Trump issues latest hint!

U.S. President Donald Trump stated on Thursday local time that the tit-for-tat tariff hikes between the U.S. and China may soon come to an end. While discussing tariffs at the White House, Trump said, "I don't want tariffs to keep going up because at a certain point, people just won't buy."

This may have influenced international oil prices, which surged nearly 3% yesterday, and copper also rebounded significantly. This morning, the Asia-Pacific stock markets reacted positively, with Japan, South Korea, and Australia all seeing good gains. Meanwhile, traders have shifted their bets for the first time in two weeks, anticipating a slight rise in the renminbi over the next month.

Trump's Implications

According to Reuters, Trump stated on Thursday that the tit-for-tat tariff hikes between the U.S. and China may soon come to an end. While discussing tariffs at the White House, he told reporters, "I don't want tariffs to keep going up because at a certain point, people just won't buy." "So, I might not want to set prices higher, or even want to reach that level. I might want to set prices lower because you want people to buy, but at a certain price, people just won't buy."

Trump indicated that since the imposition of tariffs, the U.S. and China have maintained contact and expressed optimism about reaching an agreement.

At the same time, Trump also shared his views on the agreement with the European Union. According to CCTV News, on April 17 local time, Italian Prime Minister Meloni arrived at the White House for a meeting with Trump. Officials from the Trump administration stated that the two sides are expected to discuss a range of topics during the meeting, including trade, immigration, and ending the conflict in Ukraine. Additionally, it is expected that Meloni will pressure Trump on trade and tariff issues.

Officials stated that Trump "places great importance on this matter," and the White House "is ready to reach an agreement." When a reporter asked Trump how confident he was about reaching a trade agreement with Italy, Trump responded with his lips, "Very confident." On that day, Trump stated that he is "100%" confident that a trade agreement with the EU will be reached before the 90-day tariff suspension period ends.

As the U.S. continues negotiations with various parties regarding tariffs, Trump stated that the U.S. government "is not in a hurry" to announce agreements with specific countries but will announce relevant news "at some point."

IMF's Warning

On the eve of the spring meetings of the International Monetary Fund (IMF) and the World Bank, IMF President Kristalina Georgieva delivered a speech on Thursday (April 17), warning about the tariff policies of the Trump administration. She stated that the IMF will release the "World Economic Outlook" next Tuesday (April 22), and the "out-of-chart" global trade uncertainty will lead the IMF to significantly cut its global economic growth forecast and raise inflation indices for some countries.

Kristalina Georgieva stated that it is too early to assert that Trump's trade policies will trigger global economic growth. In the "World Economic Outlook" released by the IMF in mid-January, the IMF projected that global economic growth would reach 3.3% by 2025, roughly the same as 2024 (3.2%), with the U.S. economy now expected to reach 2.7%. However, three months into Trump's presidency, he has thrown the U.S. and global economy into chaos. The Peterson Institute for International Economics predicted earlier this week that the U.S. economy will only grow by 0.1% this year, far below last year's 2.5%. Kristalina Georgieva stated that when considering all recent tariff increases, pauses, escalations, and exemptions together, the effective tariff rate in the U.S. has surged to its highest level in generations.

She warned that the ongoing uncertainty in trade policy could lead to more financial market stress events, such as a significant drop in U.S. stocks. She said, "While uncertainty has increased, the dollar has depreciated, and U.S. Treasury bonds are sincerely 'smiling'—this is not the kind of smile people want to see. These expressions should be viewed as warning signals; if the financial environment worsens, everyone will suffer."

Kristalina Georgieva is the latest heavyweight to express concerns about Trump's trade policy this week. World Bank President David Malpass and Federal Reserve Chairman Jerome Powell have both warned of the stubbornness that Trump may cause. The European Central Bank (ECB) also lowered interest rates on Thursday and warned that the escalation of trade tensions has worsened the economic growth outlook.

Market Reaction

Last night, the U.S. stock market reacted rather calmly to Trump's new statements. In this process, one thing is worth noting: although U.S. stocks and bonds have been weak recently, the data released last night indicates that the Federal Reserve's trend of balance sheet reduction seems unchanged.

In today's early trading, Asia-Pacific stock indices performed well, showing that the market's concerns about tariffs have eased. Meanwhile, commodity futures also performed prominently. International oil prices, as well as copper and tin, have rebounded significantly.

In the foreign exchange market, the yen continued to rise, while the renminbi also saw a rebound as expected. Reports indicate that traders have shifted to betting on a slight increase in the renminbi over the next month for the first time in two weeks. The one-month dollar/offshore renminbi risk reversal indicator entered negative territory for the first time since April 2, at -0.05%, indicating that bearish options are prevailing. This indicator briefly reached 1.18 on April 9. Currently, traders are paying more for bearish options betting on a decline in dollar/offshore renminbi than for bullish options, which is the opposite of the situation in recent weeks when the premium for bullish options relative to bearish options continued to expand.

Risk Warning and Disclaimer

The market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk