A Trade War Can Be Fought Without Tariffs

Asian shares rose and the yen slipped on Thursday after the United States and Japan completed an opening round of tariff talks.

Japan’s Topix gained 1 percent, leading regional advances at 1:59 p.m. in Tokyo. Australia’s S&P/ASX 200 added 0.6 percent, Hong Kong’s Hang Seng climbed 1.6 percent and the Shanghai Composite edged up 0.2 percent. S&P 500 futures were 0.7 percent higher, while Euro Stoxx 50 futures fell 0.3 percent.

Japan’s Topix is up by almost 1%. Source: Google Finance

The currency market mirrored the stock moves. The Japanese yen weakened 0.6 percent to ¥142.67 per dollar after Ryosei Akazawa, Tokyo’s chief negotiator, said exchange rates were not on the agenda. The euro slipped 0.3 percent to $1.1362, and the offshore yuan eased 0.2 percent to 7.3109 per dollar.

Trump said there was “big progress” in talks with Japan

President Donald Trump said there was “big progress” toward a deal that would spare Japan from higher U.S. import taxes. A 24 percent across‑the‑board tariff on Japanese goods is on hold, though a 10 percent baseline charge and 25 percent levies on cars, steel and aluminum remain.

Investors welcomed the talks after broad U.S. levies announced earlier this month unsettled global markets. Attention now turns to country‑specific negotiations and to China, which signaled it wants several steps from Washington before agreeing to resumed discussions.

Sentiment improved despite fresh tensions on Wednesday, when Washington restricted some Nvidia chip exports and Federal Reserve Chair Jerome Powell said the central bank would take a wait‑and‑see stance on tariffs. Stocks retreated then, but Treasuries rallied for a third straight day as investors sought safety; gold reached a record high on the same demand.

Akazawa said preparations are under way for a second negotiating round later this month aimed at a quick deal. Other nations are rushing to secure agreements with Washington to avoid the tariffs Trump imposed—and quickly paused—on roughly 60 trading partners. The U.S.–Japan talks may serve as a template for future U.S. negotiations with allies.

Meanwhile, sources said the White House plans to press countries to scale back commerce with China during tariff discussions. Chinese President Xi Jinping, touring Southeast Asia, urged regional unity as part of an “Asian family.” Goldman Sachs warned U.S. investors could have to dump about $800 billion in Chinese equities in a full financial decoupling.

Elsewhere, the Bank of Korea kept its benchmark rate unchanged, and the European Central Bank is expected to cut rates later Thursday. Oil gained for a second session after Washington vowed to push Iran’s crude exports to zero.

Source: CryptoSlate

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“Given the economy’s starting point, and with both sides of our mandate expected to be under pressure, there is a strong case to hold monetary policy steady in order to balance the risks coming from further elevated inflation and a slowing labor market,” Hammack said in the text of a speech prepared for delivery before a gathering held by the Economic Club of Cleveland.

“When clarity is hard to come by, waiting for additional data will help inform the path ahead,” she noted.

Hammack, who does not hold a vote on the monetary policy- setting Federal Open Market Committee this year, said the big changes in the United States trade regime, which prominently features tariff increases, have played a role in boosting uncertainty and making it harder to know what needs to happen with central bank monetary policy.

The central bank’s federal funds target rate range now stands at between 4.25% and 4.5%. While Fed officials have penciled in rate cuts for this year and market participants are expecting a notable amount of easing as the year moves forward, there are big questions on how much the tariffs will push up prices and depress growth.

In her remarks, Hammack said the current state of monetary policy is in the right place given that inflation remains above the 2% target. She noted the economy entered the year on a strong footing but recent data has been mixed, while financial conditions have tightened amid an unusual drop in prices for stocks and bonds and a decline in the dollar.

“Uncertainty surrounding the outlook is high,” Hammack said. “I see risks around both legs of our dual mandate that could lead to higher inflation outcomes and to lower growth and employment outcomes in the near to medium term,” she said, adding “this is a difficult set of risks for monetary policy to navigate.”

Hammack noted it’s important for the Fed to take its time to get its policy response correct and said that’s better than being fast and wrong with rate changes.

Like other Fed officials, Hammack sees different possible paths. If growth “falters” and inflation eases, rate cuts, even swift ones, could be justified. But if the job market holds and inflation rises, “monetary policy may need to follow a more restrictive trajectory.”

Elevated inflation coupled with weakening rates of hiring present “challenging tradeoffs” for the Fed, Hammack said. She said, echoing other Fed officials, that in such an environment the central bank must keep inflation expectations anchored while watching to see how the economy fares relative to the central bank’s job and inflation mandates.

