TL;DR

Trump signals China tariff cut; U.S.-UK trade deal lifts equities; Taiwan exports, TWD surge.

Highlights

• Trump signals possible reduction of U.S. tariffs on Chinese goods to 80% (from 145%) ahead of weekend trade talks; urges China to open markets 1.
• China’s April exports rise 8.1% y/y, but U.S.-bound shipments drop 17.6% post-tariffs; exporters shift to ASEAN/EU 2.
• U.S. and UK finalize trade deal: U.S. cuts tariffs on UK autos, steel, and aluminum; UK airline to buy $10B in Boeing jets 3.
• Taiwan’s April exports hit record $49B (+30% y/y) as firms front-load ahead of U.S. tariffs; TWD posts sharpest rally since 1988 15.
• Nvidia to launch downgraded H20 AI chip in China by July to comply with U.S. export restrictions 4.
• SMIC Q1 profit surges 161.9% y/y, but warns of up to 6% Q2 revenue drop amid trade uncertainty; shares fall 10.
• Crypto market rallies: $830M in shorts liquidated as BTC tops $100K, ETH up 20%; Metaplanet adds 555 BTC 1113.
• DAX hits record 23,522.67 (+0.6%) on U.S.-UK trade deal optimism; global equities firm 20.
• Nippon Steel forecasts 43% profit drop due to U.S. tariffs; seeks U.S. Steel deal by June 5, Trump approval uncertain 9.
• xAI (Elon Musk) seeks $120B valuation after X merger, intensifying AI sector funding race 14.
• India’s Sensex drops 425 points on renewed border tensions with Pakistan; volatility spikes 16.

Commentary

Trade policy remains the primary driver for global markets this morning. Trump’s openness to lowering tariffs on Chinese goods to 80%—still restrictive, but a notable reduction—sets the tone for upcoming U.S.-China talks 1. The impact of existing tariffs is clear: China’s exports to the U.S. have dropped sharply, while overall exports remain resilient as Chinese firms redirect shipments to ASEAN and Europe 2. Taiwan’s record export figures and the Taiwan dollar’s strongest rally in decades highlight the extent of front-loading and currency volatility as supply chains adjust to shifting trade barriers 15.

The U.S.-UK trade deal offers a rare positive catalyst, with tariff reductions on autos, steel, and aluminum, and a major Boeing order supporting U.S. industrials 3. This agreement has lifted sentiment in European equities, with the DAX hitting a record high, and is contributing to a generally firmer tone in global equities 20.

In tech, Nvidia ’s move to launch a downgraded AI chip in China illustrates how U.S. export controls are shaping semiconductor strategy and market access 4. SMIC ’s strong Q1 profit is overshadowed by a cautious Q2 outlook, reflecting ongoing trade and supply chain uncertainty 10. Meanwhile, the AI funding race is accelerating, with Elon Musk’s xAI seeking a $120B valuation after its merger with X 14.

Crypto markets are seeing renewed risk appetite, with sharp rallies in Bitcoin and Ethereum triggering major short liquidations and further institutional accumulation, as seen with Metaplanet’s latest BTC purchase 1113. On the downside, India’s equity markets are under pressure from renewed geopolitical tensions with Pakistan, driving up volatility and risk aversion in the region 16.

Traders should monitor developments from the U.S.-China and U.S.-UK trade talks, currency moves in Asia, and ongoing volatility in tech and crypto assets. Headline risk from trade and geopolitics remains elevated as the U.S. session approaches.