Core Viewpoint - U.S. President Donald Trump has announced a new 15% global baseline tariff following a Supreme Court ruling that deemed reciprocal country-specific levies illegal, which has led to significant market reactions in Europe and Wall Street [4]. Group 1: Tariff Announcement - The new tariff is set at 15%, which is the maximum legal amount allowed [4]. - This decision comes after the Supreme Court's ruling that invalidated previous country-specific tariffs [4]. Group 2: Market Reactions - The announcement has negatively impacted European futures, indicating a bearish sentiment in the market [4]. - Wall Street is also expected to start the new week with significant declines, reflecting investor concerns over the tariff implications [4]. Group 3: Trade Agreements - U.S. trade envoy Jamieson Greer has stated that all existing trade agreements will remain in place despite the new tariffs [4]. - The European Commission has urged the U.S. to honor its trade pact following the Supreme Court's decision [4].

Investment Rating - The report does not explicitly provide an investment rating for the industry but indicates a cautious outlook due to escalating trade tensions and potential economic impacts [1][3]. Core Insights - China's recent retaliation against the additional 50% US tariffs is expected to have limited direct economic damage, as tariffs may already be at prohibitive levels. However, the escalation of tensions could hinder negotiations and increase risks in other sectors, particularly finance [1][3]. - The report anticipates a greater likelihood of domestic stimulus measures being implemented to support economic growth amid external shocks, with a focus on consumption and fiscal policy expansion [4][6]. Summary by Sections Tariffs and Trade Relations - China's tariffs on US goods have increased by an additional 50%, contributing to an overall 84% increase in tariffs recently [2]. - The US is a significant supplier for agricultural products, energy products, and high-end manufacturing goods, with China ramping up domestic production and potentially diversifying suppliers [2][3]. Economic Impact - The report suggests that the direct economic impact of the tariffs may be limited due to their prohibitive nature, and growth forecasts remain stable despite the tensions [2][3]. - Inflationary pressures from retaliatory tariffs are expected to be mild in the context of a deflationary macro backdrop [2]. Policy Outlook - The report predicts that fiscal policies will focus on expanding domestic demand, with potential funding of RMB 1 to 1.5 trillion expected mid-year [4][6]. - Monetary policy adjustments, including a 40 basis point cut in policy rates and a 100 basis point reduction in the reserve requirement ratio, are anticipated to support small and medium-sized enterprises [6].