Vast flows of trade between the world’s two largest economies are at stake after President Donald Trump hiked tariffs on China this month, making it difficult for some Chinese businesses to continue trading with the US. In response, Beijing has also slapped massive tariffs on American imports.
What’s the latest? A major shipping loophole expired at one minute past midnight.
The de minimis exemption allowed shipments of goods worth $800 or less to come into the US duty-free, often more or less skipping time-consuming inspections and paperwork.
The loophole allowed ultra-low-cost Chinese e-commerce sites like Shein, Temu and AliExpress to pour everything from yarn to patio furniture, clothes to photography equipment and more into US homes.
What now? A baseline tariff as high as 145%, depending on the carrier, is set to take effect on Chinese imports, potentially more than doubling the cost of all those cheap products that deal-hungry Americans have scooped up.
Inching toward trade deals: China says it is “currently assessing” proposals by the US to begin trade talks, in a tone shift that could open the door for negotiations.
A spokesperson for China’s Commerce Ministry said “the US has recently sent multiple messages to China through relevant parties, hoping to start talks with China. China is currently evaluating this.”
US Secretary of State Marco Rubio said Beijing was eager to talk. “The Chinese are reaching out, they want to meet, they want to talk,” he told Fox News.
The European Union’s trade commissioner, Maroš Šefčovič, told the Financial Times that the bloc is making “certain progress” toward a trade deal with the US, which would involve buying 50 billion euros more of US products.
But Financial Times reported that Šefčovič suggested the Trump administration would need to abandon its 10% across-the-board tariffs on European goods as a precursor to any trade arrangement.
Apple hit hard: Tariffs could add $900 million to Apple’s costs in its fiscal third quarter, Apple CEO Tim Cook said yesterday.
Most of Apple’s iPhone supply chain is based in China. The Trump administration said last month that smartphones are exempt from reciprocal tariffs on Chinese imports, which would have brought the total tariff rate on iPhones made in the region to at least 145%. Instead, smartphones face a minimum 20% tariff.
Apple has shifted some iPhone production to India, and Cook said he expects “the majority of iPhones sold in the US will have India as their country of origin.”