be around 50%, comprising the 20% tariffs from the first trade war and the new 30% duties.
13-05-2025
Chinese President Xi Jinping has called on countries to "stand united" against global trade wars, stating that "there are no winners in tariff wars" in a veiled reference to the US. He made the comments at a meeting with leaders from over 30 Latin American and Caribbean nations in Beijing, emphasizing the need for solidarity and cooperation to maintain global peace and stability in the face of rising geopolitical tensions and protectionism.
13-05-2025
A survey of nearly 100 Chinese companies operating in the US found that half plan to reduce their investments in the US due to Trump administration tariffs, with 22% saying they will "significantly decrease" their investment and 28% indicating a "slight decrease".
13-05-2025
European markets are expected to open mixed on Tuesday due to lingering uncertainty over the global trade outlook despite a 90-day pause in US-China tariffs. The FTSE 100 is expected to open lower, while the DAX is expected to rise. Investors are awaiting earnings from several major companies and data releases, including UK retail sales and Germany's ZEW economic sentiment survey. US stock futures fell overnight ahead of US inflation data due on Thursday.
13-05-2025
Stock futures fell overnight as investors await a key inflation report on Tuesday. Futures on the Dow, S&P 500, and Nasdaq 100 declined 0.24%, 0.35%, and 0.44%, respectively. The consumer price index is expected to remain at 2.4% in April on a year-over-year basis. The market had rallied on Monday after the US and China agreed to slash tariffs for 90 days, with the Dow surging over 1,100 points and the S&P 500 and Nasdaq Composite also posting significant gains. Goldman Sachs cut its recession risk estimate to 35% from 45% following the tariff pause.
