Unadorned Notes: April 17-20, 2025
U.S. Jobs Steady, Housing Falls; Global Markets Confront Trade Fallout; Trump Threatens to Remove Powell; U.S. Targets Chinese Shipping; Xi Promotes China in Southeast Asia
Economics, Finance, and Business
U.S. Jobs Steady, Housing Falls: Initial jobless claims in the United States fell to 215,000 for the week ending April 12, 2025, marking a two-month low and indicating ongoing labor market resilience despite economic headwinds. Economists note that while layoffs remain subdued, businesses are increasingly hesitant to expand hiring due to tariff uncertainty and policy unpredictability. Single-family housing starts dropped 14.2% in March 2025 to an annualized rate of 940,000 units, the lowest level since July 2024, with builders citing higher material costs linked to tariffs. The National Association of Home Builders reported that average costs per home have increased by $10,900 due to import duties, exacerbating weak demand and elevated inventory. Broader economic growth is projected to have slowed significantly in the first quarter, with concerns mounting that reduced construction activity and tightening financial conditions could further dampen momentum.1
Global Markets Confront Trade Fallout: Global financial markets are adjusting to intensified U.S.–China trade tensions, with some U.S. tariffs on Chinese imports exceeding 200%, prompting expectations of monetary easing by the People’s Bank of China. Major U.S. firms, including Tesla and Alphabet, will report earnings this week, offering insights into the business impact of tariffs and inflation. April 2025 flash Purchasing Managers’ Index data are expected to show rising input costs, highlighting early signs of inflationary pressure. The IMF and World Bank Spring Meetings in Washington are taking place amid heightened concern over U.S. trade policy risks. While U.S. equities have partially rebounded, investor sentiment remains cautious, with notable outflows from American assets and persistent dollar weakness.2
Court Rules Google Ad Monopoly: A U.S. federal court ruled that Google illegally monopolized the digital advertising market for web publishers, marking a significant regulatory setback for the company. Judge Leonie Brinkema found that Google used anticompetitive practices to tie its publisher ad server and ad exchange products, violating antitrust law. The ruling follows a series of legal defeats for Google, which also faces separate federal and international antitrust cases. Remedies are now under consideration, with the Justice Department signaling intent to seek divestiture of key parts of Google’s advertising business. The judgment heightens pressure on Google’s $8 billion quarterly display ad unit and underscores growing momentum for antitrust enforcement against major technology firms.3
Fed Approves Capital One Merger: The Federal Reserve and the Office of the Comptroller of the Currency approved Capital One Financial’s $35.3 billion all-stock acquisition of Discover Financial Services. The merger, announced in February 2024, includes the acquisition of Discover Bank and offers Discover shareholders a 26% premium in Capital One stock. Regulators evaluated the transaction based on statutory criteria, including financial stability, competition, and community impact. As part of the approval, Capital One must address outstanding regulatory issues tied to Discover, including a $100 million Federal Reserve fine for overcharging interchange fees. The combined entity is expected to close the deal by May 18, 2025, with Capital One shareholders owning 60% and Discover shareholders 40%.4
U.S. Politics, Policies, and Geopolitics
Trump Threatens to Remove Powell: President Donald Trump has intensified criticism of Federal Reserve Chair Jerome Powell, publicly suggesting he could remove him from office despite legal limitations on such action. The Supreme Court’s 1935 ruling restricts presidents from firing independent agency leaders without cause, and Powell has affirmed he would not resign if asked. Trump’s remarks followed Powell’s warning that current trade policies may lead to stagflation and his decision to keep interest rates steady. Reports indicate Trump has discussed replacing Powell with former Fed governor Kevin Warsh, though Warsh has advised against premature dismissal. Legal experts and economists have cautioned that removing Powell would not necessarily alter monetary policy, which is determined by the Federal Open Market Committee.5
QZ’s Comment: Trump doesn’t need to fire Powell. He needs Powell to fear it just enough to act differently, and he needs markets and institutions to internalize that the Fed is not above politics. Including Kevin Warsh in the conversation isn’t a random move—he’s a former Fed governor, an inflation dove, and a market-friend Trump-aligned technocrat.
