Wednesday 09/04/25

Donald Trump defies market tumult and pushes ahead with trade war (Financial Times, James Politi, Aime Williams and Kate Duguid) shows that the president remains undeterred by the effect his tariffs are having as markets continue to fall and said “I know what the hell I’m doing”. Elon Musk slams Donald Trump’s trade tsar in sign of rift over US tariffs (Financial Times, Joe Miller) highlights increased prickliness among senior bods in the administration as Musk called trade adviser Navarro a “moron” while Navarro countered by describing Musk in a TV interview as a “car assembler” who was “protecting his own interests”. US stocks fall after Trump confirms 104pc tariffs on China (Daily Telegraph, Chris Price, Alex Singleton and Tim Wallace) reflects further US stock market weakness as Trump went ahead with 104% tariffs on China after all following hints earlier in the day about a potential trade deal between the US and China. Closer to home, Brussels eyes fresh retaliation as it struggles to counter Trump tariffs (Financial Times, Andy Bounds and Henry Foy) shows that the EU will announce a tariff retaliation plan early next week. How ‘liberation day’ rout compares with other notorious stock market crises (The Guardian, Richard Partington) is a really interesting read because it puts the current sell-off into historic context. As it stands at the moment, the Friday-to-Friday fall is about the same as the initial period of the 2008 financial crisis, 9/11 and 1987’s Black Monday.  * SO WHAT? * The markets are already reflecting disaster! In terms of the impact of the tariffs, Trump’s tariffs will damage the world (Financial Times, Martin Wolf) concludes that trade deficits won’t change much because although imports will fall, so will exports – which means that everyone just gets poorer while Trump wants to break China. He may drive the world into its arms (Daily Telegraph, Szu Ping Chan) observes that the president’s extreme and sudden measures – particularly on countries like Cambodia, Laos, Vietnam and Bangladesh – will make them more likely to seek out China as an ally after years of diplomacy. The problem is that economic, geopolitical and defence interests are often intertwined and if the US keeps hurting Asian countries as badly as this, they will gravitate towards China. Listings and mergers put on hold in face of tariff storm (The Times, Helen Cahill) shows that, unsurprisingly, more companies are putting their flotation plans on hold due to volatile market conditions. Klarna last week suspended plans for its IPO while Stubhub and Medline also suspended their listing plans while in the UK, the flotations of Shawbrook Bank (a “challenger” bank) and MPM (a pet food maker) were also put on ice. Also, Trump tariffs will hit UK economic growth, BoE official warns (Financial Times, Sam Fleming and Lucy Fisher) highlights a warning from the deputy governor of the Bank of England about the broader impact while The FTSE 100 businesses most exposed to Donald Trump’s tariffs (The Times) identifies a number of companies that are thought to be worst-hit by Trump’s actions. PE firms like Bridgepoint, CVC, Blackstone and KKR have suffered from the double-whammy of not being able to exit their investments via flotation of their assets because no-one will want to buy in markets like this AND the value of those assets will be

weakening as the days go by as markets adjust to Trump’s actions. Asia-focused banks like Standard Chartered and HSBC have taken a tumble because they are particularly exposed to the whole US-China trade war. The fortunes of Melrose Industries, which makes components for commercial and military aircraft, are closely correlated with those of Airbus, Boeing, Rolls-Royce, GE Aerospace and Pratt & Whitney as it does almost two-thirds of its business in the US. Another company that’s been hit badly is Watches of Switzerland, which has been hit by Trump’s 31% tariffs on Switzerland, where a large proportion of its products are made. Worryingly, the company makes 45% of its revenues in the US AND it had plans to expand there! That growth route is now looking increasingly like a liability. Oil and gas companies have been hit because there are worries that the economic impact of the tariffs could cause a global slowdown that will depress demand. On the flipside, companies that are more domestically focused, like utilities companies and supermarkets, have fared better.

In other news, Volodymyr Zelenskyy says Chinese men fighting for Russia captured in Ukraine (Financial Times, Christopher Miller) highlights the somewhat alarming news that Chinese soldiers have been fighting alongside Russian troops in eastern Ukraine, the first evidence of Chinese involvement in the war. * SO WHAT? * There’s a big difference between whether these soldiers are just mercenaries – and therefore acting independently – or whether there is some kind of state approval of their involvement. If this is an attempt to get Trump more riled and ready to give Ukraine more support then it hasn’t worked just yet…

Trump’s justice department to scale back enforcement of crypto cases (Financial Times, Stefania Palma) is an interesting article which shows that the US Department of Justice is now pulling back on the clampdown on crypto risks and it will no longer target crypto exchanges, mixing and tumbling services or wallets “for the acts of their end users or unwitting violations of regulations”. * SO WHAT? * All of this means a complete change for the DoJ which, under the Biden administration, was much more crypto-sceptic. This also calls into question all of its investigations and prosecutions so far. It’s good news for criminals who will find it easier to launder money and Trump who presumably wants to make a ton of money for himself via his own crypto interests.

Then in Donald Trump revokes licences for BP and Shell projects in Venezuelan waters (Financial Times, Jamie Smyth and Joe Daniels) we see that the president is continuing to double down pressure on Venezuela as he has now revoked licences for BP and Shell gas projects in Venezuelan waters. This cuts out yet another avenue for Venezuela to make money from its massive gas reserves. The companies had previously relied on special licences to operate from the Biden administration.

South Korea Announces Emergency Support for Auto Sector Against U.S. Tariffs (Wall Street Journal, Kwanwoo Jun) shows that the country’s government has pledged emergency support measures for its automotive industry in order to mitigate the impact of Trump’s trade tariffs. It will dole out more financial support, tax breaks and subsidies for carmakers after Trump imposed a 25% import tax on cars and auto parts. The government added that it would support Korean automakers’ expansion into markets outside the US, like Africa, Latin America and other parts of Asia. Clearly it’s going to take some time for them to reduce their reliance on the American market as, last year, the US accounted for 49% of its auto exports.

