Investing.com - U.S. President Donald Trump could introduce less severe tariffs than initially expected at a crucial announcement next week, media reports suggest. Elsewhere, investors will be keeping tabs on a raft of economic data that could provide more insight into how businesses and consumers are reacting to Trump's proposed levies. Canadian Prime Minister Mark Carney calls a snap election for next month, and U.S. officials hold fresh talks aimed at securing a ceasefire in the war in Ukraine.
1. Trump’s April 2 tariffs announcement could be more targeted - Bloomberg News
Bolstering sentiment on Monday was a weekend report from Bloomberg News that Trump could unveil tariffs at an April 2 "Liberation Day" announcement that are more targeted than he has previously threatened.
Trump has said in prior weeks that he would roll out sprawling tariffs on both friends and foes alike in response to perceived trade imbalances. But Trump’s announcement -- while still a significant expansion of his aggressive approach to international trade -- may exclude some nations or blocs, the Bloomberg report said, citing aides and allies to the president.
Tariffs on specific sectors, another possible measure floated by Trump, will also likely not be revealed at the event, Bloomberg said.
However, Trump is planning to announce tariff rates that are due to come into effect immediately, likely provoking retaliatory countermeasures from some countries, the report said. Those countries who do not impose tariffs on the U.S. and with whom the U.S. has a trade surplus may be exempted from the reciprocal levies, Bloomberg added.
"Targeted is obviously better than the alternative, but the trade changes being envisioned are still substantial, and it’s likely they will have negative effects on the economy and corporate profits, at least in the near and medium term," analysts at Vital Knowledge said in a note to clients.
2. PMIs ahead
On the economic calendar, markets will be keeping an eye on the latest measure of U.S. business activity after the figure almost stalled in the prior month.
The preliminary S&P Global (NYSE:SPGI) Composite purchasing managers’ index, a tracker of the manufacturing and services sectors, on Monday is seen edging down to 51.5 in March. A reading above 50 denotes expansion.
In February, the measure came in at 51.6. The flash gauge initially came in at 50.4, marking a 17-month low and adding to a series of data points that were suggesting that businesses and consumers were becoming increasingly concerned about the impact of Trump’s tariff plans.
Meanwhile, investors are awaiting the release later in the week of the personal consumption expenditures price index, an inflation metric closely followed by Federal Reserve policymakers.
Last week, the central bank left interest rates unchanged and presented an outlook for the economy that included higher inflation and cooling economic growth. Still, Fed Chair Jerome Powell described the U.S. economy as "strong overall" despite some moderation in consumer spending.
3. Canadian snap election called
Canadian Prime Minister Mark Carney has called a snap election for April 28, arguing that the country’s leader needs a strong mandate to take on threats from Trump.
Tensions between Canada and its neighbor to the south have risen since Trump’s return to the White House earlier this year. Trump has delayed a broad 25% tariff on Canada, imposed separate levies on steel and aluminum, and threatened reciprocal duties on items like dairy and lumber -- all while suggesting that the U.S. could eventual annex the country as its "51st state."
The actions and comments have stoked retaliatory trade measures from Ottawa and demands that Washington treat its traditional ally with respect. Economists have warned, however, that heavy tariffs could damage a Canadian economy that is heavily reliant on exports to the U.S.
Carney became Prime Minister on March 14 after winning a Liberal Party vote to replace former leader Justin Trudeau. Carney, a former central banker, has said he would strive to work with Trump, but on Sunday called Trump’s tariffs and rhetoric the "most significant crisis of our lifetimes."
4. Ukraine ceasefire talks
Officials from the U.S. and Russia kicked off talks in Saudi Arabia on Monday focused on making progress on a possible ceasefire in the war in Ukraine.
The White House has said that the negotiations with Russia are specficially aiming to reach a deal to bring about a maritime ceasefire in the Black Sea that would clear the path for shipping flows in the region, Reuters reported.
Representatives from the Trump administration spoke separately with Ukraine over the weekend, as Washington pushes to secure an end to the three-year-old conflict. Trump spoke with Ukrainian President Volodymyr Zelenskiy and Russian President Vladimir Putin last week.
Although Trump and his advisors have expressed optimism that a deal could soon be reached, officials from some European countries remain skeptical that Putin will eventually back down from what they see as maximalist demands.
5. Global CEOs to meet with Xi - report
Chief executives from a range of companies are reportedly due to attend a business forum in China this week and possibly meet with Chinese President Xi Jinping.
Apple (NASDAQ:AAPL) CEO Tim Cook, Cristiano Amon of Qualcomm (NASDAQ:QCOM), AstraZeneca (NASDAQ:AZN)'s Pascal Soriot, and Amin Nasser of Saudi Aramco (TADAWUL:2222) are all attending the China Development Forum on Sunday and Monday, Reuters reported, citing unnamed sources. Some are anticipated to meet with Xi on Friday, the news agency added.
On Sunday, Chinese Premier Li Qiang said countries should keep their markets open to help counter the threat of "rising instability," according to state media.
The comments come as China faces increased U.S. tariffs and threats of a further uptick in levies, exacerbating fears over an escalating global trade war. In a bid to offset potential trade headwinds, China has moved to court foreign investment and roll out measures designed to stimulate domestic consumption.
(Reuters contributed reporting.)
