The combined expenditure in the general public budget and the government fund account, China’s two main fiscal books, rose to 9.26 trillion yuan ($1.3 trillion) in the first three months, an increase of 5.6% from the same period a year earlier, according to Bloomberg calculations based on data released by the Ministry of Finance on Friday. That was the strongest gain for the first quarter in three years.

The numbers meant nearly 22% of the outlays planned for the full year was spent in the period, faster than 21.6% at the same point last year.

China has to strengthen public spending to shield the economy as surging American tariffs could send its exports into contraction while a years-long housing market downturn and deflation keep consumer and business sentiment weak. Its growth held up in January-March, but economists broadly expect it to slow sharply from the second quarter after the wave of export front-loading passes and benefits from a consumer trade-in program taper off.

Several major banks have downgraded their forecast on China’s expansion this year to 4% or lower, well below the government’s goal of around 5%. Officials are focusing on implementing supportive measures announced at last month’s parliamentary session, although they also said they have ample scope and tools to add stimulus when necessary.

Faster tax rebate payouts have been cited by some analysts as an option to help offset some squeeze posed by US tariffs on exporters. The payout as a share of exports last month came in at 11%, only up slightly from the level a year earlier, according to Bloomberg calculations based on official data.

The property downturn remained a drag on government income last month, with land sales shrinking 16.5% on year and real estate-related revenues falling 0.1%.

Tax revenue declined on year for a second straight month while the increase in non-tax income almost halved. Local authorities rushed to sell bonds to swap the so-called “hidden debt” onto their books in a program aimed at alleviating their cash strains and reducing excessive fines imposed on businesses, which are a source of non-tax income.

The continued contraction in land sales and tax revenues meant total income under the two major budgets fell 2.6% on year to 6.94 trillion yuan ($950 billion) in the first quarter.

The gap between government income and spending broadened as a result, with the broad budget deficit soaring 41% on year to 2.3 trillion yuan ($315 billion).

Source: Bloomberg Europe

The Trump administration announced plans on Thursday to impose new port fees on Chinese commercial vessels—part of a broader effort to revive America's dwindling shipbuilding industry, which officials now view as a national security risk amid the urgent need to bolster hemispheric defense across the Americas in an increasingly fractured, bipolar world.

"Ships and shipping are vital to American economic security and the free flow of commerce," U.S. Trade Representative Jamieson Greer wrote in a statement, adding, "The Trump administration's actions will begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships."

The Federal Register notice titled "Notice of Action and Proposed Action in Section 301 Investigation of China's Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance, Request for Comments," published Thursday by the U.S. Trade Representative (USTR), states that new fees will be imposed on all Chinese-built and Chinese-owned ships docking at ports across America. These fees will be based on net tonnage or the volume of goods carried per voyage and will only be charged once per voyage and not per port arrival.

"The fee will be set at $0 for the first 180 days, will then be set at $50/NT, and will increase incrementally over the next three years," the USTR notice read.

• Effective as of April 17, 2025, a fee in the amount of $0 per net ton for the arriving vessel.

• Effective as of October 14, 2025, a fee in the amount of $50 per net ton for the arriving vessel.

• Effective as of April 17, 2026, a fee in the amount of $80 per net ton for the arriving vessel.

• Effective as of April 17, 2027, a fee in the amount of $110 per net ton for the arriving vessel.

• Effective as of April 17, 2028, a fee in the amount of $140 per net ton for the arriving vessel.

The USTR notice explained that "any such fee would be charged per rotation or string of U.S. port calls, and no more than five times a year on an individual vessel."

Service fees for vessel operators of Chinese-built vessels are lower.

• Effective as of April 17, 2025, a fee in the amount of $0 for each container discharged.

• Effective as of October 14, 2025, a fee in the amount of $18 per net ton ($120 per container)

• Effective as of April 17, 2026, a fee in the amount of $23 per net ton ($153 per container)

• Effective as of April 17, 2027, a fee in the amount of $28 per net ton ($195 per container)

• Effective as of April 17, 2028, a fee in the amount of $33 per net ton ($250 per container).

The second phase will begin in three years and target Chinese LNG vessels. USTR explained the purpose of this action:

"To incentivize U.S.-built liquified natural gas (LNG) vessels, limited restrictions on transporting LNG via foreign vessels. These restrictions will increase incrementally over 22 years."

New taxes on Chinese commercial ships add to the complexity of a broadening trade war between the two economic superpowers. Trump recently slapped all Chinese goods entering the U.S. with a 145% effective tariff rate, while Beijing has slapped all U.S. goods entering China with a 125% levy.

The USTR notice continued, "A few comments agreed with the proposals, noting that the proposed fees would address trade imbalances, enhance national security, support investment in the American maritime industrial base, and promote higher environmental and labor standards. One commenter suggested that the proposed fees be captured in a U.S. shipbuilding and mariner compensation trust fund to be expended each year for reviving the U.S. merchant marine."

Time to make America's shipbuilding industry Great Again.

Source: Zero Hedge

Is Trump Planning to Fire the Fed Chair?

