Trump Vows New China Tariffs, Wall Street's 'Bessent' Effect | Bloomberg Daybreak: Asia Edition

President-elect Trump's announcement of new tariffs on Chinese goods and the nomination of Scott Bessent as Treasury Secretary sparked reactions in financial markets. The podcast discusses the potential impact of these decisions on global trade, economic growth, and the US-China relationship, with analysts offering perspectives on the US and Chinese economies, as well as opportunities in other APAC regions.

Trump's China Tariffs

• 00:00:25 President-elect Trump announced new 10% tariffs on all Chinese goods imported into the US, citing the illegal drug trade as a justification. Analysts believe this is a negotiating tactic to show strength and leverage in trade discussions with China, potentially leading to broader trade-related pressures in the coming months. The impact on the US and global economy could be significant, particularly if the tariffs extend to other countries.

Bessent's Appointment

• 00:00:49 The market's positive reaction to the appointment of Scott Bessent as US Treasury Secretary suggests a hope for a more moderate and rational approach to trade restrictions. While Bessent's 'dovish' stance is seen as a positive, his influence over Trump's decisions remains uncertain, and market volatility is expected to continue. The balance between tax cuts, deficit reduction, and economic growth is a key challenge.

US Economic Outlook

• 00:07:18 The US economy is currently considered to be in a good place, with strong dollar, high equity markets, and peak corporate profits. However, there is uncertainty about future upside from this high base of expectations, with potential for a second derivative wave in the industrial cycle or tech companies. Analysts believe that regulatory reforms could benefit big tech stocks and M&A activity, potentially benefiting smaller cap companies.

China's Economic Challenges

• 00:06:00 China's economy is facing significant challenges, with sluggish growth and weak consumer confidence. Analysts believe the key factor influencing the Chinese economy is the property market, as it represents a substantial portion of household wealth. Consumption vouchers and government support are unlikely to provide significant long-term stimulation without broader economic confidence and property market stability.

Opportunities in APAC

• 00:08:51 Given the strengthening US dollar and potential trade disruptions, other APAC regions present investment opportunities. Companies in emerging markets or those with businesses outside the US are facing challenges due to currency depreciation, particularly Consumer Staples. Analysts believe markets like India, Vietnam, and Southeast Asia may benefit from a potential shift in manufacturing and trade away from China.