logo
US weighs plan to slash China tariffs to as low as 50 per cent

US weighs plan to slash China tariffs to as low as 50 per cent

Sky News AU09-05-2025

The Trump administration is weighing a plan to slash the 145% tariff on Chinese imports by more than half — effective as soon as next week — as top US and China officials head to Switzerland for high-level trade negotiations, The Post has learned.
Specifically, US officials are discussing a proposal to lower President Trump's punishing levy on China goods to between 50% and 54% as they begin what promise to be lengthy talks to hammer out a trade agreement, sources close to the negotiations said.
Meanwhile, trade taxes on neighboring south Asian countries would be cut to 25%, the source added.
'They are going to be bringing it down to 50% while the negotiations are ongoing,' the source said of the trade tax on China.
The trade tax reduction is being eyed as Trump on Thursday said China tariffs 'can only come down' as he unveiled a a trade deal with the UK in the Oval Office.
'It's at 145 so we know it's coming down,' Trump told reporters. 'I think we're going to have a very good relationship.'
Insiders said the 50%-to-54% range — down from the triple-digit level that Treasury Secretary Scott Bessent said this week 'isn't sustainable' this week — is in keeping with rates that were discussed last month when President Trump met with the bosses of the three biggest retailers in the US.
The CEOs – Doug McMillon of Walmart, Brian Cornell of Target and Ted Decker of Home Depot – all said the April 21 meeting at the White House was 'productive' and 'constructive' without offering details, according to reports.
In response, a 'whisper' campaign spread quickly and 'the number that emerged to get the ships flowing out of China was 54%,' said Jay Foreman, CEO of Basic Fun, which makes its retro toys in China including Tonka Trucks, Care Bears and My Little Pony.
'The signals we are getting is that the dam will break by the end of this week or next, that there will be an adjustment,' Foreman told The Post.
Accordingly, many retailers already have begun asking vendors to quote prices based on a range of tariff rates — anywhere between 10% and 54% — 'so they are ready to price when the goods land' in the US, Foreman added.
White House spokesman Kush Desai told The Post in a statement, 'When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation.'
Nevertheless, 'CEOs felt very reassured after Bessent's remarks at Milken,' a source told The Post, referring to the Treasury secretary's 'sustainable' comment at the Milken Institute Global Conference in Los Angeles this week. 'People are realizing that deals are going to be made.'
Treasury's phone has been 'blowing up' with southeast Asian nations looking to seal a deal, the source added.
The chatter in retail circles has likewise been traveling fast — and is very specific, industry sources told The Post.
'We are hearing China at 50% to 54% and [other] Asian countries at 25%,' said Lawrence Rosen, chairman of Cra-Z- Art, a New Jersey-based arts-and-crafts distributor.
Another toy CEO, Nick Mowbray of Zuru – maker of Bunch O Balloons – said 'The speculation is 54%,' but he added, 'That's definitely not been told explicitly to retail yet.'
While sharply lower than what's currently in effect, a 50% trade tax would pose a formidable challenge as retailers prepare for the crucial holiday season, sparking drastically higher prices at stores, retail executives said.
A Tonka Mighty Dump Truck priced at $29.99 this week would cost $49.99 with a 54% tariff. While steep, that's 'workable,' according to Forman. A 145% levy, on the other hand, would translate to a $79.99 Tonka truck, which is 'just too much' and would bring sales to a virtual standstill, he said.
Noel Hacegaba, chief operating officer of the Port of Long Beach in California, said 'there are high hopes that the meeting between the US and China in Switzerland will help to de-escalate growing trade tensions and set a path forward for resolving the trade war.'
He added, however, 'it will take a strong signal coming out of the meeting for shippers to readjust their sourcing and routing.'
The toy industry is in crosshairs of the tariff wars as 80% of toys sold in the US are made in China.
Basic Fun has 35 containers on the water that are expected to arrive in the US this week and next, but seven of them were sent on April 10 when the 145% levy became effective.
Foreman plans to store those containers in a warehouse because his company can't afford the higher levy. The rest of his toys are being stored at warehouses and at his factories in China – until he gives the word to ship them here.
'The retailers behavior changed after the White House meeting as if they got some confidence,' said retail guru Gerald Storch, a former CEO of Toys R Us and Canadian based department store company HBC.
'They are less panicked about how quickly they need a domestic source and they seemed to relax a little bit,' Storch told The Post. 'This is what I've heard from vendors about the retailers' tone and sense of urgency.'
Originally published as US weighs plan to slash China tariffs to as low as 50 per cent - down from 145 per cent - as soon as next week: sources

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Wall St dips as Middle East tensions rise, Boeing drops
Wall St dips as Middle East tensions rise, Boeing drops