The White House has revealed that President Donald Trump is exploring whether he has the authority to fire Federal Reserve Chairman Jerome Powell. This news has sparked widespread debate about the independence of the Federal Reserve and the potential political interference in U.S. monetary policy.

The Federal Reserve, often simply called “the Fed,” is designed to be independent from political pressure, allowing it to make economic decisions without influence from the White House or Congress. However, Trump has been openly critical of Powell in the past, especially when interest rate hikes conflicted with his administration’s economic goals.

What the Law Says About Removing a Fed Chair

Jerome Powell was appointed to a four-year term as Fed Chair in 2018 and, under current law, cannot be removed without cause. The Federal Reserve Act does not clearly outline what constitutes “cause,” and no sitting Fed Chair has ever been fired by a president.

Legal scholars are divided on whether Trump has the legal authority to remove Powell. Some argue that because Powell is also a member of the Federal Reserve Board of Governors, he can only be removed “for cause,” which would require clear evidence of misconduct or failure to fulfill duties. Others suggest that the President might attempt to demote Powell from the chairmanship without removing him entirely from the board, a move that would still be controversial.

Potential Consequences for Markets and Policy

If Trump attempts to fire or demote Powell, it could severely shake investor confidence and challenge the global perception of U.S. financial independence. Markets tend to react strongly to signs of political interference in monetary policy, and such a move could increase volatility in the stock and bond markets.

Furthermore, it could set a dangerous precedent for future administrations, allowing presidents to pressure central bank leaders into making politically favorable decisions rather than sound economic ones.

For now, Powell remains in his position, but the situation is being closely monitored by financial markets, legal experts, and political analysts alike.

Source: CryptoSlate

Speaking to reporters, White House National Economic Council Director Kevin Hassett said Trump was studying whether firing Powell was an option.

Fed independence at risk? Trump reportedly planning to fire Powell

According to media reports citing sources, US President Trump has been privately discussing the possibility of replacing Federal Reserve Chairman Powell for months, but he has not yet made a final decision on this.

Powell, 72, is a Republican who was nominated by Trump as Fed chairman during his first term. Powell won the trust of the previous US President Biden and was able to get a second term as Fed chairman in 2022. His term will end in May next year.

As early as Trump's first term as US President (2017-2021), he and Powell disagreed. Trump repeatedly asked Powell to cut interest rates, while the latter insisted on maintaining the independence of the Federal Reserve.

After Trump started his second term, the conflict between him and Powell has intensified. While launching radical trade policies, Trump continued to pressure Powell to cut interest rates, but Powell remained unmoved.

People familiar with the matter revealed that in several meetings at his private estate in Florida, Mar-a-Lago, Trump and former Federal Reserve Governor Kevin Walsh discussed the possibility of firing Powell before the end of his term and may consider Walsh to take over as Fed chairman.

Walsh is understood to have dissuaded Trump from firing Powell, arguing that he should be allowed to complete his term and that the Fed's independence should not be interfered with. The conversation with Walsh continued into February of this year, and other advisers to Trump even discussed firing Powell with him in early March.

As early as 2017, Trump considered Walsh as the chairman of the Federal Reserve before choosing Powell, who officially took office the following year.

Trump team divided

In a meeting in the Oval Office of the White House on Thursday, Trump said he believed he had the power to fire Powell.

"If I wanted him out, he'd be out in a heartbeat, believe me," Trump said.

He added that he was unhappy with Powell and accused him of playing politics on interest rates.

If Trump does try to fire Powell, the matter would almost certainly be appealed to the Supreme Court, a move that would not only put pressure on Powell's successor but could also roil markets as they worry about the precedent of a Fed chair being removed over policy differences.

Trump's advisers are divided over whether to take action, and it is unclear whether Trump will actually do so.

Inside the White House, Treasury Secretary Jeff Bessant has long opposed the idea of ​​replacing Powell, arguing that the move is extremely risky and offers little benefit. He said this week that the Fed's independence in monetary policy is a "treasure that can never be destroyed" in the United States.

Some advisers, however, have advocated for a more direct challenge to Powell, arguing that the Fed and its backers in Washington and on Wall Street have overly glorified the institution’s independence, an independence that has no constitutional backing and is not conducive to economic development.

Trump has trouble firing Powell

There is no legal precedent as to whether the president has the power to fire the Fed chairman before the end of his term.

Trump has previously admitted that the law is not clear on this. He said in October 2023: "I wanted to fire him (Powell) at the time (referring to the first term), but the question is whether you really have the power to do so."

Powell made it clear six years ago that if his position was challenged, he would fight through legal means, and his recent public statements show that this position has not changed.

The top Fed officials had prepared for this: once Powell's position as chairman of the Federal Reserve is challenged, the Federal Open Market Committee (FOMC), the independent body responsible for setting interest rates at the Fed, will immediately hold a meeting to re-elect Powell as chairman of the committee.

Source: Cailianshe

WASHINGTON (April 18): US President Donald Trump and Italian Prime Minister Giorgia Meloni each expressed confidence on Thursday that the US and Europe will be able to negotiate a trade deal before his 90-day pause on some tariffs ends.

