Trade War vs. Record M2 Money Supply: 5 Things to Know in Bitcoin This Week

Above: EUR/CNY at 10-minute intervals with US 10 and 30-year yields, and GB 10 and 30-year yields. Click the image for more detailed inspection.

Above: EUR/CNY, USD/CNY, USD/CNY at hourly intervals with US 10 and 30-year yields. Click the image for more detailed inspection.

Source: Poundsterlinglive

Source: Reuters

Source: Euronews

WASHINGTON (April 14): U.S. President Donald Trump on Sunday said he would be announcing the tariff rate on imported semiconductors over the next week, adding that there would be flexibility with some companies in the sector.

The president's pledge means that the exclusion of smartphones and computers from his reciprocal tariffs on China likely will be short-lived as Trump looks to reset trade in the semiconductor sector.

"We wanted to uncomplicate it from a lot of other companies, because we want to make our chips and semiconductors and other things in our country," Trump told reporters aboard Air Force One as he traveled back to Washington from his estate in West Palm Beach.

Trump declined to say whether some products such as smartphones might still end up being exempted, but added: "You have to show a certain flexibility. Nobody should be so rigid."

Earlier in the day, Trump announced a national security trade probe into the semiconductor sector.

"We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations," he posted on social media.

The White House had announced the exclusions from steep reciprocal tariffs on Friday, creating some hope that the tech industry might escape being ensnared in the escalating conflict between the two nations and that everyday consumer products such as phones and laptops would remain affordable.

However, Trump's commerce secretary, Howard Lutnick, earlier on Sunday made clear that critical technology products from China would face separate new duties along with semiconductors within the next two months.

Trump's back-and-forth on tariffs last week triggered the wildest swings on Wall Street since the COVID pandemic of 2020. The benchmark Standard & Poor's 500 index is down more than 10% since Trump took office on January 20.

Lutnick said Trump would enact "a special focus-type of tariff" on smartphones, computers and other electronics products in a month or two, alongside sectoral tariffs targeting semiconductors and pharmaceuticals. The new duties would fall outside Trump's so-called reciprocal tariffs, under which levies on Chinese imports climbed to 125% last week, he said.

"He's saying they're exempt from the reciprocal tariffs, but they're included in the semiconductor tariffs, which are coming in probably a month or two," Lutnick said in an interview on ABC's "This Week," predicting the levies would bring production of those products to the United States.

Beijing increased its own tariffs on U.S. imports to 125% on Friday in response. On Sunday, before Lutnick's comments, China said it was evaluating the impact of the exclusions for the technology products implemented late on Friday.

"The bell on a tiger's neck can only be untied by the person who tied it," China's Ministry of Commerce said.

Billionaire investor Bill Ackman, who endorsed Trump's run for president but who has criticized the tariffs, on Sunday called on him to pause the broad and steep reciprocal tariffs on China for three months, as Trump did for most countries last week.

If Trump paused Chinese tariffs for 90 days and cut them to 10% temporarily, "he would achieve the same objective in causing U.S. businesses to relocate their supply chains from China without the disruption and risk," Ackman wrote on X.

'CHANGES EVERY DAY'

Sven Henrich, founder and lead market strategist for NorthmanTrader, was harshly critical of how the tariff issue was being handled on Sunday.

"Sentiment check: The biggest rally of the year would come on the day Lutnick gets fired," Henrich wrote on X. "I suggest the administration figures out who controls the message, whatever it is, as it changes every day. U.S. business can't plan or invest with the constant back and forth."

U.S. Senator Elizabeth Warren, a Democrat, criticized the latest revision to Trump's tariff plan, which economists have warned could dent economic growth and fuel inflation.

"There is no tariff policy - only chaos and corruption," Warren said on ABC's "This Week," speaking before Trump's latest post on social media.

In a notice to shippers late on Friday, the U.S. Customs and Border Protection agency published a list of tariff codes excluded from the import taxes. It featured 20 product categories, including computers, laptops, disc drives, semiconductor devices, memory chips and flat panel displays.

In an interview on NBC's "Meet the Press," White House trade adviser Peter Navarro said the U.S. has opened an invitation to China to negotiate, but he criticized China's connection to the lethal fentanyl supply chain and did not include it on a list of seven entities - the United Kingdom, the European Union, India, Japan, South Korea, Indonesia and Israel - with which he said the administration was in talks.

Trade Representative Jamieson Greer said on CBS's "Face the Nation" that there were no plans yet for Trump to speak to Chinese President Xi Jinping on tariffs, accusing China of creating trade friction by responding with levies of its own. But he expressed hopes for some non-Chinese deals.

"My goal is to get meaningful deals before 90 days, and I think we're going to be there with several countries in the next few weeks," Greer said.

Ray Dalio, the billionaire founder of the world's biggest hedge fund, told NBC's "Meet the Press" that he was worried about the United States sliding into recession, or worse, as a result of the tariffs.

"Right now we are at a decision-making point and very close to a recession," Dalio said on Sunday. "And I'm worried about something worse than a recession if this isn't handled well."

Source: Theedgemarkets

China has played down the risk of damage to its exports from Donald Trump’s tariffs, with an official saying the “the sky won’t fall”, as stock markets rose on Monday amid signs of a retreat on electronics restrictions.

