Late last Friday, US President Donald Trump announced he would exempt certain electronic products from tariffs. Electronic products are heavily traded between the US and China. The two countries exchanged tit-for-tat tariffs last week, with both reaching over 100%. Several technology heavyweights raised the red flag, noting these tariffs would have a significant impact on their business. Just before reciprocal tariffs went into effect in April, China reported higher-than-expected growth in exports, which came in part due to US companies frontloading orders.

• Despite making electronic products exempt from tariffs, President Trump said yesterday this was only a temporary measure. Trump said a new tariff on semiconductors will be announced this week. He plans to implement sector-specific tariffs for electronics.
• Exports from China rose by 12.4% year-over-year in March. This exceeded the 4.6% increase economists had expected, based on a Bloomberg survey. Exports to the US increased, which came in part due to some US companies frontloading orders before more tariffs went into effect.
• China’s imports dropped by 4.3% year-over-year in March, which was the second straight decline. Domestic demand continues to be relatively soft in the country, worrying lawmakers as the country enters a trade battle with the US.
• In Canada, trade continues to disrupt consumer confidence. The Bloomberg Nanos Canadian Confidence Index fell to 45.9 over the week ended April 11, its lowest level since early 2023. Fears continue to grow about the health of Canada’s economy and the strength of its labour market.

Each economic data release is being analyzed through the lens of global trade tensions. The on-again, off-again tariffs and the actual size of tariffs that are in place have raised uncertainty about the global economy and financial markets. In Canada, there will be some upcoming announcements that might give an indication of how Canada’s economy is faring amid higher tariffs. Inflation will be released today and retail sales next week. The Bank of Canada will make its next interest-rate announcement tomorrow.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.