TARIFFS PAUSED FOR 90 DAYS

US President Donald Trump has authorised a 90-day pause in the application of reciprocal tariffs on countries that do not retaliate commercially against this measure. In contrast, he has intensified his trade offensive against China by raising tariffs to 125%, “effective immediately.”

“Market reaction was swift. The US dollar surged, oil prices spiked dramatically, bond yields eased their declines, and US equities soared — particularly among previously hard-hit sectors such as tech, which posted strong gains.”

“By market close, the Nasdaq Composite had climbed over 12%, marking its second-best session in history. The S&P 500 rose by 9.5%, its best single-day performance since October 2008 during the peak of the Global Financial Crisis, while the Dow Jones gained nearly 8%.”

US INFLATION FALLS, RECESSION RISKS EASE

President Trump’s decision to delay most of the sweeping tariffs could help reduce the risk of the US economy entering a period of high inflation and slow growth, according to analysts at BofA.

The odds of the US entering a recession have “dropped significantly.”

Earlier this week, Trump announced he would delay implementing the so-called “reciprocal tariffs” on a range of countries, excluding China. The decision was welcomed in some parts of the financial markets, although a period of heightened volatility persisted even after Trump’s announcement.

US inflation continues to decelerate. According to Thursday’s report from the Bureau of Labour Statistics, the Consumer Price Index (CPI) fell to 2.4% year-on-year in March, down from 2.8% in February — beating market forecasts.

BEWARE THE DEAD CAT BOUNCE

The term ‘dead cat bounce’ refers to false rallies that occur during market corrections. After a sharp decline, some investors believe prices have bottomed out and start buying in anticipation of a rebound. This can trigger a short-lived upswing. In the context of the trade war, market rallies may result from something as minor as a post on X or a single word suggesting mediation — just like what happened with the partial 90-day truce, which has benefited European markets.

FROM CHINA TO INDIA: ALTERNATIVES AMID THE TARIFF WAR

Apple has air-shipped around 1.5 million iPhones from India to the US in recent weeks as part of an aggressive strategy to bypass the impact of the steep US tariffs on Chinese imports.

The shipments come as Apple scales up production in India, seeking to shield itself from the 125% US tariff on Chinese imports — significantly higher than the 26% rate applied to Indian goods.

According to Reuters, Apple aimed for a 20% increase in output at its iPhone facilities by onboarding more workers.

EUROPE: CONCERNS REMAIN

Firstly, the US President’s announcement pertains solely to what he defines as “reciprocal tariffs.”
In other words, specific tariffs on certain goods — including cars, steel, and aluminium — remain in effect.

As many as 720,000 jobs could be directly threatened across Europe in strategic industrial sectors such as metallurgy, steel, aluminium, automotive, and agri-food, many of which were already struggling even before the latest tariffs.

For example, Indian steel giant Tata Steel — a key player in global steel manufacturing — has announced plans to cut 1,600 jobs in the Netherlands due to weak European demand and ongoing trade tensions.

CHINA: SEEKING A DEAL

The Chinese Government has stated that “the door remains open to dialogue” with the United States — provided the talks take place on equal footing and with mutual respect.

However, it warned that if Washington insists on threats and blackmail, China “will fight to the end.”

The US is expected to work in partial cooperation with China to resolve differences through dialogue and consultation, “in a spirit of mutual respect,” peaceful coexistence, and mutually beneficial collaboration.

ARGENTINA: POVERTY DECLINES

Argentina’s National Institute of Statistics and Census reported on 31 March that poverty stood at 38.1% and extreme poverty at 8.2% in the second half of 2024. These represent drops of 15 and nearly 10 percentage points respectively compared to the first half of the year — returning to levels similar to those seen in the second half of 2022.

In December 2023, following Milei’s inauguration, a sharp devaluation pushed monthly inflation to 25.5%. In the first half of 2024, poverty soared to 52.9%.

However, as inflation subsided — now hovering around 2.5% monthly — poverty and extreme poverty followed suit.
As explained by Leopoldo Tornarolli, researcher at the Centre for Distributive, Labour and Social Studies, falling inflation was key to this improvement.

CAPITAL CONTROLS EASED

The Central Bank of Argentina has launched the third phase of its economic plan, introducing currency flexibility and a floating exchange band. Under the new rules, the US dollar in the official foreign exchange market may fluctuate between ARS 1,000 and ARS 1,400, with monthly widening of the band by 1%.

The upcoming Communication A 8226 will lift capital controls for individuals, eliminating the previous USD 200 purchase cap and removing all FX access restrictions tied to pandemic aid, subsidies, and public employment.

IMF DEAL SECURED

The International Monetary Fund’s board approved a new programme for Argentina worth USD 20 billion, following four months of negotiations with President Javier Milei’s administration.

The Central Bank announced that USD 15 billion will be disbursed in 2025, with the first USD 12 billion to be delivered next Tuesday. A further USD 2 billion will follow in June, with an additional USD 1 billion expected before the end of the year.

ARGENTINA INVESTS IN LITHIUM

Using a blockchain-based model, Argentina is advancing the tokenisation of lithium to ensure traceability and compliance with operational and financial commitments. This initiative is focused on the Mogna Salt Flat region in San Juan province. It has been announced that Atómico 3 will be the company responsible for issuing the tokens, which will be handed to the mining company — with each token backed by real lithium extracted from the mine.

CHAINLINK SOARS

The cryptocurrency has performed strongly in the market.
Among the contributing factors is a new integration with payment giant PayPal, which now allows US customers to directly access the LINK token.

Amid a broader bullish cycle, Chainlink has seen a significant increase in activity among major investors.
In the past 24 hours alone, large LINK transactions rose by 178%, totalling USD 166 million — representing roughly 14.5 million tokens moved by whales and institutional players.

XRP ACQUIRES A BROKER

With the USD 3 trillion acquisition of Hidden Road, Ripple becomes the “first crypto firm to own and operate a global, multi-asset prime broker.”

Ripple CEO Brad Garlinghouse emphasised the strategic importance of the move amid evolving US regulations, especially changes at the Securities and Exchange Commission (SEC).

“We’re at a pivotal moment for the next phase of digital asset adoption — the US market is effectively open for the first time, as the old SEC regime’s regulatory burden has come to an end, and the market is maturing to meet the needs of traditional finance.”