Investment Rating - The report suggests a negative outlook on the trade dynamics between the US and China, indicating that the current situation could escalate into a financial crisis akin to the Cuban Missile Crisis [22][24][38]. Core Insights - The US aims to eliminate the trade deficit and may raise tariffs on Chinese imports from 54% to 79%, potentially generating an additional $107.4 billion in tariffs [4][44]. - China is expected to retaliate, and the report discusses the implications of such actions on both economies, highlighting that the US could raise $446.7 billion from tariffs on Chinese imports, significantly more than the $47.5 billion China would collect from US imports [6][47]. - The report emphasizes the strategic game theory aspect of the trade war, suggesting that both nations are engaged in a high-stakes negotiation that could have severe economic consequences [11][19][22]. Summary by Sections Tariff Dynamics - China announced a 34% tariff on all US imports, which the report views as a miscalculation in the trade war context [2][40]. - The US has imposed a 34% tariff on all Chinese imports, in addition to a 20% tariff on fentanyl [3][41]. - The report anticipates that the US may further increase tariffs, potentially leading to a total of $339.4 billion in tariffs from China [44]. Economic Impact - The 54% tariff is projected to negatively impact Chinese GDP growth by -2.4%, while a 79% tariff could lead to a decline of over 3% [48]. - The report notes that the total tariffs raised from all trading partners could exceed $934.2 billion, significantly affecting the US fiscal debt to GDP ratio [47]. Strategic Considerations - The report discusses the potential for China to leverage systemic risk to force the US to negotiate, suggesting that the stakes are higher than just trade [19][22]. - It posits that the optimal strategy for China would be to abolish retaliatory tariffs and engage in cooperative negotiations with the US [14][15]. - The report highlights the importance of patience in negotiations, indicating that both countries need to recognize the costs of continued conflict [33][69].

Investment Rating - The report suggests a strong emphasis on implementing high tariffs as a strategy to achieve trade balance and reduce fiscal deficits, indicating a positive outlook for the USD and yen in the context of these tariffs [17][41]. Core Insights - The report outlines various tariff scenarios aimed at eliminating the trade deficit, with a focus on achieving a minimum 30% share of bilateral trade for the US [6][9]. - It emphasizes the need for substantial tariffs to prevent trading partners from devaluing their currencies to counteract the tariffs, which would undermine the intended effects [8][41]. - The analysis indicates that scenarios with tariffs below 25% are considered sub-optimal, as they fail to meet key objectives and leave significant trade deficits [34][38]. Summary by Sections Tariff Scenarios - Scenario 1 proposes 45% tariffs globally and 70% on China, potentially raising $1.4 trillion and eliminating trade deficits with major partners [10][12]. - Scenario 2 suggests 70% tariffs on China and 45% on the EU, raising approximately $1 trillion, leaving a trade deficit of $250 billion [18][20]. - Scenario 3 involves 70% tariffs on China and 25% on the rest of the world, raising $900 billion but leaving a trade deficit of over $400 billion [24][27]. - Scenario 4 proposes 25% tariffs across the board, raising $709 billion but still resulting in a $600 billion trade deficit [32][34]. - Scenarios with tariffs below 25% are deemed ineffective, with a 15% tariff scenario raising only $425 billion and leaving an $884 billion trade deficit [37][38]. Objectives of Tariffs - The report identifies six key objectives for the US in the trade war, including rebalancing trade, reducing the fiscal deficit, and ensuring tariffs are substantial enough to prevent currency devaluation by trading partners [6][9][41]. - It stresses that achieving a US share of at least 50% in bilateral trade is crucial, with any scenario falling below 30% being unacceptable [41].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies involved in the trade war and inflation context Core Insights - The report discusses the implications of President Trump's proposed tariffs on various trading partners, suggesting that significant tariffs could restore trade balance with countries like Canada, Mexico, and China [2][5] - It highlights the importance of currency movements in trade wars, indicating that retaliatory currency devaluation could be a more effective strategy than imposing tariffs [12][28] - The analysis suggests that the outcome of the trade war may hinge on China's currency policy, with potential implications for US inflation and economic stability [25][28] Summary by Sections Tariff Implications - President Trump is expected to announce reciprocal tariffs, with Canada likely to retaliate against $107 billion of US exports, which constitutes over a third of all US exports to Canada [5] - The report outlines potential tariffs, including a 40% tariff on EU imports and up to a 65% tariff on imports from Taiwan, aimed at restoring trade balance [2] Trade War Analysis - The report provides a historical perspective on the trade war with China, noting that by May 2019, the US had imposed 25% tariffs on $250 billion of Chinese imports, resulting in a net cost to the US of $62.9 billion due to China's currency devaluation [6][8] - It emphasizes that currency movements play a critical role in the trade war dynamics, with the CAD devaluing by 6.6% against the USD since mid-September [12] Currency and Inflation Dynamics - The report posits that countries should consider currency devaluation as a response to tariffs to optimize their inflation outlook, rather than solely focusing on trade deficits [12][28] - It discusses the relationship between inflation and currency strength, suggesting that the US needs a strengthening of the yen and USD to achieve its inflation targets [23][24] Game Theory and Central Bank Strategies - The report employs a Game Theory framework to analyze the optimal strategies for central banks in response to trade tensions, indicating that cooperation among major economies is unlikely [26] - It concludes that the US's inflation targets may not be achievable without significant currency adjustments, which could lead to deflationary pressures in the US while reflating economies like China [27][28]

2025/4/4 22:50 花旗速度 CitiPoint Asia: How To Win A Trade War And The Battle Against Inflation - Part I Asia Trading Strategies NOT A PRODUCT OF CITI RESEARCH – INTENDED FOR INSTITUTIONAL CLIENTS ONLY. MACRO: HOW TO WIN A TRADE WAR AND THE BATTLE AGAINST INFLATION PART I Ahead of the expected announcement of tariffs by President Trump on 2 Apr we look at what could be expected and present a framework that examines the decision making process of President Trump. Imagine that two people are playing a game - pers ...