Perth Now

time26 minutes ago

  • Perth Now

Wall St dips as Middle East tensions rise, Boeing drops

Wall Street's main indexes have slipped as signs of rising tensions in the Middle East hurt risk sentiment and investors sought more clarity on Washington's recent trade deals with China. Boeing declined 4.7 per cent after an Air India 787-8 Dreamliner jet crashed minutes after taking off in India's western city of Ahmedabad, killing more than 200 people. Underscoring increased volatility in the Middle East, President Donald Trump said on Wednesday US personnel were being moved out of the region as it could be a "dangerous place" and the United States would not allow Iran to have a nuclear weapon. "The clearing out of our embassies in the Middle East of non-essential employees sends a signal that we're anticipating some turbulent times," said Kim Forrest, chief investment officer at Bokeh Capital Partners. A senior Iranian official said on Wednesday Tehran will strike US bases in the region if nuclear negotiations fail and conflict arises. China on Thursday affirmed a trade deal with the US, saying both sides needed to abide by the consensus. Traders are still waiting for more details on the trade framework discussed. In early trading on Thursday, the Dow Jones Industrial Average fell 140.49 points, or 0.33 per cent, to 42,725.28, the S&P 500 lost 5.58 points, or 0.09 per cent, to 6,017.36 and the Nasdaq Composite lost 39.52 points, or 0.20 per cent, to 19,576.35. Five of the 11 major S&P 500 sub-sectors fell. Communication services dropped the most, with an about 0.7 per cent decline, while utilities gained 0.8 per cent. Alphabet declined 1.1 per cent, while Nvidia nudged 0.3 per cent higher. Among other movers, Oracle shares rose 12.1 per cent after the cloud service provider raised its annual revenue growth forecast. US-listed shares of gold miners also advanced, as bullion prices hit a one-week high. Newmont gained 2.4 per cent, Harmony Gold was up 2.1 per cent and AngloGold Ashanti rose 5.2 per cent. After a tame consumer price report on Wednesday, softer-than-expected producer price data and largely unchanged initial jobless claims helped reduce investor jitters around tariff-driven price pressures. Traders are pricing in 53.7 basis points of rate cuts by year-end, per data compiled by LSEG. They are penciling in a 60 per cent chance of a 25 bps cut in September, according to the CME Group's FedWatch tool. Policymakers are widely expected to keep rates unchanged next week. With investors increasingly expecting Trump to reach favourable trade agreements with several countries in the coming weeks, the benchmark S&P 500 index is just 2.1 per cent below its record high touched in February. The tech-heavy Nasdaq is about 2.9 per cent from record levels hit in December. Goldman Sachs trimmed its US recession probability to 30 per cent from 35 per cent on easing uncertainty around Trump's tariff policies. Declining issues outnumbered advancers by a 1.35-to-1 ratio on the NYSE and by a 2.03-to-1 ratio on the Nasdaq. The S&P 500 posted four new 52-week highs and three new lows while the Nasdaq Composite recorded 24 new highs and 39 new lows.

Wall St dips as Middle East tensions rise, Boeing drops
Wall St dips as Middle East tensions rise, Boeing drops

West Australian

time29 minutes ago

  • West Australian

Wall St dips as Middle East tensions rise, Boeing drops

Wall Street's main indexes have slipped as signs of rising tensions in the Middle East hurt risk sentiment and investors sought more clarity on Washington's recent trade deals with China. Boeing declined 4.7 per cent after an Air India 787-8 Dreamliner jet crashed minutes after taking off in India's western city of Ahmedabad, killing more than 200 people. Underscoring increased volatility in the Middle East, President Donald Trump said on Wednesday US personnel were being moved out of the region as it could be a "dangerous place" and the United States would not allow Iran to have a nuclear weapon. "The clearing out of our embassies in the Middle East of non-essential employees sends a signal that we're anticipating some turbulent times," said Kim Forrest, chief investment officer at Bokeh Capital Partners. A senior Iranian official said on Wednesday Tehran will strike US bases in the region if nuclear negotiations fail and conflict arises. China on Thursday affirmed a trade deal with the US, saying both sides needed to abide by the consensus. Traders are still waiting for more details on the trade framework discussed. In early trading on Thursday, the Dow Jones Industrial Average fell 140.49 points, or 0.33 per cent, to 42,725.28, the S&P 500 lost 5.58 points, or 0.09 per cent, to 6,017.36 and the Nasdaq Composite lost 39.52 points, or 0.20 per cent, to 19,576.35. Five of the 11 major S&P 500 sub-sectors fell. Communication services dropped the most, with an about 0.7 per cent decline, while utilities gained 0.8 per cent. Alphabet declined 1.1 per cent, while Nvidia nudged 0.3 per cent higher. Among other movers, Oracle shares rose 12.1 per cent after the cloud service provider raised its annual revenue growth forecast. US-listed shares of gold miners also advanced, as bullion prices hit a one-week high. Newmont gained 2.4 per cent, Harmony Gold was up 2.1 per cent and AngloGold Ashanti rose 5.2 per cent. After a tame consumer price report on Wednesday, softer-than-expected producer price data and largely unchanged initial jobless claims helped reduce investor jitters around tariff-driven price pressures. Traders are pricing in 53.7 basis points of rate cuts by year-end, per data compiled by LSEG. They are penciling in a 60 per cent chance of a 25 bps cut in September, according to the CME Group's FedWatch tool. Policymakers are widely expected to keep rates unchanged next week. With investors increasingly expecting Trump to reach favourable trade agreements with several countries in the coming weeks, the benchmark S&P 500 index is just 2.1 per cent below its record high touched in February. The tech-heavy Nasdaq is about 2.9 per cent from record levels hit in December. Goldman Sachs trimmed its US recession probability to 30 per cent from 35 per cent on easing uncertainty around Trump's tariff policies. Declining issues outnumbered advancers by a 1.35-to-1 ratio on the NYSE and by a 2.03-to-1 ratio on the Nasdaq. The S&P 500 posted four new 52-week highs and three new lows while the Nasdaq Composite recorded 24 new highs and 39 new lows.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store