Bessent Says ‘It’s Up to China to De-Escalate’ in Trade War

China–U.S. Trade War

Summary:

Treasury Secretary Scott Bessent said “all aspects” of the US government are in contact with China but that it’s up to Beijing to take the first step in de-escalating the tariff fight with the US due to the imbalance of trade between the two nations.

“We’ll see where this goes,” Bessent said in an interview with CNBC. “As I’ve repeatedly said, I believe it’s up to China to de-escalate because they sell five times more to us than we sell to them, so these 125% tariffs are unsustainable.”

The Chinese exempting some goods from tariffs indicates they are interested in reducing tensions, Bessent said, adding that he has “an escalation ladder in my back pocket and we’re very anxious not to have to use it.” Escalation could include an “embargo,” he said.

Bessent said the US has put China to the side for now as it seeks trade deals with between 15 to 17 other countries. He said he wouldn’t be surprised if a trade deal with India is the first to be announced.

Bessent also said that US officials met with their Chinese counterparts during the IMF-World Bank meetings in Washington, DC, last week to talk about “financial stability” but did not indicate that trade discussions came up during the talks.

Source: Bloomberg Europe

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Stocks

US equity futures posted small moves as investors awaited reports from American companies worth $20 trillion, and watched for progress in US trade talks with Asian partners.

Wild gyrations sparked by President Donald Trump’s April 2 tariff announcements have eased somewhat, but investors will be scrutinizing this week’s key company reports for the earnings impact of US trade policies. Fresh readings on the state of the American economy may support hopes of earlier-than-expected Federal Reserve interest-rate cuts.

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Contracts for the S&P 500 were little changed following a four-day rally in US equities, the longest winning streak since January. Europe’s Stoxx 600 rose 0.5%, boosted by M&A news out of Italy as Mediobanca made a €6.3 billion ($7.1 billion) offer for the wealth management arm of Italian insurer Assicurazioni Generali SpA.

Yields on benchmark 10-year Treasuries climbed five basis points, while the dollar traded little changed. Gold dropped as much as 1.6% as traders unwound positions on signs the metal’s advance may have run too far and too fast.

Four of the so-called Magnificent Seven — Microsoft Corp., Apple Inc., Meta Platforms Inc. and Amazon.com Inc. — are due to report earnings this week. Analysts expect the group — which also includes Google-parent Alphabet Inc., Tesla Inc. and Nvidia Corp. — to deliver an average of 15% profit growth in 2025, a forecast that’s barely budged since the start of March despite the flareup in trade tensions.

In terms of market capitalization, it’s the busiest week of the year for earnings, with S&P 500-listed companies worth $20 trillion reporting.

Meanwhile, Friday’s US non-farm payrolls figures will also turn attention to the health of the American economy.

“In general I think this week’s data won’t be too bad for the economy because it really precedes the announcement of tariffs,” Kathy Jones, chief fixed income strategist at Charles Schwab & Co., told Bloomberg TV. “The inflation numbers shouldn’t be too bad. But I’ll really be watching the ISM numbers at the end of the week and of course, the jobs data where we could see some softness.”

In premarket trading, Boeing Co. shares gained as Airbus SE agreed to take over some assets and sites from Spirit AeroSystems, clearing the way for Spirit to be acquired by Boeing. Nvidia slipped on a Wall Street Journal report that Huawei is getting ready to test an artificial intelligence processor that the Chinese tech giant hopes can replace some Nvidia products.

Investors are also watching for any signs of progress in US trade negotiations after Trump suggested another delay to his higher tariffs was unlikely. Asian economies, facing some of the highest US “reciprocal” tariffs, are leading the way over their western counterparts in talks with the administration.

“Ultimately, it seems that we’re moving towards a place where these policies start to make a little more sense,” Themistoklis Fiotakis, global head of FX strategy at Barclays Plc, told Bloomberg TV. “If this starts shaping up in a place where markets can understand it, can quantify it, then I think that things are going to normalize.”