Porsche reports steep fall in orders from Europe and China (The Guardian, Lauren Almeida) highlights more gloomy news from the automotive sector as Porsche sales fell in Q1 as the uptick

in sales to the US (ahead of the tariffs perhaps??) was decimated by weakness in China, Germany and the rest of Europe.

Then in Prices for used Teslas drop in US and Britain (Financial Times, Ray Douglas and Chris Cook) we see that used Tesla prices are falling faster than other EVs, according to data from Auto Trader and CarGurus. This is likely to be due to a glut of previously leased cars coming onto the market as opposed to consumers avoiding anything to do with Musk. It seems that a lot is riding on sales of the revamped Model Y, but it has so much to contend with what with tariffs, consumer nervousness and rising competition.

Wall Street traders poised to bail out bankers in first-quarter results (Financial Times, Joshua Franklin) looks forward to the end of this week as US banks start reporting. Although volatile markets have been a buzz-kill for IPOs and M&A, they’ve been great for trading as everyone tries to buy low and sell high. * SO WHAT? * We’ll see soon enough but I’d imagine that banks with more trading capability will do better than those that haven’t – and they’ll probably bail out their M&A colleagues as well with higher trading volumes equalling higher revenues. TBH, though, M&A and IPO revenues – when they kick in – are way more than trading revenues, but for now trading rules because revenues are on track to be the best they’ve been since at least the start of 2014!

In Revolut fined €3.5mn over money laundering control failures (Financial Times, Akila Quinio) we see that Lithuanian regulators have fined the fintech for failing in its money-laundering controls. These failures “resulted in the bank not always properly identifying suspicious monetary operations or transactions carried out by customers”. Revolut responded by saying that it was committed to the highest standards of regulatory compliance and has taken immediate action to rectify the situation. * SO WHAT? * This isn’t disastrous but it is a bit of a pain for a fintech that only got a UK banking licence with restrictions last July and had aimed to become a fully-fledged bank later this year.

China gains dexterous upper hand in humanoid robot tussle with US (Financial Times, Ryan McMorrow, Eleanor Olcott and William Langley) highlights China’s advance in humanoid robots, citing Unitree’s G1 robot as a technological success story. Unitree’s robots are powered by open-source software which enables them to do things like run, dance or even execute roundhouse kicks! Other companies in this space include AgiBot, EngineAI, Fourier and UBTech. Unitree’s CEO reckons that the humanoid robot sector will have its “iPhone moment” within five

years. US competition includes Tesla, Google, Meta and specialists like Boston Dynamics, Figure and Agility Robotics. Japan and Europe’s industrial robot makers have focused more on collaborative robots rather than “stand-alone” humanoids. * SO WHAT? *This is particularly interesting because it looks likely that China is at the cutting edge of this world because it has a deep domestic supply chain already. At the moment, China beats the US on hardware capability but the US may have the edge (at the moment) on software. China also beats the Americans on component costs. I guess time will tell but it’s looking good for China at the moment!

Elsewhere in tech, Samsung boosts profits as customers stockpile chips ahead of US tariffs (Financial Times, Song Jung-a and Christian Davies) shows that Samsung Electronics posted decent quarterly profits thanks to customers stockpiling chips and buying smartphones ahead of US tariffs but rival SK Hynix continues to outperform. * SO WHAT? * Although this was good news, the company’s semiconductor division still has to contend with falling prices, delayed shipments of AI chips and rising losses in contract manufacturing. Also, you do wonder how much of what would have been purchased in Q2 was pushed into Q1, because this would suggest that Q2 isn’t going to make for pretty reading.

Then in UK hails new theme park as ‘vote of confidence’ in Britain (Financial Times, Daniel Thomas and Peter Foster) we see that the PM will today close a deal to secure a new Universal theme park in Bedfordshire that is expected to provide a £50bn boost to the economy. This marks the successful conclusion of months of negotiations and the government will commit a chunk of money to the infrastructure around the site. A planning application is expected imminently and could well be fast-tracked in a project that could be open to the public in 2031. This sounds pretty positive, don’t you think?

I may have said this before, but when I was about seventeen/eighteen I was very keen on joining either the Parachute Regiment or the Royal Marines as an officer. I had been in the army cadets at school and absolutely loved it (it’s basically like doing Scouts – but with guns). As part of that, schools liaison officers used to visit from time to time to keep in contact with those who were interested in a career in the armed services and they used to offer us some pretty cool things from time to time. One thing I was offered (and took up!) was a parachute course weekend in a place called Dunkeswell. I did what’s called a static line jump where the bag that your parachute is in is attached to the inside of the plane via a long cord. You basically jump out of the plane and once the full extent of the cord is reached the bag “stops” and your parachute and you continue to fall. As you fall, the parachute unfolds, opens (hopefully) and then you float towards the ground. This is a brilliant video of what it actually looks like to do this! Given that this is a solo jump (you’re not attached to anyone), it was pretty exhilarating! The only thing I didn’t see on this video was the parachute roll movement that we were trained to do to minimise the impact when you land. Unfortunately, one of our cohort didn’t do it quite right and broke her leg on impact. That was pretty nasty. The experience was intensified by the fact that we all had to pack our own parachutes. When we had that lesson, I don’t think I’ve ever been in a classroom where everyone has paid so much attention to the teacher 😨! There was a noticeable silence in the room when the instructor said “If you tie this knot incorrectly, you will double the breaking strength, your parachute won’t open and you’ll go splat!”. Nice. That was defo a character-building experience!