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies within it [2]. Core Insights - The aggregate Monthly Active Users (MAU) for AI Generated Content (AIGC) apps in China reached 248 million in February 2025, driven by the growth of DeepSeek and Tencent's Yuanbao, achieving a 20% user penetration rate in just 23 months, faster than short videos which took 30 months [1][3] - Post DeepSeek, there has been a notable change in user demographics, with an increase in female, younger, and older users engaging with AIGC apps [1][4] - Users spend approximately 9 minutes daily on AIGC apps, with DeepSeek's Daily Active Users (DAU) stabilizing around 45 million after peaking at 53 million [1][3] Summary by Sections User Growth and Engagement - AIGC apps in China have seen significant growth, with MAU increasing from 148 million in January 2025 to 245 million in February 2025, compared to 37 million in February 2024 and 8 million in May 2023 [3][4] - DeepSeek achieved the fastest DAU growth in the history of China Internet, reaching 50 million DAU in just 42 days [3] - The total time spent on AIGC apps reached 464 million hours in February 2025, an increase of 8 times year-over-year and 66% month-over-month [3] User Demographics - In February 2025, 61% of AIGC app users were male, while female users increased by 128% from December 2024 [3][4] - The user base has broadened significantly, with users under 30 growing by 108% and users over 40 growing by 238% [4] User Behavior - Users spend an average of 8.5 minutes per day on DeepSeek, with 63% of users spending between 1-10 minutes daily [7] - Despite the introduction of alternative channels for accessing DeepSeek's model, its DAU remains resilient around 45 million [7]

Investment Rating - The report assigns a positive investment rating to Shuanghuan Drive (002472.SZ) and a cautious outlook on UBTECH (9880.HK) due to its partnerships with leading NEV OEMs in China [1][3]. Core Insights - Humanoid robots are expected to become a significant trend, but investors are cautious due to uncertainties surrounding mass production timelines [1]. - Component suppliers, particularly those with high technology barriers, are viewed as having better long-term investment potential compared to humanoid robot brands [2]. - Strategic partnerships and capital support are deemed critical for the economic viability of humanoid robots in industrial applications over the next 2-3 years [3]. Summary by Sections Industry Trends - The shift towards model-free reinforcement learning and the use of large language models (LLMs) may lead to increased homogeneity among humanoid robots, making hardware stability and durability key differentiators [2]. Economic Viability - Simple industrial applications such as moving and sorting are projected to become economically viable within 2-3 years, driven by improved training and reduced production costs [3]. Joint Selection - The report highlights that harmonic reducers and planetary roller screws are ideal for humanoid robots due to their precision and durability, with companies like Leader Drive (688017.SS) and Hengli Hydraulic (601100.SS) being well-positioned in the supply chain [4]. Recent Developments - The report discusses the supply chain for humanoid robots, identifying key component suppliers and their roles in the production of humanoid robots [11].

Vi e w point | 16 Mar 2025 20:28:08 ET │ 14 pages We visited HK/TW/SG investors last month; we saw strong interest in DeepSeek beneficiaries including edge AI devices, domestic AI infrastructure supply chain, AI software monetization as well as ADAS beneficiaries. While we see Investors' concern regarding Nvidia supply chain emerging unavoidably, interest in Apple supply chain also waned, sentiment towards national handset subsidy peaked-out but interest in China software increased. Besides fund flow suppor ...

纪要 关注公众号:水木Alpha Citi Research 12 March 2025 US Equity Strategy Where Macro Meets Micro 2025 Outlook: Expect a Volatile Bull Scott Chronert Ac Managing Director, US Equitv Stràt Scott.t.chronert@citi.com +1 (415) 951-17個 (7 ew Pettit Director Drew.pettit@citi.com +1 (415) 951-1621 Patrick Galvin, CFA Vice President patrick.galvin@citi.com +1212-816-5 See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations Citi Research is a division of Citigroup Global Markets Inc ...

关注公众号:水木Alpha Viewpoint | Citi Research 12 Mar 2025 17:51:34 ET | 9 pages North America Hardware & Storage Expert Call: Megatrends: Storage Supply @ernand Dynamics Update. HDD Demand Persists, Supply Tightness; Flash 2H Improvement CITI'S TAKE On March 12th, we hosted a call with HDD/SSD experts, TrendFocusa following their recent Asia visit. We summarize the key takeaways inside based on the experts' opinion. HDD HDD build plans appear stable, with fairly solid demand continuing, on track for steady growth ...

Vi e w point | 11 Mar 2025 18:00:35 ET │ 44 pages ChinaCommunications Infrastructure CPO is Coming But Adoption Takes Time; Buy T&S/TFC Optical as Networking Winners in Channel Expansion CITI'S TAKE Although Nvidia may introduce CPO switches during its GTC conference, we expect CPO switch adoption to take time and gradually reach ~25-30% in 2028-29, thus parallel volume growth of transceiver names and CPO- related players in 2026-27 is likely. CPO Scale-up (OIO) for xPU- interconnection remains a lucrative ...