Trump And Powell

Donald Trump's recent attacks on Federal Reserve Chairman Jerome Powell alarmed several of his top advisers, who warned that any attempt to remove the central bank chief could trigger as much market turbulence as the ongoing trade war.

These warnings, along with this week's market volatility, appear to have resonated. On Tuesday, Trump backtracked on his threats to remove Powell, telling reporters in the Oval Office: "I have no intention of firing him."

US: Open To Dialogue With China

US Treasury Secretary Scott Bessent moved to rebuild bridges with China on Wednesday, asserting that there is an "opportunity to reach a major trade deal" with the Asian giant to end the recent trade conflict.

"If they want to rebalance the relationship, let’s do it together," Bessent stated during an appearance at the Institute of International Trade and Finance in Washington.

According to the Wall Street Journal, the US government is considering cutting tariffs on Chinese goods to between 50% and 65%, a significant reduction from the current 145% rate.

US Fiscal Deficit To Narrow

The US federal budget deficit for the current fiscal year is expected to shrink modestly compared to 2024, aided in part by higher tariff revenues and a springtime tax collection boost, according to analysts at Wells Fargo.

In a client note, analysts led by Michael Pugliese forecast that the federal budget deficit — which occurs when government spending exceeds revenue — will reach $1.70 trillion, slightly below the $1.83 trillion recorded in 2024.

No Talks Underway

Despite claims from the White House suggesting that tensions with Beijing would ease this week, China maintains there are no ongoing trade talks with the United States.

"There are currently no negotiations on economic and trade matters between China and the United States," stated He Yadong, spokesperson for China's Ministry of Commerce.

This sentiment was echoed by Guo Jiakun, spokesperson for the Ministry of Foreign Affairs.

Both reiterated China's official stance that it remains open to dialogue with the US.

Could China Cut Ties With The US?

In theory, Chinese consumers could absorb the impact of a collapse in exports to the United States, but only with significantly greater government support than policymakers currently appear willing to provide, according to analysts at Capital Economics.

"Retail sales in China are more than ten times larger than the country’s exports to the US," the firm noted, suggesting a 4% increase in domestic goods consumption over two years would be required to offset the potential 2 trillion yuan impact of US tariffs.

While further policy support is possible, Capital Economics remains "sceptical that Chinese households will receive sufficient assistance to allow their spending to fully compensate for the loss of US demand."

Tech Giants Face EU Sanctions

On Wednesday 23 April, the European Commission announced financial sanctions against US tech giants Apple and Meta (Facebook, Instagram, and WhatsApp) for competition law violations, despite ongoing tensions with President Donald Trump over tariffs.

Apple has been fined €500 million, while Meta must pay €200 million for breaching regulations regarding the use of personal data.

In 2024, Meta offered European Facebook and Instagram users a choice: either consent to all their data being used for commercial purposes or pay to opt out of advertising — with no intermediate option, such as personalised ads using less personal data.

The Commission ruled this violated European regulations.

Tesla Rescue Underway

Elon Musk has announced plans to return to Tesla.

On Tuesday night, Musk informed investors he would resign from his role as head of the Department of Government Efficiency (DOGE) next month.

Some optimists predict that Musk's withdrawal from DOGE will be enough to shield Tesla from further trouble.

Tesla shares (TSLA) rose more than 3% in early trading on Wednesday, even after the electric car maker reported a 71% slump in net profits due to falling global sales.

TSMC: Strong Growth Ahead

Taiwan's TSMC, the world’s largest contract chip manufacturer, announced that its next-generation chip manufacturing process, known as A14, will enter production in 2028, as part of efforts to maintain industry leadership.

The technology promises up to 15% faster performance and 30% lower power consumption compared to previous chips.

Nanometre chip production processes are crucial for developing artificial intelligence (AI) applications and devices, which require extremely small semiconductors to function.

TSMC, which counts Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and AMD (NASDAQ:AMD) among its top clients, dominates the global advanced semiconductor foundry market, accounting for over 70% of revenues in the first quarter.

New SEC Chairman

In one of his first public appearances as the newly appointed Chairman of the US Securities and Exchange Commission (SEC), Paul Atkins made remarks at the agency’s third roundtable on cryptocurrency regulation.

Speaking at an event on 25 April, Atkins expressed hope for "enormous benefits" from blockchain technology, citing improved efficiency, risk mitigation, transparency, and cost reductions.

He reiterated that providing "clear regulatory rules" for crypto-assets would be a key objective under his leadership, hinting that the SEC under former Chairman Gary Gensler had contributed to regulatory and market uncertainty.

PepsiCo Faces Challenges

Ramón Laguarta, CEO of PepsiCo, warned of further volatility and uncertainty, especially concerning global trade developments, which are expected to increase supply chain costs.

The company reported a 10.19% fall in net attributable profit to $1.834 billion for the first quarter of 2025.

Revenue reached $17.919 billion, down 1.8% compared to $18.250 billion during the same period last year.

Domestic food business volumes fell by 1%, while North American beverage unit sales declined by 3%.