讀後心得

The new "reciprocal tariff" measures from the Trump administration will take effect on April 9, imposing new tariffs on products imported from various trading countries. In addition, tariffs on imported cars and parts have been raised from 2.5% to 25%, which was implemented on April 3. Economists warn that this may provoke international retaliation, as countries prepare to respond. Liu Jiahao from Standard Chartered Bank mentioned that with the implementation of these tariffs, US stocks face risks and pointed out that signs of recession might appear in the US economy, as the stock market has already fallen by about 10% in the first quarter. Nevertheless, the fundamentals of the US economy remain strong, and investors should maintain a long-term optimistic outlook. The Federal Reserve may respond to economic uncertainties by reducing interest rates.

The latest "reciprocal tariff" measures introduced by the Trump Administration will take effect at midnight on April 9, U.S. time, imposing new tariffs on products imported into the United States from various trading nations. At the same time, tariffs on imported American cars and components will be raised from 2.5% to 25%, with this adjustment taking effect on April 3. The impact of political decisions will undoubtedly immediately hit the market, as reflected in the volatility of the risk index VIX. Economists and financial experts generally believe that countries will retaliate accordingly and prepare to respond in the tariff war!

In the market watch PODCAST program premiering at 7 PM on April 5 (Saturday), guests pointed out that investors should be aware of the potential emergence of a "Trump recession" behind the tariffs. Clearly, the implementation of the tariff policy has prevented the stock market from rebounding, leading to a continuous decline instead. The uncertainty of U.S. policy has become the main reason for stock market volatility in the first quarter of this year. Reviewing the state of the financial market in the first quarter, U.S. stocks fell approximately 10% from peak to trough, performing worse than other major regions.

Currently, signs of slowing growth and even stagflation in the U.S. economy confirm the impact of the reciprocal tariff details announced on April 2. The Trump Administration's increase in tariffs is, on one hand, an indiscriminate policy aimed at trading opponents, while on the other hand, it targets specific industries and products, with the automotive industry being the first affected sector. According to the Federal Register, the 25% tariff on cars set by the U.S. President will take effect at midnight on April 3 Eastern Time and will extend to approximately $600 billion in automotive parts and electronic product imports, with the U.S. clarifying the tariff collection procedures for parts within 90 days.

The specific tariff rates applied to each country are determined based on data from U.S. trade-related government agencies, using a simple calculation formula, which is: Reciprocal Tariff Rate = 2024 Trade Deficit Amount of that Country with the U.S. ÷ 2024 Import Amount of that Country from the U.S., with tax rates ranging from 0% to 99%. The U.S. Trade Representative has announced the calculation formula on its official website.

Analysis indicates that the S&P 500 index has outperformed global stocks over a longer period. The strong performance of U.S. stocks, especially technology stocks, has attracted most market capital over the past two years. With the implementation of tariffs and the pressure of an anticipated economic recession, does the market face risks? If so, what impact will that have on investors? Experts suggest that considering the ongoing uncertainty surrounding tariffs, a neutral view on the U.S. stock market should be adopted in the short term. However, the fundamental strength of the U.S. economy should not be underestimated, including the continuous achievement of corporate earnings and innovation ability, leading international institutional investors to maintain an optimistic long-term outlook on U.S. assets.

Based on past experience, when the U.S. economy experiences a recession independently, stock market performance usually lags behind the global market. If this is the case, the Federal Reserve typically responds by lowering interest rates, thus supporting U.S. government bonds. The Federal Reserve revealed relevant data in its March meeting, paving the way for interest rate cuts in the second half of the year.