—— China to Charge US Imported Goods 84% Tariff; EU Retaliates with 25% Tariff on US Goods; Price for Secondhand Tesla Drop Sharply; Nuro Raises $106 Million After lower Valuation
1. China to Charge US Imported Goods 84% Tariff
Broadcom Inc., a major player in the semiconductor industry and supplier to companies like Apple Inc., has announced a substantial share buyback program. The company plans to repurchase up to $10 billion of its shares, a move reflective of its confidence in the ongoing strength and potential of the chip sector.
This decision was revealed in a statement on Monday, and the board has authorized the repurchase to continue through December 31. Following the announcement, Broadcom’s shares saw an approximate 3% increase in late trading.
This strategic financial move comes at a time when Broadcom’s stock had experienced a significant decline, falling 34% this year through the close of regular trading in New York. This downturn was part of a wider tech rout, largely driven by concerns over tariffs impacting the industry.
Broadcom’s CEO, Hock Tan, emphasized that the buyback “reflects the board’s confidence in the strength of Broadcom’s diversified semiconductor and infrastructure software product franchises.” He also highlighted the company’s strategic position to aid large cloud-computing firms in embracing generative artificial intelligence technologies, marking a key area of growth and innovation for Broadcom.
This initiative underscores Broadcom’s optimistic outlook on its future and its commitment to delivering value to its shareholders despite the broader challenges facing the tech industry.
Source: Bloomberg – China Raises Tariffs on US Goods to 84% as Trade Rift Worsens
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2. EU Retaliates with 25% Tariff on US Goods
The European Union has escalated its response to the United States’ imposition of tariffs on steel and aluminum by approving retaliatory tariffs targeting approximately €21 billion ($23.2 billion) worth of US goods. This decision came after a majority of the EU’s 27 member states voted in favor of the measures on Wednesday, with some of the penalties set to take effect in mid-April.
The EU’s retaliatory tariffs are strategically aimed at politically sensitive regions in the US, affecting products such as soybeans from Louisiana, which is the home state of House Speaker Mike Johnson, as well as other significant exports like diamonds, agricultural products, poultry, and motorcycles. These targeted measures are a clear indication that the EU is positioning its response to hit influential political figures and sectors in the US.
The European Commission has stated that these countermeasures are intended as a lever in negotiations and can be suspended “should the US agree to a fair and balanced negotiated outcome.” This statement suggests that the EU is still open to dialogue and is using these tariffs as a bargaining chip to bring the US back to the negotiating table.
This development is part of a broader intensifying trade conflict between the US and the EU. In addition to the initial tariffs on steel and aluminum, the US has also imposed a universal 20% tariff on nearly all European exports, along with a separate 25% duty on cars and some auto parts. President Donald Trump has also indicated plans to announce additional tariffs on lumber, semiconductor chips, and pharmaceutical products, which collectively target around €380 billion of EU goods.
The growing scale of this transatlantic trade war poses significant economic risks, not only affecting the involved parties but also potentially impacting global trade networks and economic stability.
Source: Bloomberg – EU Adopts Tariffs on €21 Billion of US Goods in Metals Fight
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3. Price for Secondhand Tesla Drop Sharply
Amazon.com Inc. has reportedly taken steps to reduce its reliance on products manufactured in China and other Asian countries, a move likely influenced by the recent tariff measures introduced by President Donald Trump. According to sources and a document reviewed by Bloomberg, Amazon has canceled orders for a range of products including beach chairs, scooters, and air conditioners from various vendors.
These cancellations occurred shortly after President Trump’s announcement on April 2, which outlined plans to implement tariffs on goods from over 180 countries and territories, including major manufacturing hubs like China, Vietnam, and Thailand. The sudden nature of these order cancellations, without prior warning, has led vendors to believe that Amazon’s decision is a direct response to the new tariff policies.
Amazon has not provided comments on these specific cancellations. However, the company has previously acknowledged international trade disputes as a significant risk factor in its operations. In its annual report released in February, Amazon noted the critical role that China-based suppliers play in providing both components and finished goods, indicating how changes in trade policies can significantly impact its supply chain and operational decisions.
This development highlights the broader implications of the ongoing trade tensions, which are prompting major corporations like Amazon to reevaluate and potentially alter their global supply strategies to mitigate the impacts of increased tariffs and the associated costs.
Source: Bloomberg – Amazon Cancels Some Inventory Orders From China After Tariffs
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4. Nuro Raises $106 Million After lower Valuation
DFC Intelligence, a research firm specializing in gaming and digital media, has revised its global sales forecast for Nintendo Co.’s highly anticipated Switch 2 video game console. The new projection anticipates sales of 15 million units in 2025, a decrease from the previously estimated 17 million units. This adjustment is largely due to the economic uncertainties triggered by new tariffs imposed by US President Donald Trump.
