FX Stable As Markets Eye ECB Meeting

Source: AP

BEIJING (April 17): China's commerce ministry on Thursday urged the United States to stop putting "extreme pressure" on the world's second-largest economy and demanded respect in any trade talks, but the two sides remained at an impasse over who should start those talks.

The Donald Trump administration has been ramping up pressure on China by raising import tariffs on Chinese goods in recent months. On Tuesday, the White House published a fact sheet stating that China now faces up to a 245% tariff.

The Chinese commerce ministry has criticised the tariffs as irrational and said Beijing will ignore the "meaningless" tariff numbers game. It has also warned that China will "fight to the end" if the US.insists on heaping substantial damage on China's rights and interests.

"The unilateral tariff increases were entirely initiated by the United States," He Yongqian, a Chinese commerce ministry spokesperson, told a weekly news conference.

Unlike a number of nations that have responded to Trump's "reciprocal tariffs" by seeking deals with Washington, Beijing has been upping its own levies on US goods in response and has not sought talks, which it says can only be conducted on the basis of mutual respect and equality.

Washington said on Tuesday that Trump was open to making a trade deal with China but Beijing should make the first move and that "the ball is in China's court".

"We urge the United States to immediately stop extreme pressure, coercion and blackmail, and resolve differences with China through equal dialogue on the basis of mutual respect," the commerce ministry spokesperson said.

The commerce ministry has been maintaining working-level communication with its US counterparts, she said, adding that China is open to economic and trade consultations with the United States.

But "the person who tied the bell must be the one who unties it," she said, using a Chinese proverb.

Source: Theedgemarkets

Trade barriers can come in many forms. Tariffs are just one. Onerous licensing requirements, export restrictions and fines on shipping are other obstacles.

Nvidia said Tuesday it would be taking a $5.5 billion charge related to canceled chip exports to China because of new licensing rules from the U.S. government. Beijing has retaliated to Trump tariffs by implementing export restrictions on rare earth elements and increasing antitrust scrutiny on U.S. firms. Donald Trump's administration has been floating the idea of imposing levies on Chinese-made containerships calling at U.S. ports.

Given those developments, the World Trade Organization warned on Wednesday that the outlook for global trade has "deteriorated sharply," and forecast a 0.2% decline in 2025. It's not mere fearmongering: Shipping vessels originating from China are already canceling their journeys.

Conditions in the stock market have likewise worsened. U.S. stocks fell Wednesday as export restrictions on Nvidia kept investors jittery. Trade — in all contexts — is getting hammered by the onslaught of U.S. President Donald Trump's tariffs.

What you need to know today

U.S. markets rocked by renewed trade jittersU.S. stocks slumped

Wednesday, hitting session lows after U.S. Federal Reserve Chair Jerome Powell's speech on inflation and tariffs. The S&P 500 lost 2.24% and the Dow Jones Industrial Average fell 1.73%. The Nasdaq Composite sank 3.07%, weighed down by heavy declines in chip stocks amid reports of new U.S. licensing requirements for Nvidia exports. The chipmaker's shares sank 6.9%.

Asian markets break from Wall Street

Asia-Pacific markets were mostly in the green Thursday. South Korea's Kospi added around 1% as the country's central bank expectedly held its benchmark interest rate at 2.75%. Japan's Nikkei 225 climbed roughly 1.2% even as the country reported a 3.9% rise in its exports in March, missing estimates and sharply lower the 11.4% jump in February.

Tension in dual mandate

Powell on Wednesday expressed concern that the central bank "may find ourselves in the challenging scenario in which our dual-mandate goals are in tension." The Fed aims to ensure stable prices and full employment. Economists, including those at the Fed, see threats to both goals from Trump tariffs, which are "likely to move us further away from our goals," Powell said in a question-and-answer session.

WTO warns of world trade disorganization

"The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty," the World Trade Organization warned in its latest "Global Trade Outlook and Statistics" report out Wednesday. Based on the tariffs currently in place, and including a 90-day suspension of "reciprocal tariffs," the volume of world merchandise trade is now expected to decline by 0.2% in 2025.

Freight ships from China canceling trips

U.S. importers are being notified of an increase in canceled sailings by freight ships out of China: A total of 80 blank, or canceled, sailings out of China have been recorded by freight company HLS Group. The impact of the diminished freight container traffic to North America will be significant for many links in the economy and supply chain, including the ports and logistics companies moving the freight.

TSMC earnings beat expectations

Taiwan Semiconductor Manufacturing Company reported Thursday first-quarter earnings that beat analyst expectations. The chip manufacturing company's net income increased 60.3% from a year ago to NT$361.56 billion ($11.1 billion), while net revenue in the March quarter rose 41.6% to NT$839.25 billion from the same period last year. Demand for artificial intelligence chips has boosted TSMC's fortunes, but Trump tariffs pose a threat to its future earnings.

[PRO] Still confident on dollar: Piper Sandler

The dollar index, which measures the greenback against a basket of major currencies, fell last week to its lowest point since April 2022 amid heightened uncertainty from Trump tariffs. More alarmingly, the U.S. dollar is typically viewed as a safe-haven asset in times of volatility, so its weakening has raised concerns. Piper Sandler, however, is still confident on the currency — here's why.

And finally...

China targets U.S. services and other areas as it decries ‘meaningless’ tariff hikes on goods

China last week announced it was done retaliating against U.S. President Donald Trump's tariffs, saying more increases by the U.S. would be a "joke," and Beijing would "ignore" them.

Instead of continuing to focus on tariffing goods, China has chosen to resort to other measures, including steps targeting the American services sector. Beijing has rolled out a series of non-tariff restrictive measures, such as widening export controls of rare-earth minerals and opening antitrust probes into American companies.

Additionally, China is seen by some as seeking to broaden the trade war to encompass services trade — which covers travel, legal, consulting and financial services — where the U.S. has been running a significant surplus with China for years.

Source: CNBC

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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