Brief Summary
This Bloomberg Television segment discusses the escalating trade war between the US and China, focusing on the impact on global markets and the strategies of both countries. Key takeaways include:
- China vows to "fight to the end" against US tariffs, refusing to back down from retaliatory tariffs.
- The yuan weakens, but China is unlikely to allow a significant depreciation due to concerns about capital flight.
- Global markets are volatile, with some rebounding after a record sell-off, but uncertainty remains high.
- Central banks are expected to ease monetary policy, but the Fed is unlikely to intervene to rescue the US economy from the damage caused by tariffs.
- Samsung's quarterly profit beats expectations, but the company faces challenges due to tariffs on its Vietnamese production.
- Chinese social media users are divided on the trade war, with some calling for Beijing to cede to US demands while others support the government's stance.
Bloomberg: The China Show opens
The segment begins with breaking news from the Ministry of Commerce in Beijing, where China vows to defend its rights and fight to the end against US tariffs. The Ministry also calls for dialogue with the US to resolve disputes, but emphasizes that China will not back down from its retaliatory tariffs. The segment then discusses the impact of the news on Asian markets, noting that Chinese equities are expected to bounce back but that the uncertainty surrounding the trade war will likely keep volatility high.
Breaking: China says ‘to fight to the end’ if US insists on new tariffs
China's Ministry of Commerce reiterates its commitment to fight to the end against US tariffs, emphasizing that they will not remove retaliatory tariffs. The Ministry also calls for dialogue but stresses that China will not back down from its stance. The segment highlights the deliberative nature of Chinese policymaking, contrasting it with the more impulsive approach of the US. The segment also discusses China's efforts to support its economy and markets, including potential fiscal stimulus, rate cuts, and intervention by state-backed funds to buy ETFs.
Alert: Taiwan stocks drop, extending weakness after record selloff
Taiwan stocks continue to decline, extending a record selloff after the US imposed a 32% tariff on Taiwan, one of the highest in Asia. The segment highlights the impact of the tariffs on Taiwan's tech-heavy index, particularly TSMC, which is still in negative territory despite the exclusion of semiconductor exports from the initial list of tariffs.
Breaking: Offshore yuan drops to two-month low as PBOC weakens fixing
The offshore yuan drops to a two-month low as the PBOC weakens its fixing, signaling a potential shift in strategy. The segment discusses the PBOC's tightrope walk between stabilizing the stock market and allowing some depreciation to counter the tariff pressure. The segment also features an interview with Fabiana Fedeli, CIO of equities, multi-asset, and sustainability at M&G Investments, who discusses the yuan's potential depreciation and the impact of the trade war on global markets.
M&G Investments' Fabiana Fedeli on market strategy
Fabiana Fedeli, CIO of equities, multi-asset, and sustainability at M&G Investments, discusses the yuan's potential depreciation and the impact of the trade war on global markets. She believes that the yuan will likely depreciate but in an orderly manner, controlled by Chinese authorities. She also highlights the damaging effects of the trade war on companies, particularly those in the technology sector, and advises investors to focus on specific companies rather than sweeping market bets.
China state funds planning to buy local stocks to support market
The segment discusses China's efforts to support its stock market, including plans by state funds to buy local stocks. The PBOC is also providing lending support to these funds, and policymakers are considering accelerating the implementation of fiscal stimulus. The segment also highlights the importance of the April Politburo meeting, where policymakers will discuss further policy adjustments.
Eurasia Group's Dan Wang on China's response to US tariffs
Dan Wang, China director at Eurasia Group, discusses China's response to US tariffs. He believes that China is unlikely to allow a significant depreciation of the yuan, as it would be detrimental to the country's economic interests. He also highlights the importance of China's relationship with other trading partners and the need to maintain a stable yuan to improve those relations.
Former NY Fed President Dudley: Policymakers unlikely to intervene to stop market meltdown
Bill Dudley, Bloomberg opinion columnist and former New York Fed president, discusses the Fed's response to the trade war. He believes that the Fed is unlikely to intervene to rescue the US economy from the damage caused by tariffs, as it would be difficult to balance its dual mandate objectives of controlling inflation and unemployment. He also highlights the persistence of tariffs, contrasting them with the temporary supply disruptions experienced during the COVID pandemic.
Alert: Indonesian stocks plunge after holiday break
Indonesian stocks plunge after a holiday break, reflecting the impact of the trade war on global markets. The segment discusses the potential for further easing by central banks, including the RBA, which is now expected to cut rates by 50 basis points in May.
Asian stocks rebound after worst day on record
Asian stocks rebound after their worst day on record, but the segment cautions that the rebound could be short-lived. The segment discusses the role of central banks in stabilizing markets and the potential for the Fed to lower interest rates despite its previous resistance.
China vows to defend itself against US tariff threats
China reiterates its commitment to defend itself against US tariff threats, emphasizing that it will not back down from its stance. The segment discusses the different approaches taken by China and other countries in responding to US tariffs, highlighting the escalation of the trade war between the US and China.
US, Japan to hold trade talks
The segment reports that the US and Japan are set to hold trade talks, suggesting a potential for de-escalation in the trade war. The segment also discusses the potential for China to diversify its trade away from the US, including a possible visit by President Xi Jinping to Southeast Asian countries.
Morgan Stanley's Chetan Ahya on trade war impact on Asia
Chetan Ahya, chief Asia economist at Morgan Stanley, discusses the impact of the trade war on Asia. He believes that the growth drag from tariff uncertainties in Asia could be bigger than what was seen in 2018-2019. He also highlights the Trump administration's focus on reducing the US trade deficit with Asian countries, which could lead to a prolonged period of uncertainty.
Trump directs security panel to review US Steel deal
The segment reports that President Trump has directed a security panel to review the potential sale of US Steel to Nippon Steel, a deal that was blocked by the Biden administration. The segment discusses the political nature of the deal and the potential for it to be revived.
Alert: Malaysia's Anwar: ASEAN to send officials to Washington
Anwar Ibrahim, Malaysia's prime minister, announces that ASEAN will send officials to Washington to discuss the trade war. He also emphasizes the need for ASEAN to rely more on itself and boost regional trade.
Indian Commerce Minister Piyush Goyal on tariffs
Piyush Goyal, India's commerce minister, discusses India's response to US tariffs. He emphasizes that India's tariffs are meant to protect the Indian economy from unfair trade practices, particularly from countries that engage in cross-subsidization and dumping. He also discusses the importance of bilateral trade agreements and the need for countries to adhere to fair trade practices.
Samsung 1Q profit beats estimates on new Galaxy smartphones
Samsung's quarterly profit beats expectations, driven by strong sales of its latest Galaxy smartphones and legacy chips. The segment discusses the impact of US export controls on Samsung's Chinese customers and the company's efforts to manage the risks posed by tariffs on its Vietnamese production.
Trending in China: Trump tariffs blasted on social media
The segment discusses the reaction to the trade war on Chinese social media. While some users are calling for Beijing to cede to US demands, others are strongly supportive of the government's stance and are critical of the US's actions. The segment highlights the nationalistic sentiment prevailing among many Chinese users.
