Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
Global equity markets regained ground on Monday despite US warnings that a tariff reprieve for some consumer electronics would be temporary, as investors hoped tech groups and American consumers might be spared the worst of Donald Trump’s trade war.
US equity futures, European and Asian stocks rose after the White House exempted smartphones, laptops and other devices from Trump’s so-called reciprocal tariffs, including a 145 per cent levy on imports from China.
The carve-outs have been seen as a boost for Apple and other tech groups that rely heavily on Chinese factories to make iPhones and other goods.
Trump and other US officials played down the idea of a reprieve and said sectoral tariffs on electronics would still take effect as part of a government probe into semiconductors, which face a separate round of tariffs.
The US president wrote on his Truth Social platform: “NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!”
In comments later to journalists on Air Force One, Trump said his administration would show “flexibility” for some products and signalled to the market it would be speaking to key companies to discuss the tariffs.
Asked what the semiconductor tariff rate would be, Trump told reporters he would “be announcing it over the next week”.
After hitting a three-year low on Friday, the US dollar was down 0.8 per cent on Monday against a basket of trading partner currencies including the yen and pound sterling, as investors continued to be wary about increasing their exposure to US assets.
“Clearly the worries about . . . US assets are still in place”, said Mitul Kotecha, head of emerging markets macro strategy at Barclays, adding that the reprieve for electronics and chips “has been taken by some investors as potentially the first signs of a door open to a [US] deal” with China.
“Markets are taking whatever sign of relief they can,” he said.
Markets in Asia rebounded, led by Hong Kong’s Hang Seng index up 2.1 per cent, Japan’s Nikkei 225 index rising 1.2 per cent and the broad Topix up by 0.9 per cent.
Stock futures for the S&P 500 were up 1.3 per cent while those for the tech-heavy Nasdaq 100 rose 1.6 per cent in the European morning. In Europe, the FTSE 100 was up 1.4 per cent, while the Stoxx Europe 600 was 1.6 per cent higher in early trading.
Technology stocks were among the leaders in Europe when the market opened, with Dutch chipmakers Besi and ASML up 4.1 per cent and 3 per cent respectively.
The 10-year US Treasury yield, a crucial benchmark for expectations on future US growth, fell 0.03 percentage points to 4.46 per cent — still far above the 4.17 per cent yield it stood at before Trump’s tariff ‘liberation day’ on April 2.
China’s mainland CSI 300 rose 0.5 per cent as official data showed exports from the world’s second-largest economy leapt last month amid a rush to dispatch shipments before tariffs took effect.
Exports rose 12.4 per cent in US dollar terms in March on a year earlier, figures from China’s customs administration showed on Monday, well above expectations and the biggest rise since October.
Imports fell 4.3 per cent, a less steep contraction than the 8.4 per cent fall in the January-February period.
Read the full article here
