Economic Highlights from last week

• Retail sales rose +3.8% month-over-month, but pre-tariff stockpiling may inflate the data.
• Gold surged to a record $2,450/oz as investors flock to safety.

Trade War Updates

Nvidia’s Export Ban Hit

• Stock Plunge: Nvidia’s shares fell 7% as U.S. export controls blocked $5.5 billion in H20 chip sales to China.

• Market Impact: The Nasdaq dropped 2.55% as tech stocks buckled.

Why China Needs the U.S. More

U.S. tariffs are crushing China’s export-driven economy, exposing its heavy reliance on American markets.

• Critical Export Reliance: 15% of China’s exports ($582B in 2024) go to the U.S.—double the global average for a single trade partner. Common exports include electronics (22%), textiles/appliances (17–19%), and clean energy (13%), with no easy substitutes.

• Thin Domestic Demand: China relies heavily on exports. Local spending makes up just 44.5% of GDP, compared to 68% in the U.S.

• Factory and Job Crisis: Shein’s suppliers face 80% order cancellations in the U.S. This threatens 9 million jobs in Guangdong; China's major export hub.

• U.S. Impact: U.S. households face $4,900/year higher costs and 770,000 jobs at risk, but 10% export-driven GDP offers more flexibility than China’s 18%.

Executive Action on Minerals: Pivoting from China

On April 15, 2025, Trump signed an executive order to increase domestic critical mineral production. This move aims to reduce reliance on China and secure U.S. supply chains but may raise costs for technology and energy in the short term. .

Fed Stance and Political Firestorm

On April 16 at the Economic Club of Chicago, Federal Reserve Chair Jerome Powell warned tariffs could lead to stagflation, keeping rates at 4.25–4.5% despite the ECB (European Fed equivalent) lowering its rates to 2.25%. He won’t “rescue” markets from trade policies.

In response, Trump blasted Powell on Truth Social, calling him a “major loser” and threatening termination, claiming low inflation (2.4% CPI, March 2025) justifies immediate rate cuts to prevent a “SLOWDOWN.”

My Take: Short-Term Pain, Long-Term Gain

Markets plummeted—Dow down 970 points, Nasdaq off 2.55%, and the dollar at a three-year low. High rates slow growth and Trump can't oust Powell (Fed's independent, term ends May 2026). Despite this, I believe brighter days lie ahead. Here's what matters:

• U.S. Consumer Strength: 68% of GDP comes from consumer spending (vs. China’s 44.5%) – a built-in cushion.

• Tech-Energy Revolution: AI, minerals, and drilling could spark new growth, especially if rates drop.

• China’s Bind: Tariff pressures may force concessions by late 2025, easing tensions.

Volatility will persist as trade and Fed policy collide, but stay disciplined. Dollar-cost average into your portfolio to turn dips into opportunities. 

China’s trade dependence and our economic resilience position the U.S. to come out stronger, making now a prime time to stay invested for long-term gains.

Looking Ahead: Earnings and Volatility

Apple and Microsoft’s Q1 2025 earnings may impact the tech sector. Also, reports on Services PMI, Durable Goods Orders, and Consumer Sentiment reports 

reveal how trade and Fed policies affect growth.