Trump Admin adds to tariff exemption list, as nation-state negotiations continue

Asia Market Update: Lower Vol to start week; CN export industry under severe stress even as Mar exports saw another blowout; Trump Admin adds to tariff exemption list, as nation-state negotiations continue.

General trend

- Markets welcomed much lower volatility to start the week, with a rare all-green day in the main Asian indices and USD/JPY having an inside day compared to Friday’s range. US 10-yr yields also -3bps and VIX FUTs -4% to 27%. Hang Seng outperformed +2.1%.

- New guidance late Friday from the Trump Admin temporarily exempted smartphones, laptops, memory chips, as well as machines used to create semiconductors, flat screen TVs, tablets and desktop computers from the 125% China tariff and the 10% baseline tariff on countries around the world. On Sunday Pres Trump said nobody is getting ‘off the hook’ for unfair trade and Commerce Sec Lutnick provided some clarity by confirming exempted electronic products will face separate tariffs along with semiconductors within the next 2 months.

- China's export industry, according to anecdotal evidence, is under severe stress amid canceled orders and rerouted shipments; Container vessels that did not ship out prior to Pres Trump's 104% tariff imposition earlier last week remain at dockyards. Reports of some China exporters surrendering shipments mid-voyage to reduce losses. China-Europe and China-Asia freight rates have increased amid a deluge of inquiries from clients seeking to redirect cargo to alternative markets. This is adding to already widespread fears in these markets of China product dumping that may further depress the prospects of local manufacturers in these regions. Whether this assists the Trump Admin in making bilateral deals with countries around the world as they attempt to avoid being overrun by product oversupply from China remains to be seen.

- An increasing number of factories in China reportedly face liquidity crunches, with staff being laid off or else put 'on holiday' and some said to be selling equipment in order to survive order cancellations.

- Also reported late Friday the Trump admin is reportedly prioritizing trading partners that are strategic to China; Including Japan, South Korea, India and Vietnam.

- Following up on similar news out of Thailand end of last week, today Vietnam’s Trade Ministry told manufacturers and exporters to tighten control of origin of goods, and materials and diversify sources of materials, avoiding reliance on a single source.

- And in a sign companies may be seeking to take advantage of ongoing US tariffs against China beyond the short term, Samsung Electronics reported to expand home appliance line up in the US and open a new production line in Tennessee.

- Japan LDP policy chief Onodera said Japan must strengthen the Yen, reiterated Japan should not ‘intentionally’ sell its US Treasury holdings; Comes after US Pres Trump reportedly expressed strong interest in Japan's FX policy in phone talks with Japan PM Ishiba.

- China exports rocketed up over 12% in March while imports extended their decline, producing another giant monthly surplus of $102.7B. For Q1, China steel exports at highest level since 2016.

- In a sign of loosened lending, China aggregate financing and new bank loans for March came in higher than even the significantly increased estimates.

- Singapore MAS kept easing for the second consecutive policy meeting, reducing the S$NEER policy band by 50bp to 0.5% p.a. but no change to the width of the band and the level at which it is centered. Decision came as Singapore Q1 advance GDP fell more than expected, on top of warnings last week by the Singapore PM that the Trade Ministry is likely to revise 2025 growth forecast downwards. SG$ +0.2% to five-month high vs USD.

- JP Morgan, Wells Fargo, Morgan Stanley all beat earnings estimates on Friday, but all expressed nervousness in their outlooks. Also Friday US Mar PPI showed lower inflation than expected, but countered somewhat by Michigan Consumer Sentiment showing consumers expecting higher inflation going forward.

- US equity FUTs +1.2% to +1.7% during Asian trading.

Looking ahead (Asian-weighted news, using Asian time zone)

- Tue Apr 14th AU RBA Minutes, IN Mar CPI (Tue eve DE Apr ZEW Sentiment).

- Wed 15th NZ Mar Trade Balance, CN Mar ‘Data Dump’ (Wed eve US Mar Retail Sales, CA BOC Rate Decision).

- Thu 16th NZ Q1 CPI, JP Mar Trade Balance, KR Rate Decision, AU Jobs, (Thu eve ECB Rate Decision).

- Fri 17th JP Mar National CPI.

- Sat 18th CN Mar FDI.

Holidays in Asia this week

- Mon Apr 14th India, Thailand.

- The Apr 15th Thailand.

- Thu Apr 17th Philippines.

- Fri Apr 18th Australia, Hong Kong, India, Indonesia, New Zealand, Philippines, Singapore.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3% at 7,668.

- New Zealand Mar Total Card Spending M/M: -1.5% v -0.1% prior.

- New Zealand Feb Net Migration: 5.4K v 2.4K prior.

- New Zealand Mar Performance Services Index (PSI): 49.1 v 49.1 prior (second straight contraction).