Source: Yahoo Finance

Global economy reporter Enda Curran tells us what to expect in light of an updated forecast from the World Trade Organization. Plus a deep dive into the man who turned song catalogs into a hot asset class.

The website of the World Trade Organization features a section celebrating the 30th anniversary of its founding in 1995, with faded photos and grainy footage of a halcyon era when governments came together to agree on rules for doing business. In the years since, the Geneva-based body proclaims, its role in expanding trade has created jobs and boosted living standards worldwide. “This portal highlights some of the WTO’s achievements over the last three decades and the events planned to mark its 30th anniversary,” the site says.

In truth, the whole enterprise feels more like a requiem for a lost era.

The reasons are obvious. Since coming back to the White House, Donald Trump has put in place the stiffest US tariff regime in a century and made it clear he’s far more interested in bilateral deals than the global cooperation the WTO represents.

The president has imposed levies of at least 10% on virtually everything coming into the US, with higher duties on autos and steel and threats of the same for pharmaceuticals and semiconductors. For China, he’s cranked the rate up to 145%, pushing the world’s two biggest economies into a full-blown trade war.

Given the increasing tension, consumer sentiment is slumping and Wall Street economists are warning of growing inflation and unemployment—perhaps even a recession. World trade is already slowing as companies put orders on hold and in some cases tell factories to stop or stall production. The WTO on Wednesday slashed its forecast for 2025, saying it expects the volume of world merchandise trade to decline by 0.2%—versus a 3.2% increase without the US-led trade war.

At the Canton Fair this week in Guangzhou, China—the world’s biggest trade gathering—executives told my Beijing colleagues Lucille Liu and James Mayger that sentiment has tanked. Jacques Houle, founder of Forno, a Canadian company that sells made-in-China appliances in North America, said he’s got enough stock warehoused in the US to tide him over for a few months, and then he’ll try to shift production out of China. “We’ve just stopped importing and are swimming with what we have,” he said.

While there seemed to be far fewer Americans than usual at the event, tariffs were at the center of almost every conversation, Liu and Mayger say. A sales manager at one shipping company estimated about 70% of its shipments to the US have been canceled or delayed since Trump implemented his tariffs, which effectively more than double the cost of goods from China. The company even recalled ships that had already left port after US buyers canceled orders.

The Americans who did make the trip to Guangzhou seem to be in shock at how quickly things have deteriorated. Paul McGrath, whose company sells a machine that makes fresh pet food, already raised its price from $299 to $399 after the 20% levy was implemented while his most recent shipment was en route to Newark. Now facing duties of 145%, he’s at a loss about how to proceed. “We all knew tariffs were coming,” McGrath said. “But this is kind of ridiculous.”

If you find corporate financial filings to be less than scintillating, you might try thumbing through Hipgnosis Songs Fund Ltd.’s 2021 annual report, which at times resembles an issue of Rolling Stone. There you’ll encounter glamorous, full-page portraits and interviews with artist-producer Mark Ronson, his face tilted in semi-profile like a Hollywood star; former Fleetwood Mac member Lindsey Buckingham, guitar in his hands; Eurythmics co-founder Dave Stewart, tipping his fedora; and Latin music superstar Shakira, her golden tresses swaying in the breeze or, more likely, animated by an in-studio fan.

What do all these hitmakers have in common? They sold their songwriting libraries to Hipgnosis, a Guernsey-based investment fund, started three years earlier by Merck Mercuriadis, whose own portrait—head shaved, outfit characteristically all-black—also appears in those pages. A consummate shoulder-rubber who endeared himself to rock stars and pop idols with his appreciation for their deepest cuts, Mercuriadis had negotiated these deals, along with ones for Neil Young, Barry Manilow, Blondie’s Debbie Harry and Chris Stein, as well as a flurry of other artists, for as much as or more than tens of millions of dollars each. It was all for the publicly traded fund, which, as he was fond of putting it, was the first one on the London Stock Exchange to invest solely in a new asset class: songs.

Senior Businessweek reporter Devin Leonard delves into the big business of buying song catalogs—and the triumphs and challenges faced by the man who turned it into a big business. Read more: The Rise and Fall of the Stock Market’s Music King, or listen to the story here.

Source: Bloomberg Europe

The UK government is still in its dual negotiations with both the US and EU – two separate teams pulling away in parallel, with briefing every day to suggest both are about to get something over the line. There’s also plenty of briefing that these teams are in fact working against each other, and that a EU deal will scupper the US one.