To help manage the next steps, the Trump team has drafted a framework to handle negotiations with about 18 countries, including a template that lays out common areas of concern to guide the discussions.

US Treasury Secretary Scott Bessent said the administration is working on bilateral trade deals with 17 key partners, not including China. Bessent reiterated the administration’s argument that Beijing will be forced to the negotiating table because China can’t sustain Trump’s latest tariff level of 145% on Chinese goods.

Its standoff with China will likewise limit the potential benefits the US can reap from deals with Asian trading partners, according to Phoenix Kalen, global head of emerging markets research at Societe Generale SA.

“Already there has been a lot of investor sentiment and positioning for some deals to be done, especially with Japan, especially with South Korea,” Kalen told Bloomberg TV. “But the scope is going to be relatively limited and hampered. The concern especially for Asian trade partners around how China will respond to the terms will limit the extent to which they can agree to certain terms with the Trump administration.”

Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 7:52 a.m. New York time

Nasdaq 100 futures were little changed

Futures on the Dow Jones Industrial Average were little changed

The Stoxx Europe 600 rose 0.5%

The MSCI World Index rose 0.1%

Currencies

The Bloomberg Dollar Spot Index was little changed

The euro was little changed at $1.1354

The British pound rose 0.2% to $1.3340

The Japanese yen rose 0.2% to 143.37 per dollar

Cryptocurrencies

Bitcoin rose 1.1% to $95,344.86

Ether rose 0.9% to $1,819.53

Bonds

The yield on 10-year Treasuries advanced five basis points to 4.28%

Germany’s 10-year yield advanced four basis points to 2.51%

Britain’s 10-year yield advanced four basis points to 4.52%

Commodities

West Texas Intermediate crude fell 0.2% to $62.89 a barrel

Spot gold fell 0.8% to $3,293.45 an ounce

Source: Bloomberg

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Warren Takunda

Cryptocurrency

Peter Chung, head of research at quantitative trading firm Presto, has repeated his prediction that Bitcoin will reach $210,000 by the end of 2025.

In an April 28 interview with CNBC, Chung cited institutional adoption and global liquidity expansion as the primary drivers behind his long-term bullish outlook.

The analyst acknowledged that market conditions this year haven’t been as expected, specifically the challenging macroeconomic environment and market reaction.

However, he described the recent corrections as a “healthy” adjustment, suggesting they have laid a stronger foundation for Bitcoin’s progression toward becoming a mainstream financial asset.

“In hindsight, I think it was actually a healthy correction which has paved the way for the further re-rating of Bitcoin as a mainstream asset,” he said.

Bitcoin’s dual role

Chung also discussed Bitcoin’s dual nature, describing it as both a “risk-on asset” and “digital gold.”

He said that Bitcoin typically behaves like a high-risk asset driven by user adoption and network effects.

However, during periods of financial instability, such as the 2022 outbreak of the Russia-Ukraine conflict or the 2023 Silicon Valley Bank collapse, Bitcoin tends to act as a safe-haven asset, similar to gold.

“These moments are rare,” Chung explained, “[They] only happened when the market has doubts about the stability of the US dollar-dominated financial system.”

While Bitcoin has lagged behind gold during recent market turbulence, Chung suggested BTC could “catch up” and potentially outperform traditional safe-haven assets by year’s end.

Chung also reaffirmed Presto’s target for Ether, maintaining its valuation model based on the ETH-to-BTC ratio, reflecting confidence in Ethereum’s ongoing network improvements.

Bitcoin hits $94,000 as institutional adoption expands

Echoing Chung’s view, Bitwise CEO Hunter Horsley said in a recent post on X that Bitcoin’s surge to $94,000 has occurred with minimal retail participation, noting that Google searches for “Bitcoin” remain near long-term lows.

According to Horsley, the current rally is being driven by institutional investors, financial advisers, corporations, and even nation-states.

