Trump Blinks in Trade War: Xi Says China is Unfazed as Markets Retreat Again

Apr 12, 2025

Good morning. Today marks another frenetic week for global markets after the US’ went hot and cold on its sweeping tariff policy.

A dramatic U-turn on tariffs saw shares surging only a day after clocking in record losses and flirting with the bear territory.

But as the optimism starts to fade, investors are left with even more questions as to how the ongoing trade war would play out. But markets, analysts, and investors are all united in concluding that as of now, the only sure thing about the present dynamics is that current uncertainties will continue to linger for longer.

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Today's reading time is 7 minutes. - CJ

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Global markets slipped into the red amid rising tensions between China and the US, while safe-haven assets surged.

The US Blinks in Trade War

In a dramatic turn of events, US President Donald Trump backpedaled on his sweeping tariffs after announcing a 90-day freeze on the controversial policy – less than 24 hours since implementing them. A 10% blanket tariff is now applicable to most countries, which is significantly lower than the original rates announced last week. In Australia, the tariff rate remains at 10%. China was the lone exemption after Trump lamented about Beijing’s retaliation, while the road to a potential negotiation remained patchy.

Coalition Mulls Megafund for Regional Australia

The Liberal-National Coalition is proposing a AU$20 billion Regional Australia Future Fund aimed at eliminating childcare deserts, enhancing healthcare, and upgrading infrastructure in regional areas. Modeled after Labor's housing and manufacturing funds, the fund is expected to generate AU$1 billion annually to finance essential services and infrastructure projects that are beyond the financial reach of local councils.

Labor Outpaces Coalition in Latest YouGov Poll

With less than a month before the federal elections, the Labor party has widened its lead with 52.5% over Coalition’s 47.5% in the two-party preferred vote based on a YouGov survey published on Friday. Prime Minister Anthony Albanese also improved his standing as the preferred prime minister.

Business & Markets

➡️ Wall Street fell along with global markets, while gold shone bright. US benchmark equity indexes retreated on Thursday after a short-lived rally as the growing tensions between China and the US took center stage and overshadowed optimism in the wake of the tariff pause. The S&P 500 tumbled 3.5% and the Dow Jones Industrial Average lost 2.5%. Shares were mixed in Asia on Friday, with Japan’s Nikkei 225 retreating nearly 3%, while Hong Kong’s Hang Seng rose 1.6%. The ASX 200 slipped back into the red with a 0.8% decline at market close. Meanwhile, gold jumped 1% to $3,207 per ounce after hitting new highs in the previous session.

➡️ The Reserve Bank of Australia is seen as delivering more and faster rate cuts in the wake of Trump’s tariffs. Analysts have revised their rate outlook to take into account fears of higher inflation and increased uncertainties brought by the rapidly evolving trade developments. Deutsche Bank now expects the bank to deliver a double rate cut in May to give households some breathing space amid fears of higher prices.

➡️ Prime Minister Anthony Albanese reiterated plans to bring the Port of Darwin back to Australia. The government’s reaffirmation comes as it tries to appeal to voters in the lead up to election day. Albanese said he is willing to use interventionist powers to seize control of the asset from China-owned Landbridge Group.

Politics & World Affairs

➡️ Australia declines China’s offer to unite against the trade war. In an opinion piece on April 10, Chinese ambassador to Australia Xiao Qian said a coordinated move by US trade allies is "the only way" to deter the “hegemonic and bullying behavior of the US.” But Prime Minister Anthony Albanese was quick to respond by saying Australia would only "speak for ourselves.”

➡️ A devastating roof collapse at the Jet Set nightclub in Santo Domingo, Dominican Republic, has killed over 220 people and injured 155. The tragedy occurred this week during a concert, claiming the lives of prominent figures, including former MLB players Octavio Dotel, Tony Blanco, and merengue singer Rubby Pérez. President Luis Abinader has expressed condolences and ensured comprehensive assistance. Authorities are investigating the cause of the collapse, with a history of fire damage at the nightclub raising concerns.

➡️ In his first public comment since Trump’s punitive tariffs took effect, Chinese President Xi Jinping said his country is “not afraid” even after being singled out by Washington. "There are no winners in a trade war, and going against the world will only lead to self-isolation," Xi told Spanish Prime Minister Pedro Sanchez on Friday as aired by state broadcaster CCTV.

AI & Technology

➡️ Apple reportedly airlifted 600 tonnes of iPhones to circumvent US tariffs. In an apparent race against time, the tech giant chartered cargo flights to import an equivalent to 1.5 million iPhones to the US from India after ramping up production there, Reuters reported on April 10. The price of the handset could rise as the components used to make them face steeper tariffs, according to analysts.

➡️ Canva makes its biggest product launch since debut. The online design and visual communication platform unveiled Visual Suite 2.0, which it says aims to “bridge the gap between creativity and productivity” through AI-powered tools. Among its head-turner features is the AI-powered spreadsheet, which can scan data sets for better insights.

➡️ Nintendo decided to delay the release of Switch 2. The Japanese company had set June 5 as the launch date for the console but decided to postpone amid regulatory hurdles within the gaming industry, Nikkei Asia reported on April 10. The device was supposed to be launched in Japan, Europe, and other regions, but mainland China was not included in the initial roll-out.

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