Global Markets React to Trump's Tariff Decisions

Asia-Pacific markets rose on Monday after U.S. President Donald Trump paused tariffs on certain consumer electronics, boosting risk sentiment. Hong Kong's Hang Seng Index led gains, up 2.12%, while mainland China's CSI 300 was up 0.23%. Japan's Nikkei 225 rose 1.50% and Australia's S&P/ASX 200 closed 1.34% higher. Trump's decision to exempt smartphones, computers, and other devices from tariffs was seen as positive, but uncertainty remained as he suggested the exemptions were not permanent. Meanwhile, several countries in the region, including Japan, Vietnam, India, and South Korea, are preparing for trade negotiations with the U.S. this week.

Stock futures rose on Monday as Wall Street assessed President Donald Trump's latest tariff moves, which exempted smartphones, computers, and semiconductors from "reciprocal" tariffs. The S&P 500 futures gained 0.86%, while Nasdaq-100 futures moved 1.31% higher, and Dow Jones Industrial Average futures climbed 109 points. The exemptions were seen as a positive for Big Tech, but uncertainty remains around the president's tariff policy and China tariff negotiations. The market is preparing for a major week of earnings, including results from Goldman Sachs, Bank of America, and Netflix. Despite a positive week, with the S&P 500 gaining 5.70%, the major averages are still down since Trump's tariff announcement earlier this month, with the S&P 500 dropping 5.4%, Nasdaq Composite falling 5%, and Dow Jones Industrial Average declining 4.8%.

Chinese President Xi Jinping has urged Vietnam to resist "unilateral bullying" and promote free trade during a state visit, as part of a diplomatic tour aimed at rallying Southeast Asian nations against US tariffs imposed by President Donald Trump. Xi's visit comes as the region is increasingly anxious about being caught in the crossfire between the world's two largest economies. Vietnam and other Southeast Asian countries were heavily impacted by Trump's tariffs before they were paused, and Xi is seeking to position China as a stable and reliable trade partner. The visit is expected to strengthen economic ties between China and Vietnam, with plans to sign around 40 agreements across multiple sectors. However, analysts warn that Southeast Asian nations need to tread carefully to avoid being seen as siding with China and potentially provoking the US.

Chinese President Xi Jinping has begun a diplomatic tour of Southeast Asia, starting with a visit to Vietnam, in an effort to strengthen ties and position China as a stable partner amid the ongoing trade war with the US. Xi's visit comes as US President Donald Trump has narrowed his focus on China with his "reciprocal" tariffs, pausing them on most countries for 90 days. Southeast Asian nations, which have been hit hard by Trump's tariffs, are anxious about being caught in the crossfire and are seeking to maintain good relations with both China and the US. Xi is expected to promote China as a reliable partner and defender of global trade, and is likely to sign agreements with Vietnam on various sectors, including railways and agricultural trade. The visit is seen as an attempt by Xi to diversify China's economic footprint and pull countries closer to China as they are unsettled by Trump's tariffs.

Global stocks rose on Monday after President Trump's latest tariff announcements, with Asian markets leading the gains. Japan's stocks rose 1.5%, Hong Kong's benchmarks were up 2.5%, and Taiwan's stocks jumped 1.5%. S&P 500 stock futures were about 0.80% higher. The rally followed a chaotic week on Wall Street, with Trump's tariff decisions causing whiplash in financial markets. Trump's administration had imposed "reciprocal" tariffs on dozens of countries, then paused them for 90 days, and exempted certain technology products from tariffs, only to signal that the exemptions might be temporary. Analysts warned that Trump's tariffs have already begun to weigh on the economy, with consumer confidence plunging to years-low levels.

Hong Kong stocks rose by 2.4% to 21,419.59 at the noon break, the biggest gain in four weeks, after the US suspended tariffs on consumer electronics. The Hang Seng Tech Index also rallied 2.7%. Electronics companies such as Lenovo and BYD Electronic International led the gains, while Alibaba and Tencent also rose. The move was seen as a temporary reprieve, with the US planning to impose a separate duty on the exempted items and potentially introducing new tariffs on semiconductors.

US President Donald Trump suggested that China's efforts to deepen economic ties with Vietnam are likely part of a plan to "screw" the US, made during a discussion on tariffs and trade with reporters in the Oval Office, while Chinese embassy spokesman Liu Pengyu stated that cooperation between countries should contribute to regional peace and prosperity.

China is testing US President Donald Trump's resolve by flexing its maritime muscle in the Indo-Pacific, conducting military drills near Taiwan, Australia, and Vietnam, and unveiling new military capabilities such as deep-sea cable cutters. The US has been criticized for its lack of clear strategy on China, with Trump's stance on Taiwan and the South China Sea unclear. China's actions are seen as a test of Trump's willingness to take a strong stance, with some experts warning that Beijing may try to strike a deal with Trump, potentially at the expense of regional allies. The US's Indo-Pacific allies are anxious about Trump's intentions, and a lack of a coherent US strategy on China is seen as problematic, with some warning that it could lead to a more volatile region.

Chinese President Xi Jinping has begun a three-nation tour of southeast Asia, starting in Vietnam, where he emphasized that "no winners" would emerge from a trade war and that protectionism "leads nowhere". Xi's visit aims to strengthen ties with China's neighbors and position China as a reliable partner, contrasting with the US, which has imposed tariffs on the region. During his visit, Vietnam and China are expected to sign around 40 agreements, including cooperation on developing Vietnam's railway network. Vietnam is trying to balance its relations with the US and China, as it relies on the US as its main export market and China as its top import source.

The UN's trade and development arm, Unctad, has called on Donald Trump to exempt the world's poorest and smallest countries from "reciprocal" tariffs, warning that they risk "serious economic harm." Unctad identified 28 countries targeted with high tariff rates, including Laos, Mauritius, and Myanmar, despite each accounting for less than 0.1% of the US trade deficit. The report argued that many of these countries are unlikely to be a threat to the US economy and that the tariffs could lead to higher prices for US consumers. Unctad highlighted that some of the countries' key exports, such as vanilla from Madagascar and cocoa from Ivory Coast and Ghana, are unlikely to be substituted by US domestic production. The White House had put the higher tariff rates on pause for 90 days, but Unctad urged the administration to use this opportunity to reassess its tariff policy and exempt vulnerable economies.

Chinese President Xi Jinping visited Vietnam, Cambodia, and Malaysia amid a trade war with the US, calling on Southeast Asian countries to resist President Donald Trump's "unilateralism and protectionism". Xi's trip is part of China's "neighborhood diplomacy" strategy to expand its friends and trading partners in the region and counter the US's efforts to suppress Chinese development. The countries Xi visited were among those that received a temporary reprieve from Trump's tariffs last week. China's exports surged to a record $273 billion trade surplus in the first quarter as exporters rushed to send orders out before Trump's tariffs took effect. Beijing has retaliated with tariffs of its own on US goods and is seeking to court other US partners hit by the tariffs, including the European Union. However, analysts say Xi is likely to gain little more than "rhetoric plus ambiguous agreements" on his trip due to the region's concerns about Chinese goods and territorial disputes.