China/Hong Kong

- Hang Seng opens +2.1% at 21,363; Shanghai Composite opens +0.4% at 3,251.

- China Q1 Trade Balance (CNY): +1.96T.

- CHINA MAR TRADE BALANCE: $102.6B V $74.4BE.

- CHINA MAR TRADE BALANCE (CNY-DENOMINATED): 736.7B V 228.2B PRIOR.

- CHINA MAR M2 MONEY SUPPLY Y/Y: 7.0% V 7.1%E (UPDATE).

- CHINA MAR AGGREGATE FINANCING (CNY): 15.18T V 14.251TE (UPDATE).

- China Mar New Yuan Loans (CNY) YTD: 9.78T v 9.14Te; Mar New Loans: 3.64T v 3.0Te - update.

- China may cut rates, RRR if trade war hurts economy - Financial News, citing former central bank adviser Yu Yongding.

- China to roll out more monetary easing steps - Shanghai Securities News.

- China Foreign Ministry: President Xi reiterated must firmly safeguard the multilateral trading system - comments on Vietnam.

- TTN Research Alert: Sunday update on US-China trade war; 1) Pres Trump exempts smartphones, laptops, memory chips and some other electronics from the 125% tariff imposed on China and the 10% baseline tariff on rest of world [However, 20% Fentanyl tariffs still enforced against China]; 2) China's export industry under severe stress amid canceled orders and rerouted shipments.

- CK Hutchison: Reportedly Italian tycoon's firm leads deal for CK Hutchison's 43 ports; Gianluigi Aponte’s family-run business emerging as the lead investor - press.

- China stock exchanges reportedly restricting selling – press [weekend update].

- (US) Trump admin is reportedly prioritizing trading partners that are strategic to China; US is in talks with Japan, South Korea, India and Vietnam [weekend update].

- USTR Greer: China reaction to US tariff increases 'unfortunate'; Will be speaking Taiwan counterpart today and with Israel soon [weekend update].

- CHINA RAISES TARIFF ON US GOODS TO 125% (FROM 84%); EFFECTIVE APR 12TH; WILL IGNORE FURTHER TARIFFS IF IMPOSED [late Friday update].

- US officials warned China against retaliating in private talks; US told Chinese counterparts to request a phone call between US Pres Trump and China Pres Xi - CNN reporter X post [weekend update].

- (US) White House Press Sec Leavitt: Pres Trump intends to use tariffs to pay down debt; More than 15 trade offers already on the table [weekend update].

- Reportedly China considers allowing Western firms to act as market makers for its ETF sector – press [weekend update].

- China PBOC sets Yuan reference rate: 7.2110 v 7.2087 prior (weakest since Sept 11th, 2023).

- China PBOC Open Market Operation (OMO): Injects CNY43B in 7-day reverse repos; Net drains CNY51B v injects CNY29B prior.

Japan

- Nikkei 225 opens +1.3% at 34,006.

- Japan Feb Final Industrial Production M/M: 2.3% v 2.5% prelim; Y/Y: 0.1% v 0.3% prelim.

- Japan Economic Revitalization Min Akazawa: Tariffs already in place are hurting Japanese firms - financial press.

- Japan BOJ Gov Ueda: Reiterates uncertainty has risen due to US tariff measures; US tariffs to put downward pressure on the economy - parliamentary testimony.

- Japan PM Ishiba: Security issues also need to be discussed in US tariff talks; Can't just make continuous compromises in US talks - financial press.

- Japan LDP policy chief Onodera said Japan must strengthen the yen, reiterates Japan should not ‘intentionally’ sell its US Treasury holdings – financial press [update].

- US Pres Trump reportedly expressed strong interest in Japan's FX policy in phone talks with Japan PM Ishiba – press [weekend update].

- Follow up: Japan PM Ishiba reportedly to order compilation of extra budget next week [Note: Contradicts earlier reports during the week] – press [weekend update].

- Japan Econ Min Akazawa: Will visit US for trade talks on Thurs, Apr 17th [weekend update].

Korea

- Kospi opens +0.9% at 2,454

- Samsung Electronics to expand home appliance line up in the US; seeks to add a new production line to plant in Tennessee - Korean press.

- South Korea Acting President Han calls on parliament to pass Chip-related bill; government will submit extra budget proposal 'soon'.

Other Asia

- Philippine delegation to negotiate tariffs with US in Washington DC during May - financial press.

- Indonesia officials to meet US Treasury and Commerce Secretaries on Apr 16-23rd - press.

- Vietnam Trade Ministry: Tells manufacturers and exporters to tighten control of origin of goods, materials; To diversity sources of materials, avoid reliance on a single source - financial press.

- Taiwan Premier expected to discuss RRR cut with the central bank – Press [update].