The 27-nation European Union (EU) faces 25% import tariffs on steel, aluminium and cars, and broader tariffs on almost all other goods under Trump's policy to hit countries he says impose high barriers to US imports.

Trump said he was 100% certain of an eventual trade deal with Europe, the most confidence he has expressed on those negotiations since rattling world markets with his tariff announcements.

"Of course there will be a trade deal, very much. They want to make one very much. And we are going to make a trade deal. I fully expect it. And it will be a fair deal," Trump told reporters in the Oval Office after talks with Meloni, a close ally.

Meloni, positioning herself as an intermediary between the US and Europe, was equally confident.

She noted, however, that she could not lock in a deal for the full EU but said frank discussions could help resolve trade disputes that have strained US-European ties.

"I am sure we can make a deal, and I am here to help with that," she said.

Trump has offered to make trade deals with as many nations as possible to limit the impact of the tariffs. Asked about what countries were on his priority list, he said, “Everybody is on my priority list.” He also said he expected to make a trade deal with China.

While Trump is cool to many European leaders, he and Meloni, a 48-year-old conservative, have bonded. She was the only EU leader invited to Trump's inauguration in January, and he praised her leadership during their visit on Thursday.

"Our relationship is great," Trump said.

After a lunch meeting, Trump and Meloni sat side by side in the Oval Office and fielded questions during a lengthy session.

They both talked up their tough stances against diversity and inclusion policies, as well as migration. Meloni, who will host Vice President JD Vance in Rome on Friday, said Trump had accepted her invitation to visit Italy in the near future.

Trump enjoyed Meloni's long answer in Italian to a question that he declared "that was so beautiful" and insisted on hearing the translation.

Trump's move to pause most global tariffs for 90 days last week eased some pressure on Meloni's visit.

She is walking a tightrope between her ideological affinity with the president and her ties with European allies, who have criticized Trump's tariff hikes and his decision to exclude the EU from talks with Russia to end the war in Ukraine.

Meloni is facing pressure at home to protect Italy's export-driven economy, which last year ran a €40 billion (US$45.4 billion or RM200.77 billion) trade surplus with the US.

But she must also be seen as defending the interests of the whole 27-nation EU bloc.

Meloni told reporters she expected Italy would announce at the next Nato meeting in June that her country would be able to reach the alliance requirement that each member nation spend 2% of gross domestic product on defence spending.

Highly indebted Italy's projected defence budget for 2024 was 1.49% of gross domestic product, Nato figures showed, below the military alliance's current 2% target that Trump wants raised to 5%.

Source: Theedgemarkets

(April 18): US President Donald Trump said the US and Ukraine would sign a deal on critical minerals next Thursday, in a step expected to keep Kyiv in good favour, as the White House seeks to broker a quick ceasefire deal with Russia.

“We have a minerals deal which I guess is going to be signed on Thursday,” Trump said while meeting with Italian Prime Minster Giorgia Meloni in the Oval Office. “And I assume they are going to live up to the deal.”

The announcement puts the agreement — which fell through after Ukrainian President Volodymyr Zelenskiy clashed with Trump and Vice President JD Vance in the Oval Office — back on track, and suggests both sides have agreed to the contours of the accord governing postwar plans to exploit the country’s mineral deposits and rebuild its infrastructure.

The agreement comes as Trump has vacillated between blaming Moscow and Kyiv for failing to end the war that began with Russia’s full-scale invasion of Ukraine in 2022. Trump has demanded a joint US-Ukraine development deal as compensation for the weapons and other aid the US provided under his predecessor, Joe Biden.

Earlier this months Ukraine and US have conducted technical discussions on the deal and agreed to sign transitional memorandum of intent, fixing the positive steps, made by the parties. The document was signed online late on Thursday, clearing the way “for an Economic Partnership Agreement and the establishment of the Investment Fund for the Reconstruction of Ukraine”, Ukraine’s Vice Prime-Minister Yulia Svyrydenko said in a post on X.

“This document is the result of the professional work of the negotiating teams, which recently completed another round of technical discussions in Washington,” Svyrydenko added.

The partnership accord would grant the US first claim on profits transferred into a special reconstruction investment fund that would be controlled by Washington. In negotiations, Kyiv has pressed for better terms and refused to recognise the past US assistance as debt.

Following a round of negotiations in Washington, the Trump administration reduced its estimate for the assistance the US provided to Kyiv since the start of Russia’s full-scale invasion from US$300 billion (RM1.32 trillion) to about US$100 billion, according to people familiar with the matter. This bring it closer to Ukraine’s own estimate of more than US$90 billion.

Trump backtracked from recent comments in which he said Zelenskiy was to blame for the war in Ukraine — while still lobbing criticism at the Ukrainian leader.

“I don’t hold Zelenskiy responsible but I’m not exactly thrilled with the fact that war started,” Trump said. He added that he was not happy with Zelenskiy because of the bloody toll of the war.

“I wouldn’t say he’s done the greatest job,” he said. “I am not a fan.”

Still, Trump said, his attention was on getting Russian leader Vladimir Putin to agree to end the fighting.

“I’m trying to get him to stop, because as you know, Russia’s a lot bigger,” Trump said.

Source: Theedgemarkets