Citi(US:C)2025-04-11 02:20Investment Rating - The report does not explicitly provide an investment rating for the industry but indicates expectations for a Fed rate cut in May or June due to anticipated economic slowdown [10]. Core Insights - The 90-day pause on reciprocal tariffs, excluding China, does not prevent a slowdown in US economic growth and inflation [4][10]. - The average effective tariff rate has increased by approximately 21 percentage points from the beginning of the year, raising concerns about trade uncertainty and its impact on growth [4][6]. - A surge in non-China imports is expected, which may dampen growth in Q2 [4][9]. Summary by Sections Tariff Impact - The baseline 10% tariff remains in place against all countries, with significant increases for many [6]. - New tariffs of 105% on Chinese goods are in addition to existing tariffs, contributing to a high effective tariff rate [6]. - Sector-specific tariffs on autos, aluminum, and steel are still enforced, with new tariffs anticipated on pharmaceuticals and semiconductors [6]. Economic Forecast - The report anticipates a slowdown in growth, leading to potential Fed policy rate cuts of 125 basis points this year [10]. - The dynamics of the 90-day tariff pause may lead to a temporary surge in imports, affecting Q2 growth negatively [9]. - Consumer spending may initially strengthen in Q2 but is expected to slow down in Q3 due to ongoing uncertainty [9].