FT : Xi Jinping urges Vietnam to oppose Donald Trump’s tariff ‘bullying’

Xi Jinping urges Vietnam to oppose Donald Trump’s tariff ‘bullying’
US president says countries are trying to ‘screw’ America as China looks to shore up ties with trade partners

China’s President Xi Jinping has urged Vietnam to work with Beijing to oppose “unilateral bullying”, in a thinly veiled criticism of Donald Trump’s imposition of high tariffs on trading partners.

Xi made the remarks in a meeting with Vietnam’s Communist party chief To Lam in Hanoi, Chinese state news agency Xinhua reported late on Monday.

Xi is visiting south-east Asia this week, his first foreign tour of the year, aiming to reassure trade partners and strengthen ties with export-dependent countries rattled by Trump’s sweeping tariffs.

“China’s mega market is always open to Vietnam,” Xi said, adding that Beijing “will, as always, support Vietnam in taking a socialist path that suits its national conditions” and noting the countries’ “camaraderie plus brotherhood”.

Washington has targeted China and Vietnam — two of its largest trading partners — with some of its highest tariff rates, with Beijing facing a levy of up to 145 per cent and Vietnam 46 per cent, though the latter has received a 90-day reprieve. 

Xi told Lam, who assumed Vietnam’s top position last year, that the countries should “strengthen strategic resolve, jointly oppose unilateralism and bullying practices”, according to Xinhua.

He added that they should work together to uphold the global free trade system and maintain the stability of industrial and supply chains, while also strengthening strategic dialogue on diplomacy, defence and public security.

China and Vietnam signed 45 co-operation agreements during Xi’s visit, including one on railway development, according to Vietnamese state media.

Trump reacted to the meeting between China and Vietnam by saying that the countries were “trying to figure out, ‘How do we screw the United States?’” He added: “I don’t blame China. I don’t blame Vietnam.”

The US president has attacked the EU, which has imposed and then suspended retaliatory tariffs against US steel and aluminium, by claiming that the bloc was “formed in order to screw the United States”.

Trump has made clear that he expects foreign leaders to capitulate to his tariff campaign and offer deals to the US to resolve the trade wars he has launched against dozens of countries.

While Vietnam has made overtures to Washington, Beijing has made clear that it will not cave to what it views as bullying tactics.

Critics of Trump’s approach have warned that pressure on south-east Asian nations, which the US had been trying to draw into its diplomatic orbit, risked producing the opposite outcome by pushing them closer to Beijing.

In addition to Vietnam, Xi will visit Malaysia and Cambodia this week. 

Countries such as Cambodia, Bangladesh and Vietnam, which manufacture low-cost goods, have been slapped with some of the highest tariff rates due to their trade deficits with the US. The Trump administration has also accused countries in south-east Asia of serving as a conduit for Chinese companies seeking to avoid American tariffs. 

South-east Asian governments had already warned of slowing growth from a trade war between the US and China, as their economies are heavily dependent on trade with the two superpowers. 

Earlier in the week, Xi warned that the trade war would produce “no winners” and that countries should stand by the multilateral trading system.

>>> US After Hours Summary: ON +1% backs out of deal to acquire ALGM -12.6%; NFL

After Hours Summary: ON +1% backs out of deal to acquire ALGM -12.6%; NFLX +1.7% sets bullish goals in WSJ report; APLD -11.7%, FBK -4.9% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CSWC +0.7%

Companies trading higher in after hours in reaction to news: RKLB +5.8% (to provide hypersonic test launch capability with its HASTE launch vehicle), STRL +5% (to join S&P SmallCap 600), ASAN +2.8% (CEO bought 75493 shares), NFLX +1.7% (aims to double revs by 2030 and achieve a $1 trillion market cap, according to WSJ), ON +1% (ON withdraws proposal to acquire ALGM), REXR +0.6% (Chairman to retire), FNKO +0.5% (announces first licensed store in Southeast Asia)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: APLD -11.7%, FBK -4.9%, KMTS -3.5%, PNFP -2.4%

Companies trading lower in after hours in reaction to news: ALGM -12.6% (ON withdraws proposal to acquire ALGM), MRX -3.7% (announces launch of 8.5 mln share offering by selling shareholders), BMY -0.9% (provides update on Phase 3 ODYSSEY-HCM trial; did not meet its dual primary endpoints), LOW -0.4% (to acquire Artisan Design for $1.325 bln from Sterling Group), NNI -0.2% (acquires Next Gen Web Solutions), CAAP -0.2% (reports March traffic), AMAT -0.2% (acquires 9% stake in BE Semiconductor)

FT : Meta had ‘monopoly power’ after buying rival apps, FTC says

Meta had ‘monopoly power’ after buying rival apps, FTC says
Blockbuster antitrust trial that could force break-up of $1.5tn tech giant gets under way in Washington

Meta’s acquisitions of Instagram and WhatsApp helped give it “monopoly power”, the US Federal Trade Commission told a court on Monday at the start of a blockbuster trial that could force the $1.5tn tech giant’s break-up.