“The types of investors buying Bitcoin is expanding,” Horsley said. Bitcoin Could Hit $210K in 2025, Says Presto Research Head_1

Hunter Horsley pointing out growing Bitcoin adoption among institutions. Source: Hunter Horsley

Corporate Bitcoin treasuries already hold nearly $65 billion worth of BTC, according to data from BitcoinTreasuries.NET.

On April 22, analysts from Standard Chartered and Intellectia AI said institutional Bitcoin demand from exchange-traded funds and traders seeking to hedge against macroeconomic risk could cause Bitcoin’s price to more than double this year.

Source: Cointelegraph

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Adam

Economic

China–U.S. Trade War

President Trump's first 100 days back in office clearly transformed America's political landscape, but a range of big-ticket items are still in progress, with tariffs atop the list for markets.

The uncertainty there appears likely to stretch at least into the summer, with a series of conflicting statements from Trump and his aides in recent days providing little in the way of guidance.

Tariffs appear to also be the biggest drag on Trump's waning popularity, with a New York Times poll tracker showing the steady decline of the president's approval ratings, especially after "Liberation Day" on April 2 when he unveiled his reciprocal tariff plans.

Since then, Trump and his team have offered countless conflicting summaries of the latest on key trade issues. The uncertainty continued this past weekend ahead of the official 100-day marker on Tuesday.

Unclear as ever are how negotiations are going, what deescalation might look like, and even whether talks with China are underway.

"I've made 200 deals," Trump claimed in an interview with Time conducted last week. Two days later, he told reporters it would be "physically impossible" to negotiate many of the deals before a deadline this July.

In comments this past weekend, Trump appeared to pivot even further from a focus on deals to lower rates, saying tariff talks with foreign leaders are ongoing but suggesting tariffs could lead to tax cuts because "we're going to be taking in a tremendous amount of money."

Treasury Secretary Scott Bessent offered a new summary of the approach on Sunday, telling ABC, "in game theory, it's called strategic uncertainty."

It's emblematic of Trump's approach that has increased the uncertainty around key economic issues that are nowhere near finality 100 days in.

And it's a dynamic being felt on a range of fronts from taxes, where an effort in Congress has been slowed, to the war in Ukraine, a fragile ceasefire in Gaza, and elsewhere.

As Trump has stretched his unilateral executive authority to new heights and signed new presidential actions nearly every day — including a historic wave after being sworn in — he has found progress to be much slower when working with outside groups from Congress to foreign nations.

'I will act with historic speed'

For Trump, he often promised the opposite as he came into office.

"Starting tomorrow, I will act with historic speed and strength and fix every single crisis facing our country," Trump proclaimed at a rally the night before taking the oath of office for a second time.

After his "Liberation Day" trade announcement, at least some Trump aides were talking about 90 deals in 90 days, but the last month has seen no deals inked.

And many of the foreign nations are pushing back on Trump's timelines.

South Korea has often been touted as being one of the "first in line," but the country's vice industry minister reportedly said this weekend he sees no chance of clinching a comprehensive trade agreement before a presidential election in June.

On Sunday, speaking about the chances of a deal with China, Trump offered that a "little bit" of progress had been made but would only say that "something's going to happen that's going to be possible."

Progress on Trump's Capitol Hill agenda also remains in limbo in spite of early promises.

"We'll have legislation prepared for him to sign into law," House Speaker Mike Johnson promised just five days before Trump's inauguration. "It's going to be a very aggressive first 100 days agenda."

But progress has been much slower, especially on the key issue of taxes.

Johnson and Senate Majority Leader John Thune have forced their members into line on a series of procedural votes, but a range of policy issues remain unresolved.

Lawmakers are returning this week after a two-week break with hopes for progress.

But perhaps emblematic of the slow pace is that the main tax development expected on Trump's 100th day in office, which falls on Tuesday, is a Senate vote not to advance the bill but another step to confirm longtime tax expert Kenneth Kies to be an assistant secretary of the Treasury.

Kies is expected to play an important role in eventually hammering out a bill.

