China vows to 'fight to the end' after Trump threatens 50% more tariffs | East Asia Tonight (Apr 8)

Key Concepts

US-China Trade War: Tariffs, retaliation, negotiations, economic impact, currency devaluation
Singapore's Response to Tariffs: Strengthening regional trade, domestic support measures
South Korea's Presidential Election: Triggered by ousting of former leader
NATO's Indo-Pacific Defense Cooperation: Focus on China's military expansion
Panama Canal: US-China tensions, BlackRock consortium deal, impact on citizens
Market Volatility: Investor sentiment, central bank intervention, retail investor strategy
ASEAN Economic Integration: Strengthening intra-ASEAN trade
Myanmar Earthquake Relief Efforts: International aid, Singapore's rescue operation

US-China Trade War Escalation

Trump's Tariff Threat: President Trump threatened an additional 50% tariff on Chinese goods in response to China's retaliatory tariffs. This would bring the total US tariffs on Chinese goods to 104%.
China's Response: China vowed to "fight to the end" and take "strong and resolute measures" if the US insists on a tariff war. The Ministry of Commerce described the escalation as a "mistake on top of a mistake" and accused the US of "unilateral bullying."
Potential Retaliation Measures:
- Matching US tariffs by adding 50% tariffs on US goods, potentially leading to a bilateral trade embargo.
- Stopping all agricultural imports from the US, targeting Trump's supporter base.
- Expanding export controls into more critical metals and minerals.
Economic Impact on China: China is preparing for "very strong headwinds" and coordinating its policy response to support its domestic economy.
China's Stance on Negotiations: China has been seeking engagement with the US, but the US response has been "very confusing" and "not probably very serious about that." Negotiations are unlikely to happen in the short term.
Currency Devaluation: The Chinese Yuan fell to its weakest level since 2023 at 7.33 after the central bank slightly loosened its grip on the currency. Analysts suggest this is an attempt to counteract the blow to exports from the intensifying global trade war.
Capital Market Intervention: China's national team has intervened in the capital markets to boost domestic sentiment. Central Huin, a unit of the state-owned sovereign wealth fund China Investment, is buying more index ETFs. State-owned companies are also announcing share buybacks.

Singapore's Response to Tariffs

Prime Minister's Warning: Singapore's Prime Minister warned that the world is entering a more dangerous era with the US tariff announcements.
Strengthening Regional Trade: ASEAN economic ministers will convene to discuss ways to strengthen intra-ASEAN trade, sending a strong signal of ASEAN's commitment to regional economic integration.
Domestic Support Measures: Measures announced in this year's budget, such as vouchers and financial help for the unemployed, will provide support for any short-term strain.
New Task Force: A new task force will be set up to help businesses and workers address immediate uncertainties and become more resilient.
Commitment to Open Trade: Singapore will forge closer links with like-minded partners who share its commitment to open and free trade.

South Korea's Presidential Election

Election Date: South Korea has declared June 3rd as the date for its presidential election.
Trigger: The election was triggered by the ousting of its former leader.
Interim Leader: Acting president Hanukku will stay on as the interim leader until the election.
Candidates: Candidates are required to register by May 11th, with the campaign period set to begin the next day. Lee Jang, the country's main opposition leader, is regarded as a top contender.

NATO's Indo-Pacific Defense Cooperation

NATO Chief's Visit to Japan: NATO chief Mark Rutte is in Japan to step up Indo-Pacific defense cooperation amid tightening global tensions.
China's Military Expansion: Rutte described China's expansion of its armed forces and defense capabilities as "staggering."
Practical Cooperation: The 32-member alliance is looking for more practical cooperation with Tokyo and other Indo-Pacific countries.

Panama Canal Tensions

US Concerns: US President Trump has repeatedly threatened to take back the Panama Canal, claiming China's control of operations is threatening US national security.
Panama and Beijing's Denial: Panama and Beijing have both denied the allegation.
US Military Presence: Trump has increased American troop presence in the region.
BlackRock Deal: A BlackRock consortium deal to buy two Panama ports from Hong Kong's CK Hutchison has been thrown into doubt after Panama's top auditor found irregularities in its payments.
Impact on Citizens: The US-China tensions are impacting not just big businesses but also ordinary people, such as Chinese nationals working in Panama and Panamanian students studying in China.

Market Volatility and Investor Strategy

Market Recovery: Regional markets are recovering some lost ground as scope for tariff negotiations propped up investor sentiment.
Investor Sentiment: Investor sentiment remains shaky as Beijing and Washington exchange warnings of retaliation.
Central Bank Intervention: Chinese benchmarks rose modestly after the country's sovereign wealth funds stepped in to buy shares and shore up investor sentiment.
Retail Investor Advice:
- Sit tight and stay informed.
- Carefully assess the situation, which is changing every day.
- Maintain some cash to have flexibility.
- Invest in high-grade, high-quality fixed income.
- Consider Chinese equities.
- Stay invested in AI stocks.

ASEAN Economic Integration

Special Meeting: A special meeting will be convened among ASEAN economic ministers to discuss ways the regional block can work together to strengthen intra-ASEAN trade.
Commitment to Regional Integration: Singapore Prime Minister Lawrence Wong says this will send a strong signal of ASEAN's commitment to regional economic integration.
Tariff Impact: The 10 ASEAN countries have been slapped with import tariffs of up to 49% by the United States, with Singapore facing the baseline 10% tariff.

Myanmar Earthquake Relief Efforts

International Aid: South Korea and Japan have pledged additional supplies to support relief efforts in earthquake-hit Myanmar.
Singapore's Rescue Operation: An 80-member strong rescue team from the Singapore Civil Defense Force has returned home after an 11-day deployment to Myanmar.
Impact of the Operation: The operation included rescuing survivors, recovering dead bodies, and providing aid to Myanmar.

Other Business News

Nippon Steel's Bid for US Steel: President Trump has launched a review of Nippon Steel's proposed takeover of US Steel, reviving hopes that the controversial takeover might still be back on the table.
Samsung Electronics: Samsung Electronics is projecting a 0.2% drop in first-quarter operating profit due to challenges from President Trump's sweeping tariffs.
BYD: BYD shares are on the rise after the EV maker flagged a record first quarter with sales of vehicles topping a million units.
Shein: Beijing is reportedly persuading fast fashion giant Shein to keep manufacturing in China.

Conclusion

The news program covers a range of critical issues in East Asia, highlighting the escalating US-China trade war and its wide-ranging consequences. The potential for a full-blown trade embargo, currency manipulation, and market interventions are discussed, alongside strategies for investors to navigate the uncertainty. The program also addresses Singapore's response to the tariffs, South Korea's upcoming presidential election, NATO's efforts to strengthen defense cooperation in the Indo-Pacific, and the geopolitical tensions surrounding the Panama Canal. Finally, the program reports on international aid efforts for Myanmar following a devastating earthquake. The overall tone is one of concern and uncertainty, emphasizing the need for vigilance and strategic planning in a rapidly changing global landscape.