Key Points

• China’s July Trade Beats Forecasts: Exports rose 7.2% YoY, outperforming expectations, though U.S.-bound shipments continued to fall ahead of the August 12 tariff truce deadline.
• Trump’s 100% Chip Tariff: The new tariff hit Japanese chipmakers while benefiting TSMC and Samsung, emphasizing a shift toward U.S.-based semiconductor production.
• Asia-Pacific Markets Rise: Despite tariff tensions, major indices advanced with Japan’s Topix reaching a record high and oil prices climbing amid protectionist signals.
• Gold Prices Increase: Investors moved to safe-haven assets like gold amid rising trade tensions and heightened expectations for a September Fed rate cut.

China’s July Trade Beats Forecasts as Tariff Truce Nears Expiry

China’s exports rose 7.2% in July year-over-year, significantly outperforming expectations of 5.4%, while imports climbed 4.1%, marking their strongest growth since July 2024. The positive trade data comes as Beijing and Washington continue negotiations to extend a fragile tariff truce set to expire on August 12. While exports to the U.S. fell sharply—down 21.7%—China offset losses through increased shipments to Southeast Asia and the EU. Rare earth and semiconductor exports surged, as did imports of crude oil and soybeans. However, with factory activity slipping and Trump threatening steep new tariffs, the export momentum faces potential headwinds.

Trump’s 100% Chip Tariff Jolts Japanese Tech; Samsung and TSMC Gain on U.S. Manufacturing Edge

Asian semiconductor stocks saw mixed reactions Thursday after President Trump announced a sweeping 100% tariff on chip imports, exempting companies manufacturing in the U.S. Japanese chipmakers Tokyo Electron and Renesas dropped sharply, while South Korea’s Samsung and SK Hynix gained amid reported exemptions. TSMC also rose over 4% on its $165 billion U.S. investment commitment. Apple confirmed it will source chips from Samsung’s Texas plant, boosting confidence in U.S.-based production. Despite policy uncertainty, analysts suggest major firms with deep U.S. ties—like Apple, Nvidia, and TSMC—stand to benefit, while smaller players may struggle to adapt to the tariff framework.

Asia-Pacific Markets Close Higher as Investors Digest Trump’s Chip Tariff Plan

Asia-Pacific equities ended mostly higher on Thursday despite heightened trade tensions, as investors weighed President Trump’s proposed 100% tariffs on semiconductor imports, with exemptions for U.S.-based manufacturers. Japan’s Nikkei 225 climbed 0.65%, while Taiwan’s tech-heavy index gained over 2%, supported by optimism around local chipmakers with U.S. operations. South Korea’s Kospi also advanced nearly 1%. However, Indian markets slipped after Trump doubled tariffs to 50% on key imports. Crude prices rose, with Brent and WTI both gaining over 1%, driven by renewed trade protectionism concerns. Despite geopolitical headwinds, China’s export data offered a positive macro backdrop, exceeding expectations at 7.2% growth.

Gold Edges Higher as Tariff Uncertainty and Rate Cut Hopes Boost Safe-Haven Demand

Gold prices ticked higher on Thursday, supported by renewed safe-haven demand amid escalating U.S. trade tensions and growing expectations of a Fed rate cut. Spot Gold rose 0.1% to $3,373.80/oz, while December Futures advanced 0.4% to $3,447.90/oz. Investor sentiment shifted after President Trump threatened 100% tariffs on imported semiconductors and doubled levies on Indian goods, fueling inflation fears and supply chain concerns. Simultaneously, weak U.S. services data and last week’s soft jobs report bolstered bets on a September rate cut, now priced in at 95%. Precious and industrial metals broadly gained on supportive Chinese export data and macro signals.

Conclusion

This week’s market dynamics were driven by renewed trade tensions and shifting monetary expectations. China’s stronger-than-expected trade data highlighted resilience in the face of escalating U.S. tariffs, while Trump’s sweeping 100% semiconductor duties triggered sectoral divergence—pressuring Japan while boosting U.S.-aligned chipmakers. Broader Asia-Pacific markets remained buoyant, bolstered by tech optimism and oil gains. Meanwhile, rising safe-haven demand pushed gold higher, as weak U.S. data sharpened expectations of a Fed rate cut in September. Investors should remain attentive to evolving trade policy developments and macro signals, which continue to shape asset flows and sector performance across global markets.

Investment Insights

China’s stronger-than-expected July exports indicate resilient global demand despite looming U.S. tariff deadlines; investors may monitor trade-sensitive sectors and logistics plays in Asia. Trump’s 100% semiconductor tariffs create near-term volatility for non-U.S. chipmakers but reinforce the long-term bullish case for U.S.-based manufacturing and vertically integrated tech giants. Asia-Pacific equities’ muted reaction to tariff escalation suggests investor focus is shifting toward regional resilience and domestic policy buffers, particularly in Japan and South Korea. Gold’s modest rally and rising rate cut bets signal growing defensive positioning; investors may consider increased allocation to precious metals and inflation-hedged assets.

Economic Calendar

Date	Event	Why It Matters
Aug 12, 2025	U.S.–China Tariff Truce Expiry	Decision deadline that could renew tariff escalation or reset trade relations
Aug 12, 2025	U.S. CPI (July)	Key inflation metric influencing Fed’s interest rate path
Aug 15, 2025	U.S. Retail Sales (July)	Indicator of consumer resilience and economic momentum
Aug 21, 2025	FOMC Minutes (July Meeting)	Offers deeper insight into Fed’s inflation outlook and rate cut timing

Disclaimer: This newsletter provides financial insights for informational purposes only. It does not constitute financial advice or recommendations for investment decisions.