Beijing, Stocks, Tariffs After the Overnight Swings

Caveat: This is based on early mainstream media reports. There will be better news.

Global stocks see-sawed in volatile trade Friday while the dollar sank, as investors jostled to square their books after a brutal week marked by all-out trade war and a dramatic loss of confidence in U.S. assets as anchors of market stability.

The dollar slid to its lowest in 10 years against the Swiss franc and a six-month low against the yen as investors sought other safe-haven assets. The euro surged 1.7% to $1.13855, a level last seen in February 2022, and gold, seen as a safe asset during times of crisis, hit another record high of $3200 an ounce.

An overnight selloff in U.S. Treasuries abated but left the 10-year note yield at 4.4%, still up about 45 basis points in the week, its biggest increase since 2001, LSEG data showed. Bond yields go up when prices go down.

Some of the selloff is by foreigners hoping to manipulate the US.

U.S. Treasury Secretary Scott Bessent told a cabinet meeting on Thursday that more than 75 countries wanted to start trade negotiations. Trump himself expressed hope of a deal with China, the world’s No. 2 economy.

Donald Trump Jr. thinks his father might revoke all Chinese student visas next.

Beijing

Beijing will no longer match any further hikes in US tariffs. It vows to counterattack if the US infringes on its interests. China called the administration’s actions a “joke,” saying it no longer considers them worth matching.

Beijing will raise tariffs on all US goods from 84% to 125% starting April 12, the Ministry of Finance said on Friday. This comes after the White House clarified that levies on Chinese goods rose to 145% this year.

“Given that American goods are no longer marketable in China under the current tariff rates, if the US further raises tariffs on Chinese exports, China will disregard such measures,” according to the statement.

Trade between China and the United States seems to have halted. Now, the fear is that it will spill over into other areas.

Trump said he’s waiting for a call from Beijing. They said they’re open to negotiations but won’t be bullied into talking.

Chinese Foreign Ministry Office in Hong Kong: “We must solemnly tell the US that a tariff-wielding barbarian who attempts to force countries to call and beg for mercy can never expect that call from China.” The call is not coming. It is important to China to save face.

In a separate statement Friday, the commerce ministry said Washington’s repeated use of excessively high tariffs has become little more than a numbers game dash economically meaningless and revealing its use of tariffs as a tool for bullying and coercion. “It’s  become a joke,” the ministry said.

China also warned that it will “resolutely counterattack” and “fight to the end” if the US substantially infringes on its rights and interests. It said America should take full responsibility for the damage caused by the tariffs.

So says the country that wittingly or unwittingly sent COVID-19 around the world, killing millions of people. The country that spies,  steals our intellectual property, infiltrates our schools, puts police stations in our country to bully Chinese people living here, buys farms near our military installations, and slowly but surely is controlling the world.

S&P 500 futures and European stocks fell upon this announcement. The US and China could fully decouple. Bloomberg economics says China will act fast, stimulating growth and advancing reforms to increase resilience to the trade shock. Professor Joseph Mahoney at Shanghai’s East China Normal University said, “It means this phase of tariff aggression has reached a dead end.” He works for the Chinese.

She told visiting Spanish Prime Minister Pedro Sanchez, “One that goes against the world risks being isolated themselves.”

Updated to include Bonchie’s comment.

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