14.04.25 - Celebrating pause to consumer tech tariffs

The latest changes in US tariffs were announced Sunday evening in a somewhat chaotic manner. After certain number of statements it was then clear that the US has decided to temporarily suspend tariffs on electronic goods such as smartphones, computers, and semiconductors. It is a temporary exempt from the reciprocal tariffs, including the baseline 10% rate on all countries. This exemption applies to the baseline 10% reciprocal tariff imposed on all countries — with the notable exception of China. Goods from China in these categories will continue to face a 20% tariff. President Donald Trump stated that these goods will soon be placed in a separate “tariff bucket,” with further details expected shortly.

US, weak economic signals:
US consumer sentiment in April dropped further, hitting its lowest level since June 2022 and marking the second-lowest reading in the survey’s history, which dates back to 1952. At the same time, inflation expectations surged to 6.7%, a level not seen since November 1981.

China’s Export Surge:
In China, economic indicators were also mixed. Exports jumped 12.4% year-over-year in March, providing a timely boost to the economy ahead of the anticipated tariff hikes. However, imports declined by 4.3% year-over-year during the same period.

Markets: Global stock markets extended their recovery, regaining more of the recent lossesUS dollar continued to decline, gold hold more steady above USD 3’200, interest rates moved lower.

My view: The latest tariff news provided a boost to equities, prompting investors to increase exposure after the recent slump. According to analyses, private and retail investors were the once heavily buying. However, markets appear to be overlooking the fact that the tariff relief is only a temporary pause, similar to the reciprocal tariff measures. New tariffs, including on pharmaceuticals, could be introduced at any time.

Given these unresolved uncertainties, I am not adding significant exposure at this stage. I expect markets may give back some of the recent gains as clarity remains limited and fears of a recession could get more room.

Become a member to access more valuable market updates like this.