PING AN OF CHINA(HK:02318) Ping An Securities·2025-04-03 08:13Group 1: Report Industry Investment Rating No relevant content provided. Group 2: Core Views of the Report - Trump set a 10% benchmark tariff for all countries and higher reciprocal tariffs for 50 countries with large trade deficits with the US, which account for 70% of the US total imports in 2024. After the reciprocal tariff increase, the average US tariff rate will rise by 27%, significantly increasing the risk of US economic recession and secondary inflation. This will also increase China's export pressure, and China's export growth rate may turn negative in 2025 [3]. - The performance of US major asset classes remains uncertain, depending on the US economic resilience, other countries' counter - measures, etc. Other countries may choose monetary easing and currency depreciation, which will support the US dollar to gradually bottom out, and US Treasury bonds may tend to flatten. Gold and inflation - protected bonds are favored, while US stocks are bearish, and there are both bullish and bearish impacts on the US dollar and US Treasury bonds [3]. - In the short term, domestic risk - aversion sentiment prevails in China. The bond market may break through in April, and policy statements should be monitored. The export pressure caused by tariffs has increased significantly, leading to a pattern of strong bonds and weak stocks in the short term [3]. Group 3: Summary by Related Catalogs Trump's Tariff Policy Details - On April 2, Trump set a 10% benchmark tariff for all countries and higher reciprocal tariffs for 50 countries with large trade deficits. The reciprocal tariffs are "equivalent" but calculated by considering factors such as tariffs, unfair taxes, non - tariff barriers, and exchange - rate manipulation. Canada and Mexico are excluded from the reciprocal tariff list, and for China, the reciprocal tariff may be cumulative with the previous 20% tariff due to the fentanyl issue, reaching 54% [3][5]. Impact on the US Economy - The reciprocal tariff increase will raise the US average tariff rate by 27%, pulling up core PCE inflation by 2.7% in the next year and dragging down the US real GDP by 1.1% - 2.4%. It also increases the risk of recession and the possibility of wage - inflation spiral and secondary inflation, which restricts the Fed's dovish attitude [3][9][10]. Impact on China - The US reciprocal tariff means greater export pressure for China. It is estimated that China's export growth rate in 2025 may turn negative. The additional 26% tariff on China compared with other major US trading partners may lead to a 4.6 - percentage - point decline in China's export year - on - year and a 0.9 - percentage - point drag on GDP. Considering the global manufacturing PMI decline, the export growth rate may be even lower [3][11]. Impact on Asset Classes - For US assets, the performance is uncertain. Other countries' possible monetary easing and currency depreciation may support the US dollar to bottom out, and US Treasury bonds may flatten. Gold and inflation - protected bonds are favored, while US stocks are bearish, and there are both bullish and bearish impacts on the US dollar and US Treasury bonds [3][22]. - In China, in the short term, risk - aversion sentiment prevails, resulting in a pattern of strong bonds and weak stocks. The bond market may break through in April, and the 10 - year Treasury bond interest rate is expected to be in the range of 1.7% - 1.85% [3][23]. Market Pricing Pattern Changes - The market's pricing pattern for tariff news has changed from a strong - dollar, weak - stock - and - bond scenario to a strong - Treasury - bond, weak - dollar - and - US - stock scenario, which is a shift from dollar - safe - haven trading to US - recession trading. The reasons include increased policy uncertainty, a weaker - than - expected tax - cut framework, and excessive tariff increases on Mexico and Canada [20].