Supreme Court Halts Deportations Temporarily: The U.S. Supreme Court issued an emergency order temporarily blocking the Trump administration from deporting a group of Venezuelan migrants under the 1798 Alien Enemies Act, a wartime law rarely used in modern times. The stay followed a request from the American Civil Liberties Union, which argued that the migrants were denied sufficient notice and access to judicial review, as required under prior Court rulings. The administration maintains that it lawfully notified detainees and urged the Court to lift the stay or clarify that other legal grounds for deportation remain available. The migrants, accused of gang affiliation, were reportedly en route to deportation before the order was issued, and some were allegedly returned following a last-minute halt. The case underscores rising tensions over executive power in immigration enforcement and the role of the judiciary in safeguarding due process rights.6
Trump Threatens Pause in Ukraine Talks: President Donald Trump warned that the United States would suspend efforts to mediate a resolution to the war in Ukraine if negotiations do not show progress soon. U.S. officials, including Secretary of State Marco Rubio and special envoy Steve Witkoff, have met with Ukrainian and European representatives to discuss a possible cease-fire, though Russia has rejected terms so far. While Trump has sent envoys to Moscow, Ukrainian officials remain concerned over the lack of direct engagement and absence of firm U.S. security guarantees. Separately, Ukraine and the U.S. signed a memorandum to pursue a reconstruction investment fund, though tensions persist over a draft economic deal granting the U.S. significant control over Ukrainian resources. Trump stated the minerals agreement would be signed soon, while both sides continue technical negotiations.7
Ukraine Sanctions Chinese Firms: Ukraine imposed sanctions on three Chinese companies following allegations by Ukrainian President Volodymyr Zelenskyy that China is supplying weapons to Russia. The targeted entities include Beijing Aviation And Aerospace Xianghui Technology Co. Ltd and two manufacturers of industrial components. The sanctions freeze any Ukrainian assets and prohibit business activity with the firms. China has denied providing military support to Russia and reiterated its call for a ceasefire and peace negotiations. Relations between Kyiv and Beijing have deteriorated amid Ukraine’s accusations of Chinese interference in peace initiatives and reports of Chinese nationals fighting for Russia.8
U.S. Accuses China of Supporting Houthis: The U.S. State Department accused Chinese company Chang Guang Satellite Technology of directly supporting Houthi attacks on American and allied interests in the Red Sea. According to U.S. officials, the firm supplied satellite imagery used by Iran-backed Houthi forces to target U.S. naval vessels and commercial shipping. State Department spokesperson Tammy Bruce called the assistance “unacceptable” and criticized China’s broader support for adversarial regimes. The accusation comes amid heightened U.S.-China tensions and ongoing Houthi missile and drone attacks, which have escalated since President Donald Trump launched retaliatory strikes last month.9
Trump Revives COVID Lab Theory: The Trump administration launched a new White House webpage promoting the lab-leak theory of COVID-19’s origins, accusing U.S. public health officials and intelligence agencies of suppressing alternative narratives. The move follows a declassified CIA report concluding with “low confidence” that the virus likely originated from a Wuhan research lab, while acknowledging natural origin remains plausible. The site criticizes figures including Dr. Anthony Fauci and organizations such as the NIH, WHO, and EcoHealth Alliance for allegedly obstructing investigations and misusing public funds. Ongoing congressional inquiries and a Department of Justice probe into EcoHealth’s activities signal continued scrutiny of U.S. involvement in overseas research.10
U.S. Targets Chinese Shipping: The United States announced new levies on Chinese-built and owned vessels docking at American ports, escalating trade tensions with China. Under the plan, ships will be charged $50 per net ton beginning in six months, with phased increases and additional restrictions on foreign-built LNG carriers to follow. The move comes amid China’s effective suspension of U.S. liquefied natural gas (LNG) imports, following tariff hikes that have rendered American LNG economically unviable in Chinese markets. President Donald Trump stated he remains open to negotiation but emphasized the need for a balanced approach to avoid stalling global trade. In response, China is reportedly boosting LNG imports from Russia, further shifting global energy trade flows.11
Xi Promotes China in Southeast Asia: Chinese leader Xi Jinping concluded a three-nation Southeast Asia tour in Cambodia, promoting China as a stable economic partner amid U.S. tariff threats. The visit coincided with rising regional concerns over new U.S. levies that would impose steep reciprocal tariffs on exports from countries like Cambodia, Vietnam, and Malaysia. In Cambodia, Xi oversaw the signing of 37 cooperation agreements and reaffirmed strong bilateral ties, including China’s continued role as Cambodia’s top trading partner and investor. The trip also highlighted China’s development aid, clean energy collaboration, and defense cooperation, contrasting with recent cuts in U.S. foreign assistance. Although concerns persist over the Chinese-funded expansion of Cambodia’s Ream Naval Base, the government maintains it remains open to all foreign navies.12
QZ’s Comment: Vietnam, Malaysia, Indonesia, the Philippines, etc. will all accept Chinese gifts, investments, and summits. But they will also sign U.S. defense agreements, invite U.S. firms, and join U.S.-aligned trade pacts. China is the only one that must offer more, promise more, and restrain more to try to convince them not to tilt too far toward the U.S.-led order that is increasingly leaving China alone. So these countries are essentially monetizing China’s anxiety.