The case before a Washington district court is expected to give the clearest signal yet about the Trump administration’s stance on antitrust policy — and its appetite to take on Big Tech.  

FTC lawyer Daniel Matheson argued in his opening statement that Meta stymied competition from Instagram and WhatsApp by buying them in 2012 and 2014 for $1bn and $19bn respectively.

Meta had since built “monopoly power”, Matheson argued, with 85 per cent market share in time spent on its apps, according to the regulator’s analysis.

“Instagram could hurt us meaningfully” and was “pretty threatening to us”, Facebook founder Mark Zuckerberg said in a 2012 email presented as evidence by the FTC of his intentions to adopt a “buy-or-bury” strategy. 

Ahead of the WhatsApp deal, Zuckerberg in 2013 warned the messaging app could “tip markets like the US where SMS is still the primar[y] platform”, James Boasberg, the district judge overseeing the case, heard. 

Meta knew that the transactions would allow it to build a “moat” protecting it from other challengers, Matheson said.

If found guilty, Meta could be compelled to unwind its acquisitions of WhatsApp and Instagram, depending on the remedies sought by the FTC in the trial’s second phase.

The trial comes as Zuckerberg — who once banned Donald Trump from Facebook — has sought to draw closer to the US president, regularly visiting the White House and relaxing Meta’s content policy rules.

Earlier this month, Zuckerberg appears to have lobbied to secure a settlement between Meta and the FTC to avoid a trial.

The court case also marks the first significant test for Big Tech enforcement under Andrew Ferguson, Trump’s FTC chair who was in the courtroom on Monday. He has made clear his plan to crack down on the industry, which he has accused of censorship.  

Zuckerberg himself took the stand on Monday afternoon, while Meta’s former chief operating officer Sheryl Sandberg and rival leaders at TikTok, Snap and Google’s YouTube are also expected to testify.  

Matheson argued that Meta’s anti-competitive conduct had harmed consumers, pointing to “massively increased” advertising on Facebook and Instagram, as well as Meta’s “significant privacy failures over time”. 

He also accused Meta of trying to prevent Instagram’s fast growth to avoid Facebook’s “network collapse”, according to a confidential email written by Zuckerberg in 2018 and presented to the court. 

“I’d just keep it running. Insurance,” the Meta boss said of Instagram in 2012. Meta has said he did not mean to starve Instagram of resources. 

Meta’s lawyer Mark Hansen said the company had “no monopoly” and had never been “insulated” from competition.

The “misguided” lawsuit “strains this country’s creaking antitrust precedents to their limit”, Hansen said.

The Meta lawyer also disputed the market share presented by the FTC, saying Meta’s share of time spent by users on its apps dropped to less than 30 per cent when TikTok and YouTube were taken into account.

Arguing TikTok does not compete with Instagram “makes no sense”, Hansen added, pointing to jumps in Facebook and Instagram users when TikTok went temporarily dark in January. 

Meta improved Instagram’s and WhatsApp’s quality, Hansen added, pushing user numbers up dramatically since their acquisitions while keeping the services free.

Antitrust experts have argued that the FTC faces an uphill battle in the case, given judge Boasberg initially dismissed a first complaint on the grounds that it was “legally insufficient” before accepting a refiled case in 2022.

The regulator first sued Meta (then Facebook) more than four years ago, during Trump’s first presidency.

>>> US Close Dow +0.78% S&P +0.79% Nasdaq +0.64% Russell +1.11%

Closing Stock Market Summary
The stock market logged gains to start the week. An early surge saw the S&P 500 trade up as much as 1.8%, but the index settled 0.8% higher than Friday after briefly turning negative and bouncing off its session low around mid-day.

Buying interest was rooted in relief that smartphones, laptops, semiconductors, solar cells, and other electronic items will be exempt from the 10% global tariffs and the 125% tariff rate on imports from China. The subsequent deterioration was related in part to the understanding that imports from China are still subject to the 20% fentanyl-related tariff.

Also, Commerce Secretary Lutnick clarified that the exemptions will be temporary and President Trump said that he will soon announce a tariff rate for semiconductors.

The ebb and flow of equities was also driven by choppy action in mega caps. NVIDIA (NVDA 110.71, -0.22, -0.2%) was an influential name in that respect, trading up as much as 3.0% at its high and trading down as much as 1.7% at its low.