Source: yahoo

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Glendon

Economic

Political

As Canada holds an election on Monday, Prime Minister Mark Carney's Liberals are ahead of Pierre Poilievre's Conservatives in national opinion polls. The New Democratic Party led by Jagmeet Singh is in a distant third place, while the separatist Bloc Quebecois, which only campaigns in the predominantly French-speaking province of Quebec, is in fourth.

In a close race, votes in a few electoral districts, called ridings in Canada, could make all the difference in who is prime minister.

BURNABY CENTRAL, BRITISH COLUMBIA

The result here could help show whether the left-leaning New Democrats, who compete with the Liberals for the center-left vote, have a future. Burnaby Central is a new riding, replacing Burnaby South. This was held by NDP leader Jagmeet Singh, who kept former Prime Minister Justin Trudeau's minority Liberal government in power for more than two years in return for more social spending.

Singh, who is the NDP candidate, says Canadians benefited because as a result of the deal, Liberals passed legislation increasing access to healthcare. But polls suggest he is running third in the new riding as left-leaning voters coalesce behind the Liberals.

2021 election result in Burnaby South – NDP 40.3%; Liberal 30.4%; Conservatives 22.4%.

AURORA—OAK RIDGES—RICHMOND HILL, ONTARIO

Key to any victory is the so-called Golden Horseshoe, a riding-rich crescent that sits on Lake Ontario and includes Toronto as well as other cities. The Conservatives held Aurora—Oak Ridges—Richmond Hill from 2018 to 2021. If they are to take advantage of unhappiness over living costs, immigration and a housing crisis – factors that dominated politics before U.S. PresidentDonald Trumpbegan threatening tariffs and annexation - the riding is a key target.

2021 election result – Liberal 45.2%; Conservatives 42.1%.

TROIS-RIVIERES, QUEBEC

Any party wishing to win power must also perform well in Quebec, which has the second-largest number of seats in the House of Commons. It is the only province with its own party, the Bloc, which is seeking independence for the province and whose fortunes can swing wildly. Trois-Rivieres is one of several in Quebec where three (and sometimes four parties) contend for the vote. The 2021 result was tight, with the Bloc winning by just 83 votes of the 58,110 that were cast.

2021 election result – Bloc Quebecois 29.5%; Conservative 29.4%; Liberal 28.6%.

EDMONTON SOUTHEAST, ALBERTA

The Liberals have traditionally fared poorly in the western oil-producing province of Alberta, thanks to former Liberal Prime Minister Pierre Trudeau, who introduced unpopular energy policies in the 1980s. Some of this enmity rubbed off on his son, former Prime Minister Justin Trudeau, who at best only won a handful of Alberta seats. Now that Justin Trudeau is gone, the Liberals have a chance to repair their reputation. Ex-Liberal cabinet minister Amarjeet Sohi is running in the new riding of Edmonton Southeast, and if he wins, it will be a sign the party can succeed even in hostile territory.

CUMBERLAND-COLCHESTER, NOVA SCOTIA

The four provinces in Atlantic Canada, which contain a total of 32 seats and report their results first, often offer an early indication as to how the election might go. The region is politically volatile and results can swing broadly. The Liberals won Cumberland-Colchester by a few hundred votes in 2019 but lost it to the Conservatives in 2021.

2021 election result - Conservatives 46.0%; Liberals 34.2%; NDP 12.3%.

BURLINGTON, ONTARIO

This Ontario riding southwest of Toronto is the ultimate in Canadian bellwethers, having elected a legislator from the winning party for 12 consecutive elections going back to 1984.

2021 election result - Liberals 45.7%; Conservatives 37.3%; NDP 10.9%.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

China–U.S. Trade War

Here are the most important news items that investors need to start their trading day:

Inching back

Stock futures slid Monday as investors looked ahead to a jammed week of earnings reports and economic data. The three major U.S. indexes climbed last week and have now recovered much or all of what they lost after President Donald Trump announced steep tariffs on dozens of countries at the start of the month – which he has since temporarily lowered. The S&P 500 has fallen 1.5% so far in April, while the Dow Jones Industrial Average has dropped 4.5%. The Nasdaq Composite has gained 0.5%. In addition to hearing how some of the most important companies in the world are faring, investors will also digest first-quarter gross domestic product and the Fed’s preferred inflation metric, both out Wednesday, followed by the April jobs report on Friday. Follow live market updates.