Despite the downward revision, the Switch 2 is still expected to be the fastest-selling game console in history. However, the recent tariff announcements have cast a shadow over various industries, including gaming. The specific tariffs in question include a substantial 46% duty on goods imported from Vietnam, which is particularly impactful for Nintendo as the majority of Switch consoles are manufactured there.
This development has already had tangible effects on Nintendo’s operations, prompting the company to announce an indefinite delay in taking preorders for the Switch 2 in the United States.
DFC Intelligence highlights a significant concern that should these tariffs lead to considerable price increases for the Switch 2, many potential buyers might postpone their purchases, waiting for prices to stabilize or decrease. This scenario underscores the broader implications of trade policies on global supply chains and consumer purchasing decisions.
Source: Bloomberg – Self-Driving Startup Nuro Raises $106 Million at Lower Valuation
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5. Trump Delays Reciprocal Tariffs on Most Countries
DeepSeek, a Chinese startup known for its impactful low-cost reasoning model launched in January, is advancing its AI technology through a collaboration with Tsinghua University. Together, they are focusing on enhancing the efficiency of AI training processes to reduce operational costs significantly.
Their joint research has produced a novel approach within the field of reinforcement learning, aimed at optimizing AI models to better align with human preferences. This method enhances learning by rewarding AI systems for delivering more accurate and comprehensible responses. Although reinforcement learning has effectively accelerated AI tasks in specific domains, applying it broadly has been a challenge. DeepSeek and Tsinghua University are addressing this through what they term “self-principled critique tuning.”
The new strategy has shown promising results, outperforming existing methods and models across various benchmarks while also requiring fewer computing resources. This breakthrough has led to the development of what DeepSeek calls DeepSeek-GRM, or “generalist reward modeling.” These models not only improve performance but also do so with greater efficiency.
DeepSeek has announced plans to release these models on an open-source basis, which will allow other developers and researchers to access and build upon this innovative technology. This move places DeepSeek alongside other major players like Alibaba Group Holding Ltd. and OpenAI, who are similarly pushing the boundaries of AI by improving real-time reasoning and self-refining capabilities of AI systems.
Source: Bloomberg – Trump Pauses Higher Tariffs on Most Nations, Raises China Duties
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6. RMB Hits Record Low After PBOC Loosens Grip
The offshore yuan reached its lowest level ever recorded, amid signs that China is loosening its strict control over the currency. This shift comes as tensions escalate in the ongoing trade war with the United States.
In recent trading sessions in New York, the offshore yuan dropped by 0.5% to a record low of 7.3848 per dollar. Earlier the same day, the People’s Bank of China (PBOC) set the yuan’s daily reference rate at 7.2038 per dollar, marking the weakest level since September 2023. This move breached the 7.20 threshold, which investors often view as an unofficial indicator of China’s currency policy intentions. Similarly, the onshore yuan also fell to its weakest since September 2023.
Analysts, including Aroop Chatterjee from Wells Fargo in New York, believe that this depreciation is likely to continue and even accelerate. The PBOC’s actions suggest a shift towards allowing more flexibility in how the yuan’s value is determined. Chatterjee predicts that this managed depreciation could see the offshore yuan weakening to 7.50 per dollar or even further.
Such a trend indicates a strategic adjustment in China’s approach to managing its currency amidst heightened economic pressures from international conflicts and trade disagreements.
Source: Bloomberg – China’s Offshore Yuan Hits Record Low After PBOC Eases Grip
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7. US Stocks Tank Amid Tariffs
U.S. stocks faced a downturn on Friday afternoon, closing in negative territory as the automotive and Chinese sectors led the fall. This decline was primarily driven by an announcement from the White House confirming President Donald Trump’s intention to proceed with significant tariffs on imports from Mexico, Canada, and China starting Saturday.
Specifically, Trump’s administration plans to impose a 25% tariff on goods from Mexico and Canada, and a 10% tariff on Chinese imports. This news negatively impacted investor sentiment, particularly affecting a UBS Group AG basket of stocks deemed at risk from these tariffs, which plunged by 3.7%. Additionally, despite an initial gain, the S&P 500 Index ended the day down by 0.5%.
The financial markets reacted swiftly, with the Bloomberg Dollar Spot Index reaching a session high, indicating a flight to safety among investors. Meanwhile, the Cboe Volatility Index (VIX), often referred to as the “fear gauge,” increased to just over 16, reflecting growing uncertainty and risk aversion among traders.
The ongoing threat of tariffs has been a significant concern for U.S. equity markets since Trump’s election victory in November. Analysts and strategists have cautioned that such high levies could spark inflationary pressures, potentially leading to broader economic disruptions and negatively impacting stock valuations.
Given this backdrop, sectors such as automotive, technology, and manufacturing, which have substantial exposure to international trade, are particularly vulnerable to the effects of prolonged trade wars and the imposition of tariffs.
Source: Bloomberg – Autos, Chipmakers, China Stocks Brace for Impact as Tariffs Loom
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