Most world stock markets were closed on Good Friday (April 18). While US markets will resume trading on Monday, many European markets will remain shut for Easter. Notable exceptions were the Tokyo Stock Exchange and the Shanghai Stock Exchange: both were open on Friday. Tempered optimism Japan’s Nikkei index rose 1% on Friday to close its best week (it climbed 3.41%) in three months. This came amidst optimism about a possible trade deal between Washington and Tokyo. Japan economy minister Ryosei Akazawa began negotiations in the US capital on Wednesday, even as Donald Trump himself sent out positive signals. The US President wrote on Truth Social: “Big Progress!” The Shanghai Composite Index, however, closed 0.1% lower, trimming the weekly gain to 1.2%. China’s stocks fell on Friday as investors were disappointed over the lack of progress between Beijing and Washington on the tariff talks, despite some signals to the contrary. “By the way, we have nice conversations going with China. It’s, like, really very good,” Trump had told reporters at the White House on Friday. On Thursday, he had said that he may roll back some of the steep tariffs imposed on China. “I don’t want them to go higher because at a certain point you make it where people don’t buy,” Trump had said. Even as he rolled back tariffs on other countries to a base 10% earlier this month, Trump raised them to an eye-watering 145% on China. Beijing, on its part, has hit back with a slew of countermeasures, including 125% levies on US goods and new restrictions on the trade of seven rare earth minerals, which could disrupt supply chains to Washington’s detriment. Trump on the defensive? Trump’s ‘Liberation Day’ tariffs and overall economic policy have hit the US economy — and its markets — hard. His initial rollback on country-specific tariffs on April 9 (except for on China) led to some market resurgence. But this has not been the case across the board. Certain stocks — for instance, of chipmakers like Nvidia who face major supply chain concerns — have continued their downward slide, even as others like Apple have recouped some losses. The point is, the sheer uncertainty around what the President wants to do continues to make investors wary. And the situation is most certainly hurting Trump (read the US), both domestically and on the international stage. Internationally, the tariffs — to be sure, the Trump presidency on a whole — has significantly dented the United States’ image and long-held position as a reliable partner. New international formations and friendships are fast emerging as means to “Trump-proof” things in the future. Take for instance, China President Xi Jinping’s tour to Southeast Asia this week. “Trump’s tariffs have caused consternation in Cambodia and Vietnam. and upset in Malaysia,” Astrid Norén-Nilsson, a senior lecturer in the Study of Contemporary South-East Asia at Sweden’s Lund University, told the Associated Press on Thursday. “Xi Jinping can now carry out the tour equipped with the moral authority and goodwill of a singularly constant friend and reliable trading partner,” she said. And that’s exactly what Xi did. Battle with the Fed Domestically, Trump is battling inflation, fears of an imminent recession, and the US Fed. On Thursday, Trump went after Federal Reserve Chairman Jay Powell for not lowering interest rates (as the European Central Bank had just done). Trump ended his post on Truth Social by saying: “Powell’s termination cannot come fast enough!” Whether or not Trump can remove the Fed Chairman is besides the point — most experts say he cannot. However, any attempt to undermine the independence of the central bank will only add to the uncertainty and turmoil in the markets and the economy. At the end of the day, what Trump doesn’t understand is that Powell’s hands are tied, and Trump is the one who tied them. The inflationary pressures that Trump’s tariffs have put on the US economy mean that Powell has no choice but to keep the rates as they are. If there were no tariffs, the US Fed was indeed expected to cut interest rates. It is unclear how the tussle between the White House and the Fed will play out over the next days and weeks. What can be said with certainty is that uncertain times lie ahead.
