China struggles with shift to domestic demand, impacted by tariffs; US economy affected negatively.

From Yahoo Finance: 2025-05-19 00:32:00

Asia experienced a down day due to a miss on China retail sales, highlighting the country’s struggle to shift from an export-driven to a domestic demand-driven economy. President Trump pressures Chinese consumers indirectly through trade policies, while U.S. Treasury Secretary warns trade partners to offer “good faith” deals or face tariffs. U.S. import tariffs remain at 13%, impacting GDP and potentially leading to price-setting reminiscent of a command-control economy.

Tariffs are used by Trump to fund his tax cut package, recently approved by a House committee. The bill may add $3-5 trillion to national debt over a decade, prompting Moody’s to downgrade the U.S. Foreign investors react negatively, reflecting uncertainty in U.S. policy-making. Wall Street futures are down 1%, ten-year yields are up, and the dollar is slightly lower. Euro bulls find relief in pro-EU wins in Romanian, Polish, and Portuguese elections.

Key market influences on Monday include EU final CPI data for April and speeches from Fed speakers including Raphael Bostic, Philip Jefferson, John Williams, Lorie Logan, and Neel Kashkari.



Read more at Yahoo Finance: So, China should consume more and the US less?