- SINGAPORE Q1 ADVANCE GDP Q/Q: -0.8% v -0.4%E V ; Y/Y: 3.8% V 4.5%E.

- SINGAPORE CENTRAL BANK (MAS) QUARTERLY MONETARY POLICY STATEMENT: MAS WILL CONTINUE WITH THE POLICY OF A MODEST AND GRADUAL APPRECIATION OF THE S$NEER POLICY BAND (CONTINUES EASING).

- Thailand Fin Min Pichai: To cut tariffs on US corn; To import more US natural gas [weekend update].

- Philippines said to be expecting $500M annual defense funding from US through 2029 – press [weekend update].

North America

- (US) President Trump: Should not be any 'ambiguity' in markets; we have a financial system that is very 'respected'.

- US Pres Trump issues directive to expand military control over thin strip of federal lands near US and Mexico border across three states; The "Roosevelt Reservation" runs along US-Mexico border encompassing California, Arizona and New Mexico (update).

- (US) President Trump reportedly planning to sign Exec Order to stockpile deep sea critical minerals as a counter to China influence - FT (update).

- (US) Commerce Sec Lutnick confirms exempted electronic products will face separate tariffs along with semiconductors within the next 2 months – [weekend update].

- (US) President Trump: Nobody is getting ‘off the hook’ for unfair trade; there was no 'tariff exception' announced on Fri. [weekend update].

- (US) President Trump issues Clarification of Exceptions Under Executive Order 14257 of April 2, 2025, as Amended: items excluded from reciprocal tariffs include smartphones and other electronics [weekend update].

- (US) Pres Trump: The bond market is going good; Bond market had a little moment but I solved that problem very quickly; 10% tariff is a floor or pretty close [weekend update].

- (US) Trump admin is reportedly prioritizing trading partners that are strategic to China; US is in talks with Japan, South Korea, India and Vietnam [weekend update].

- HHS Secretary Robert F. Kennedy, Jr. charged FDA employees with the responsibility of responding to and ending the chronic health care crisis plaguing our nation’s children; Addresses Home Health Care, 3-D printing and Additive Manufacturing, and cardiovascular device performance simulation [weekend update].

- (G20) Trump: How could we be expected to go to South Africa for the very important G20 Meeting when Land Confiscation and Genocide is the primary topic of conversation? - Truth Social.

- *(US) APR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 50.8 V 53.5E [weekend update].

- *(US) MAR PPI FINAL DEMAND M/M: -0.4% V 0.2%E; Y/Y: 2.7% V 3.3%E [weekend update].

- (US) Fed's Collins (voter): Fed has tools to address concerns about market functioning or liquidity should they arise - FT interview [weekend update].

- (US) Fed's Williams (voter): See unemployment reaching 4.5-5.0% over course of next year; Expects tariffs to drive inflation in 2025 to 3.5-4.0%; 2025 GDP growth to slow to 'somewhat below' 1% - speech text [weekend update].

- (US) Fed's Musalem (voter): Distinct possibility that inflation rises even as labor market softens; Uncertainty is high and Fed policy is well positioned - speech text [weekend update].

- (US) Fed's Collins (voter): Tariffs will push up inflation pressures; Expects inflation 'well over' 3% this year; Markets continue to function well; Won't rule out an economic downturn - press interview [weekend update].

Europe

- (UK) More UK startups said to be moving headquarters to US to tap into deeper capital as UK funding falls to post-pandemic lows - UK press.

- (UK) UK government suspends import tariffs on 89 products, announces £20B increase in loan facility for exporters - update.

- (UK) Apr Rightmove House Prices M/M: 1.4% v 1.1% prior; Y/Y: 1.3% v 1.0% prior.

- (UK) Follow up: UK govt takes control of British Steel - UK press [weekend update].

- (EU) Germany said to caution EU leadership against taxing US Big Tech should tariff negotiations fail – FT [weekend update].

- (EU) ECB Chief Lagarde: ECB is ready to use our instruments, if needed; Do not target any FX rate [weekend update].

- (FR) France PM Bayrou: Regarding tariff situation, naive to think we can simply replace American products with Chinese products [weekend update].

- (DE) Germany Fin Min Kukies: If there is no US deal, EU will set countermeasures; Official trade accords would strengthen Euro role [weekend update].

Levels as of 00:20 ET

- Nikkei 225 +1.8%, ASX 200 +1.3%, Hang Seng +2.1%; Shanghai Composite +0.7%; Kospi +1.0%.

- Equity S&P500 Futures +1.2%; Nasdaq100 +1.7%; DAX +2.3%; FTSE100 +0.4%.

- EUR 113.18-1.1409; JPY 142.25-144.07; AUD 0.62.79-0.6315; NZD 0.5819-0.5860.

- Gold -0.2% at $3,239/oz; Crude Oil -0.2% $61.41/bbl; Copper flat at $4.5240/lb.