The case for the UK cosying up to Europe is bolstered by a story out today showing Europe is doing pretty well considering we’re a fortnight into Trump’s tariff era. Germany’s big bazooka of military spending, announced just before Trump’s tariffs, had also boosted the mood. Europe’s financial markets look more resilient than America’s at the minute, the euro the strongest it’s been in three years, and German bonds last week beat US Treasuries “by the most ever,” according to our team.

They go on: “Europe’s long-sluggish financial markets are being shocked into life as Donald Trump’s drive to reshape global trade and security undermines America’s decades-long dominance. Across assets of all stripes, the Old Continent is collectively trouncing America in a way that’s rarely been seen before.”

Remember this is in the context of Europe being the butt of all political and economic jokes a few months back (this year’s Davos was dominated by a sense that the US was boom town and Europe doom town). The view then was that Europe was being humiliated by America’s tech stocks, was struggling without cheap energy — and with an ageing population and creaking public finances, managed decline was the best the continent could hope for.

Well it all feels different now. I loved this quote: “There’s this feeling that Europe is just a museum; well, the museum is now coming to life,” said by Catherine Braganza, who’s been buying European high-yield bonds for the funds she manages at Insight Investment in London.

So it’s no surprise that Keir Starmer and Rachel Reeves are so keen to announce a security and defense pact as part of the refreshing of the post-Brexit trade deal. Our Ellen Milligan is always revealing details of the direction of travel here. The trouble is, the Brexiteer OGs – David Frost and Nigel Farage – are warning that if the prime minister signs the UK up to EU food and veterinary standards, it shuts the door on American products coming into the UK in any trade deal.

So that’s the politics, but how long will Europe’s new found economic bounce last? How much is this European renaissance a function of the world being seven days into the 90-day trade truce that Donald Trump stunned the world with precisely a week ago? What if, once those 90 days end, Europe reverts to receiving 20% tariffs from the US? As with so much we are processing right now, much of the data we are dealing with is out of date.

Even inflation today, coming in below expected at 2.6% in the 12 months to March, is from another era. It doesn’t yet price in the bumper bill increases that have come our way this month which suggest inflation will shortly go back up again.

Yet not all are convinced this will happen, with an argument that inflation could go down further with tariffs if Europe and Asian markets send cheaper goods our way and provide the bank with “more room to cut rates.” As with almost everything right now — we are in the fog of a trade war.

Source: Bloomberg Europe

Reactions among market analysts and participants remain divided. Michael Wilson from Morgan Stanley suggests both crypto and stock markets may maintain a sideways trend. Markus Thielen, Founder of 10X Research, shared that "while easing measures and relaxed tariff discussions could support Bitcoin's recovery, immediate catalysts for a dramatic surge appear limited."

Bitcoin has recently exhibited renewed momentum, with its price circulating around $85,000 as observed on April 17, 2025, supported by emerging optimism among traders. This shift in sentiment highlights the market's anticipation for upcoming tariff policy announcements and global economic developments.

Bitcoin Nears $85,000 Amid Policy Anticipation

Crypto analytics firm Santiment reports a positive shift in the cryptocurrency market, as Bitcoin's price experiences a late rally. This increase marks a recovery from a recent low of $74,500. As the value reaches $85,000, traders' attitudes shift towards optimism.

Key changes include a noticeable increase in traders' confidence, with Bitcoin now showing signs of reclaiming the $90,000 threshold. Market indicators such as the Network Realized Profit/Loss suggest sustained future rallies, aligning with rising wallet balances and decreasing exchange supplies.

Reactions among market analysts and participants remain divided. Michael Wilson from Morgan Stanley suggests both crypto and stock markets may maintain a sideways trend. Markus Thielen, Founder of 10X Research, shared that "while easing measures and relaxed tariff discussions could support Bitcoin's recovery, immediate catalysts for a dramatic surge appear limited."

Analysts See Regulation, Economic Shifts Driving Stability

Did you know? Historically, periods of deep bearish sentiment in crypto markets have often led to strong upward price movements. This pattern appears recurrent in current circumstances, reflecting a consistent reaction mechanism.

CoinMarketCap reports Bitcoin's current standing with a price of $84,902.44, rebounding with a 9.72% gain over the week. The market cap is $1.69 trillion, dominating 63.16% of the market. Supply circulation continues toward its 21 million cap, maintaining significant interest.

Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 16:08 UTC on April 16, 2025. Source: CoinMarketCap

Analysts from Coincu highlight potential economic impacts from evolving global policies. They foresee potential market interventions as regulators consider digital currency strategies. While the market adjusts to these shifts, Bitcoin is likely to stay relatively stable, contingent on upcoming global economic policies and technological advancements.

Source: CryptoSlate