1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The implementation of Trump's reciprocal tariff policy on April 2 will have a significant impact on global macro - asset classes, including financial derivatives and commodity markets, and the subsequent policy hedging will be a key variable [1][2][3]. - The global market is shifting from the progressive tariff expectation in Q1 to a more definite stagflation trading logic. High tariffs and potential retaliatory measures may exacerbate the macro - economic pattern of "slowing growth + stubborn inflation" [2]. - Policy hedging from the Trump administration and major economies such as China and Europe will shape the market's main trend in Q2 [3]. 3. Summary According to Relevant Catalogs 3.1 Potential Impact on Macro and Financial Derivatives Markets - **Policy Features and Initial Market Reactions**: The reciprocal tariff policy has some buffer measures, including exemptions for certain commodities and a phased implementation schedule. When the policy was announced, U.S. stock futures declined, U.S. bond yields dropped, the offshore RMB exchange rate depreciated, gold oscillated at a high level, and the Japanese yen strengthened [2]. - **Mid - term Market Logic**: The global market is moving towards a stagflation trading logic. The U.S. will first face "inflation" and then "stagnation", while major trade - surplus countries like China will first face the challenge of "stagnation" and then drive re - inflation through policy hedging [2]. - **Policy Focus**: The U.S. may implement tax cuts and the Fed may consider early interest - rate cuts. The pace of stimulus policies in major economies such as China and Europe will affect market expectations [3]. - **Market Outlook**: In Q2, the U.S. "hard data" is likely to cool down. The simultaneous weakness of U.S. stocks and the U.S. dollar continues, and the short - term depreciation space of the RMB is limited. China's domestic demand policies are clear, and the key lies in the implementation rhythm [3]. - **Stock and Bond Markets**: Currently, it is the transition period from the re - evaluation of Greater China's technology assets to the implementation of domestic demand policies. The stock index is in high - level oscillation, waiting for domestic demand policies. The bond market is shifting to oscillation, and in 2025, if there are two interest - rate cuts with a reduction of 30 - 40bp, the trading window of the treasury bond market should be noted, with the 10 - year treasury bond yield fluctuating between 1.6% - 1.9% [5]. 3.2 Potential Impact on Commodity Markets 3.2.1 Non - ferrous Metals and Precious Metals - **Policy Background and Impact Mechanism**: The unexpected tariff is a sign of the acceleration of the de - globalization process since 2016. It aims to solve the U.S. debt problem and reshape the global production and trade pattern. It will reduce U.S. imports, increase government revenue, but also put pressure on employment and consumption. It may also lead to more reciprocal tariffs globally and weaken the U.S. dollar's status [7]. - **Specific Metals Analysis** - **Copper**: Exempted from the current reciprocal tariff, but there is a possibility of future tariff increases. The price is expected to fluctuate at a high level in Q2, with the trading range estimated at 77,000 - 81,000 RMB [8]. - **Aluminum**: A 25% tariff on imported aluminum has been in effect since March 12. The tariff will be borne by U.S. end - customers, and its impact on China is relatively low [9]. - **Gold**: Exempted from the reciprocal tariff. The gold price is strong, but liquidity risks should be watched out for if U.S. stocks fall continuously. The gold price may fluctuate more due to the development of the trade war [11]. 3.2.2 Energy - **Crude Oil**: The reciprocal tariff policy will not directly affect the trade flow of oil and gas commodities. However, it may increase global economic growth pressure and thus reduce oil demand. The market is concerned about whether the EU and South Korea will impose tariffs on U.S. crude oil imports as counter - measures [12][14]. - **Fuel Oil and Low - Sulfur Fuel Oil**: The overall trend of fuel - related products follows that of crude oil. The demand growth rate of marine fuel may decline due to the trade war, and the negative impact will be more concentrated on the low - sulfur fuel oil market [15]. - **Natural Gas**: The direct impact of the tariff on natural gas is small. Attention should be paid to Canada's potential counter - measures on natural gas exports to the U.S., China's resale of U.S. long - term contract LNG, and the impact on European gas prices [16]. - **LPG**: The U.S. is a net exporter of LPG. China may be cautious in imposing counter - tariffs on U.S. LPG. If counter - tariffs are imposed, the price of LPG will rise significantly, and domestic chemical demand will shrink [17]. 