Earnings extravaganza

The busiest week of earnings season is upon Wall Street. About one-third of both the S&P 500 and Dow will post results this week. Those include four of the so-called Magnificent Seven – Apple, Amazon, Meta and Microsoft – along with major consumer brands like Coca-Cola, Starbucks, McDonald’s and Eli Lilly. Investors will be watching whether any companies reduce or withdraw their financial guidance because of tariffs or lower consumer spending. Several restaurants, airlines and consumer packaged goods companies took that step last week. Here are the key reports to watch:

Tuesday: UPS , Pfizer, Coca-Cola (before the bell); Starbucks (after the bell)

Wednesday: Yum Brands, Etsy (before the bell); Meta, Microsoft, Qualcomm (after the bell)

Thursday: CVS, Eli Lilly, McDonald’s (before the bell); Apple, Amazon, Airbnb, Reddit, Block (after the bell)

Friday: Chevron, Exxon Mobil (before the bell)

Saturday: Berkshire Hathaway

China crunch

Trump’s tariff on Chinese imports is starting to hit businesses in the country. Some manufacturers are either trying to find new markets or stopping production in the face of the 145% duty the U.S. has imposed on many goods. “I know several factories that have told half of their employees to go home for a few weeks and stopped most of their production,” said Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions. Many of the most affected businesses make toys, sporting goods or low-cost items sold at places like dollar stores.

Pall of duty

The threat of tariffs has caused U.S. consumers to spring early for some major purchases like cars and iPhones. But in many other areas, shoppers are holding out because of the duties and economic uncertainty. “There’s so much uncertainty right now that shoppers just don’t know what to do,” said Steve Zurek, vice president of thought leadership at NielsenIQ. “There’s nowhere to hide here — all they can do is control the household economics they have.”

Losing altitude

Domestic airfare is falling in the U.S. Airline CEOs have said demand for domestic trips is falling as travelers digest tariffs and concerns about an economic slowdown, leaving empty seats in the back of planes. “Nobody really relishes uncertainty when they’re talking about what they could do on a vacation and spend hard-earned dollars,” American Airlines CEO Robert Isom said on a quarterly earnings call on Thursday. Even so, Americans are still traveling overseas in droves.

Source: cnbc

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Michelle

Forex

Political

The Canadian dollar is showing limited movement on Monday. In the European session, USD/CAD is trading at 1.3868, up 0.10% on the day. There are no economic releases out of the US or Canada today.

Liberals expected to win Canadian election

It’s Election Day in Canada. Prime Minister Mark Carney, who has only been in office since March, is favored to win the election. Carney’s Liberal Party was badly trailing the Conservatives but US President Trump has ignited Canadian nationalism and turned the election race upside down.

Trump has talked about annexing Canada and although most Canadians don’t expect that to happen, there is strong resentment against the US tariff policy, which has hit Canada even though the two countries have a free trade agreement.

Carney is viewed as a strong leader who can stand up to Trump and the markets have priced in a Liberal majority. If the Liberals are forced to make a coalition with the smaller parties, the new government would be considered less stable and that would likely trigger some CAD weakness. If the Conservatives manage to pull out a surprise election victory, the Canadian dollar would likely get a boost.

Canada’s retail sales dips in February, rebounds in March

Canada’s retail sales declined 0.4% m/m in February but bounced back in March with a strong gain of 0.7%. On an annualized basis, retail sales slipped to 4.7% in February, down from a revised 5.3% in January.

The improvement in March was driven by consumers making purchases ahead of US tariffs, but consumer spending is likely to deteriorate. The Bank of Canada will be keeping a close eye and will have to consider further rate cuts if upcoming economic data is weak. The BoC maintained the cash rate at 2.75% earlier this month and meets next on June 4.