Bloomberg Daybreak: Asia Edition US-China Trade Truce Hopes; Monetary Policy in Focus
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Aug 6, 2025 
Vishnu Varathan, Head of Economics and Strategy at Mizuho Bank, dives into the evolving landscape of US-China trade relations. He examines President Trump’s upcoming tariffs on semiconductors and pharmaceuticals and discusses the potential for a trade truce with China. Varathan also highlights investor anxieties over the Federal Reserve's monetary policy, especially amid recent weak economic data. With a keen focus on market dynamics, he sheds light on the implications of tariffs and the importance of international collaboration in innovation.
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Impact of New Sectoral Tariffs
- Trump's new tariffs on pharmaceuticals and semiconductors could reach very high rates, disrupting industries.
- Sectoral tariffs from Commerce investigations are harder to roll back than country-by-country tariffs.
Extending US-China Trade Truce
- The U.S. and China are likely to extend their trade truce beyond the August 12th deadline.
- A potential Trump-Xi meeting at the APEC summit could influence further agreements.
India Caught in US Tariff Strategy
- The U.S. imposed a 25% tariff on India partly due to India's import of Russian oil.
- India faces collateral damage from U.S. efforts to pressure Russia over Ukraine.