3.2.3 Chemicals - **Overall Impact**: The reciprocal tariff will drag down the cost of chemical products due to the decline in crude oil prices and have a great impact on exports. The overall impact on China and Southeast Asian emerging manufacturing countries is negative [19]. - **Specific Chemical Products** - **Textile and Clothing - related (PTA, Short - fiber)**: The reciprocal tariff will directly affect China's textile and clothing exports to the U.S. and also affect the export of polyester filaments to emerging manufacturing countries, dragging down the export of the polyester and textile - clothing industries [20]. - **Plastic Products**: The tariff increase will lead to higher costs for plastic product enterprises, reduce export speed, and affect raw material demand. The overall impact is negative [21]. - **Home Appliances (Styrene)**: The reciprocal tariff may drag down the demand for styrene in China. The impact on directly and indirectly exported chemical products is negative, but the final impact depends on the negotiation results between countries and the U.S. [22]. 3.2.4 Black Metals - **Steel**: China's steel exports to the U.S. are relatively low, but the indirect impact on steel exports is large, which will put pressure on steel prices, especially hot - rolled coils. The market should pay attention to tariff policies, domestic demand recovery, and macro - hedging policies [23][24][25]. 3.2.5 Agricultural Products - **Corn**: The U.S. tariff policy mainly affects the major export destinations of U.S. corn. It has little impact on China's domestic corn price, and domestic corn prices should focus on their own supply - demand situation [26]. - **Soybeans**: China's soybean imports are mainly from South America in Q2 and Q3, so the impact of tariffs on the supply chain in these two quarters is small. Attention should be paid to the supply and procurement rhythm in Q4. The demand for U.S. soybean oil is expected to be good [27]. - **Palm Oil**: The U.S. tariff increase on Indonesia and Malaysia will be unfavorable for their palm oil exports in the short term, but the long - term supply - demand outlook is still strong [28]. - **Canola**: The U.S. reciprocal tariff list does not include Canada (except for steel, aluminum, and automobiles). The trade relationship between the U.S. and Canada in canola oil is highly dependent, and the continuation of trade conflicts will be a loss for both sides [29]. - **Soft Commodities** - **Cotton**: The U.S. tariff increase on China will further reduce China's textile and clothing export competitiveness, and domestic cotton consumption may be negatively affected, with short - term Zhengzhou cotton prices likely to be weak [30]. - **Rubber**: The tariff increase will reduce China's tire export market share in the U.S., have a negative impact on rubber consumption, and drive down domestic rubber futures prices [31].

Investment Rating - The industry investment rating is "Overweight," indicating that the growth level of the industry is expected to exceed that of the CSI 300 index in the next six months [25]. Core Insights - The government has set a GDP growth target of around 5% for 2025, maintaining a balance between short-term stability and long-term transformation, reflecting a pragmatic yet challenging policy stance [1]. - The fiscal deficit is projected at 5.66 trillion yuan, with a deficit rate of around 4%, marking a historical high for the two sessions, which aligns with the direction of a more proactive fiscal policy [2]. - The issuance of special bonds and local government bonds is expected to reach 6.2 trillion yuan this year, significantly higher than the previous year's total of 4.9 trillion yuan, indicating an increase in effective fiscal spending [3]. - The monetary policy is characterized as "moderately loose," with expectations for potential reductions in reserve requirements and interest rates throughout the year [4]. - CPI is projected to show a "high-low-high" trend throughout the year, with an expected year-end CPI increase of around 1.2% [12]. - PPI is anticipated to narrow its decline throughout the year, with a forecasted annual decrease of -1.2% [14]. Summary by Sections Macroeconomic Policy - The government work report emphasizes a combination of "expansive fiscal and monetary policies" to stabilize growth expectations [1][4]. - The fiscal policy aims to enhance domestic demand through increased public spending and special bond issuance [2][3]. Inflation and Price Trends - February 2025 CPI showed a year-on-year decrease of -0.7%, with core CPI also negative for the first time since January 2021 [11]. - The CPI is expected to rise later in the year due to strong growth policies and increased consumer spending [12]. Trade and Export Performance - Exports in the first two months of 2025 increased by 2.3% year-on-year, while imports decreased by 8.4%, indicating a mixed trade environment [15]. - The impact of U.S. tariffs on exports has not yet fully materialized, suggesting resilience in certain sectors [17]. Market Performance - The REITs market experienced a limited rebound, with the CSI REITs index up by 1.14% [18]. - Market liquidity has decreased, with average daily trading volume dropping to 787 million yuan [19].