The world’s second-largest economy has diversified its trade away from the US in recent years, according to Lyu Daliang, a customs administration spokesperson, in comments reported by state-owned agency Xinhua.

China has retaliated forcefully to Washington’s tariffs, with 125% levies on US imports against the US’s total of 145% border taxes on goods moving the other way. The trade war has prompted turmoil on financial markets since Trump first revealed tariffs on every country in the world on 2 April. Since then he has partly retreated on the highest levies on most trading partners for at least 90 days, but has doubled down in his spat with China.

The White House offered further relief over the weekend with an exemption from the steepest tariffs for electronics including smartphones, laptops and semiconductors. Trump officials later appeared to walk that back with the commerce secretary, Howard Lutnick, saying such devices would be “included in the semiconductor tariffs which are coming in probably a month or two”.

Trump said on Sunday night on his social network, Truth Social, that “NOBODY is getting ‘off the hook’”, highlighting that smartphones are still subject to 20% levies and suggesting they could still rise higher.

However, investors on Monday appeared unconvinced by Trump’s attempts to play down the retreat. Japan’s Nikkei gained 1.2% while Hong Kong’s Hang Seng rose by 2.2% and the Shanghai and Shenzhen exchanges climbed by 0.8% and 1.2%, respectively. European stock market indices also jumped in opening trades, with London’s FTSE 100 up by 1.6%, Germany’s Dax up 2.2%, and France’s Cac 40 up 2%.

“The sky won’t fall” for Chinese exports,” China’s Lyu said. “These efforts have not only supported our partners’ development but also enhanced our own resilience”.

The customs report also played up China’s “vast domestic market”, and said “the country will turn domestic certainty into a buffer against global volatility”. China has increasingly tried to stimulate private consumption.

China’s president, Xi Jinping, on Monday criticised the US tariffs, during a visit to Vietnam. Vietnam has in recent decades grown to become the eighth largest source of goods for US consumers, but it is facing the threat of 46% tariffs when Trump’s 90-day pause expires.

In an article in a Vietnamese newspaper, Xi said that a “trade war and tariff war will produce no winner, and protectionism will lead nowhere”.

Source: Theguardian

The dollar drifted lower on Monday, while the Japanese yen and the euro progressed higher as investor confidence in the world's reserve currency remained in question following a stream of tariff-related pronouncements from U.S. PresidentDonald Trump.

Investors braced for another volatile week as Trump's imposition and then abrupt postponement of tariffs on goods imported to the U.S. continued to sow confusion.

"Markets right now are trading the uncertainty, and that has not been helped over the weekend by the contradictory stories coming out of the U.S. administration," said Nick Rees, head of macro research at Monex Europe.

"That really skews risks for the time being towards further dollar weakness as markets try to avoid some of this uncertainty by hiding basically anywhere that isn't in the U.S."

The euroclimbed 0.2% against the dollar to $1.139, hovering close to its three-year high hit on Friday as investors flocked to the common currency following a crisis of confidence in the dollar.

Growing nervousness among investors over owning U.S. assets has caused some to dump those positions and move money into other markets including Europe, boosting the euro.

Against the Swiss franc, the dollar see-sawed between gains and losses and was steady at 0.8169 francs at 0822 GMT.

Sterlingrose 0.3% to $1.317, while the New Zealand dollarrose to a four-month high of $0.5888.

Trump on Sunday said he would announce the tariff rate on imported semiconductors over the next week, adding that there would be flexibility towards some companies in the sector.

The White House on Friday granted an exclusion from steep tariffs for smartphones, computers and certain other electronics imported largely from China. Trump later said the move would be short-lived.

Against the yen, the dollarfell 0.4% to 142.91.

Japan is gearing up for trade negotiations with the United States that will likely touch on the thorny topic of currency policy, with some officials privately bracing for Washington to call on Tokyo to prop up the yen.

Japanese Economy Minister Ryosei Akazawa said on Monday that foreign exchange issues would be dealt with between Finance Minister Katsunobu Kato and U.S. Treasury Secretary Scott Bessent.

"Markets jumped the gun on pricing in further yen strength on confirmation that Bessent and Kato will discuss FX," said Christopher Wong, a currency strategist at OCBC.

The Australian dollarwas up 0.7% at $0.63395, extending its more than 4% gain from last week.

Against a basket of currencies, the U.S. dollarlanguished near Friday's three-year low at 99.36.

A steep sell-off in the U.S. Treasury market last week, owing in part to a rapid unwinding of so-called basis trades by hedge funds, was a huge drag on the dollar.

There was scant sign of any recovery in bonds on Monday with 10-year yields at 4.46%, starting the week roughly steady after the largest weekly rise in borrowing costs in decades.

The onshore yuansteadied at 7.3006 per dollar, while its offshore counterpartfell to 7.3061 per dollar.

The offshore yuan struck a record low last week while the onshore unit sank to its lowest since 2007 as the trade war between the United States and China intensified.

Data on Monday showed China's exports rose sharply in March after factories rushed out shipments before the latest U.S. tariffs took effect.

Source: TradingView