Ten of the 11 S&P 500 sectors ultimately closed in the green and seven of them finished more than 1.0% higher, including the financial sector, which was helped by a positive response to above-consensus quarterly results from Goldman Sachs (GS 503.98, +9.54, +1.9%).

The rate-sensitive real estate (+2.2%) and utilities (+1.8%) sectors led the pack as market rates dropped. The 10-yr yield dropped 13 basis points to 4.36% and the 2-yr yield dropped 12 basis points to 3.83%.

There was no notable US economic data today. This week's calendar features March Retail Sales on Wednesday, and March Housing Permits and Building Permits on Thursday. There is also an ECB meeting on Thursday and the central bank is expected to announce a 25-basis point rate cut.
  • Dow Jones Industrial Average: -4.8% YTD
  • S&P 500: -8.1% YTD
  • S&P Midcap 400: -11.7% YTD
  • Nasdaq Composite: -12.8% YTD
  • Russell 2000: -15.7% YTD

Looking ahead to Tuesday, market participants receive the following data:
  • 8:30 ET: April Empire State Manufacturing (consensus -14.8; prior -20.0), March Export Prices (prior 0.1%), Export Prices ex-agriculture (prior 0.1%), Import Prices (prior 0.4%), and Import Prices ex-oil (prior 0.3%)

>>> Fed Governor Christopher Waller (voting FOMC member) gives two different tar

Fed Governor Christopher Waller (voting FOMC member) gives two different tariff scenarios; sees rate cuts in both scenarios
  • In terms of output growth, with large tariff increases, I would expect the U.S. economy to slow significantly later this year and this slower pace to continue into next year. Higher prices from tariffs would reduce spending, and uncertainty about the pace of spending would deter business investment. I have heard this repeatedly from business contacts around the country—tariff uncertainty is freezing capital spending. Productivity growth, an important source of GDP increases in recent years, would slow as investment is allocated according to trade policy and not towards its most productive and profitable uses. A fall in productivity would likely lower estimates of the neutral policy rate, making the current policy rate more restrictive than it is currently. Any trade retaliation from U.S. trading partners would reduce U.S. exports, which would be a drag on growth. There is a long list of factors that can lower growth in this scenario.
  • Along with slower economic growth would come higher unemployment. With large tariffs remaining in place, I expect the unemployment rate, which was 4.2 percent in March, would rise by several tenths of a percentage point this year and approach 5 percent next year. Even as the economy has moderated over the past year, the unemployment rate has stayed remarkably stable and close to estimates of its long-term rate—in other words, close to the FOMC's goal. But a verifiable fact about the unemployment rate, based on history, is that when it starts to rise, as I expect it would under this scenario, it often rises significantly.
  • While I expect the inflationary effects of higher tariffs to be temporary, their effects on output and employment could be longer-lasting and an important factor in determining the appropriate stance of monetary policy. If the slowdown is significant and even threatens a recession, then I would expect to favor cutting the FOMC's policy rate sooner, and to a greater extent than I had previously thought. In my February speech, I referred to this as the world of "bad news" rate cuts. With a rapidly slowing economy, even if inflation is running well above 2 percent, I expect the risk of recession would outweigh the risk of escalating inflation, especially if the effects of tariffs in raising inflation are expected to be short lived.
  • Let me now turn to the second scenario, in which tariffs are lower. In this case, I would expect the 10 percent across-the-board tariff to be the baseline for the average trade weighted tariff. Under this scenario the effect on inflation would be significantly smaller than if larger tariffs remained. Here, the peak effect on inflation could be around 3 percent on an annualized basis. Since it may take some time for tariff-related price increases to work their way through production chains, the peak may be lower but still dissipate slowly. As trade negotiations proceed, I would expect that expectations of future inflation would remain anchored and short-term measures could even fall over time, helping keep overall inflation in check.
  • As a result of these limited effects on inflation and economic activity from steadily diminishing tariffs, I would support a limited monetary policy response. Anchored or even lower inflation expectations as the economy slows, combined with the view that smaller tariff effects are temporary, gives the FOMC room to adjust policy as progress on the underlying trend in inflation is revealed in price data. With the threat of a sharp slowdown or recession diminished, pressure to reduce rates based on falling demand would diminish also. That is, the policy response in this scenario could allow for more patience. The preemptive policy cuts we did last fall can allow us some time to wait and see if the hard data catch up to the soft data or vice versa and how much of the tariff will be passed through to the consumer. In such a scenario, the outlook for monetary policy might not look much different than it did before March. With a fairly small tariff effect on inflation, I would expect inflation to continue on its path down towards our 2 percent target. In this case, "good news" rate cuts are very much on the table in the latter half of this year.