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Daily Maverick
4 days ago
- Business
- Daily Maverick
Stocks slip, dollar sags as Trump tariffs remain after latest courtroom twist
A screen reflecting on glass displays the Hang Seng stock index at the Central district in Hong Kong, China, April 7, 2025. REUTERS/Tyrone Siu/File Photo Japan's Nikkei underperforms as yen strengthens on safe-haven demand Appeals court reinstates duties a day after trade court halted them Analysts say court drama mostly just adds to market uncertainty By Kevin Buckland – Japan's Nikkei saw the most pronounced selling, after experiencing the most pronounced buying on Thursday, with moves in the exporter-heavy index exacerbated by the ebb and flow in demand for the safe-haven yen. The United States Court of Appeals for the Federal Circuit in Washington temporarily reinstated Trump's duties on Thursday while it considers the government's appeal. On Wednesday, a little-known trade court had unanimously ruled Trump overstepped his authority, and tariffs were the jurisdiction of Congress not the president. Either way, senior Trump administration officials said they were undeterred and expected either to prevail on appeal or to employ other powers to ensure the tariffs remain. The Nikkei dropped 1.7% in the Asian morning, putting it basically back at Wednesday's closing level. The yen strengthened about 2% from its low on Thursday to last change hands at around 143.48 per dollar. A stronger yen reduces the value of overseas revenues. Hong Kong's Hang Seng sank 1.4% and mainland China's blue chip index eased 0.3% in early trading. South Korea's KOSPI fell 0.5%. MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.4%. 'Trump's trade agenda remains alive and kicking, with the legal battle adding yet another layer of uncertainty,' said Rodrigo Catril, senior FX strategist at National Australia Bank. 'The only thing that looks more certain is more uncertainty,' which will lead to additional delays in investment decisions and hiring, he said. US S&P 500 futures retreated 0.2%. The cash index rose 0.4% overnight, but that was largely the effect of resilient Nvidia from after the market close on Wednesday, to which Asian shares already had a chance to react. Pan-European STOXX 50 futures edged 0.1% lower. The 10-year US Treasury yield was steady at 4.42% on Friday, following a 5.5 basis point slide on Thursday. Safe-haven gold was little changed at $3,311 per ounce, following a 0.8% advance in the previous session. Risk-sensitive bitcoin slipped to a 10-day low of $104,714.35. Both Brent and US West Texas Intermediate crude eased 0.3% early on Friday, to $63.97 and $60.75 per barrel, respectively. Despite the uncertainty injected by the courtroom drama, the Trump administration said negotiations with top trading partners continue unabated. Treasury Secretary Scott Bessent noted during an interview with Fox News that he is scheduled to have talks with a high-level Japanese delegation later on Friday in Washington. Trump had already paused his 'Liberation Day' tariff rates on most trade partners for 90 days to July 9 and set a baseline rate of 10% in the meantime in order to give time for some of them to hammer out deals. So far though, apart from a broad agreement with Britain, deals remain elusive. Bessent said in the interview with Fox News that talks with China are 'a bit stalled,' and may need the direct involvement of Trump and Chinese President Xi Jinping to get across the finish line. (Reporting by Kevin Buckland; Editing by Jamie Freed)
The Standard
4 days ago
- Business
- The Standard
China sets up international mediation body in Hong Kong
The International Organisation for Mediation (IOMed) headquarters, a China-initiated body, is seen under construction for global dispute resolution, in Hong Kong, China, May 29, 2025. REUTERS/Tyrone Siu/File Photo
Straits Times
13-05-2025
- Business
- Straits Times
US to cut 'de minimis' tariff on China shipments, bolstering broader trade truce
FILE PHOTO: Parcels waiting to be processed are seen through a glass as a delivery worker's reflection appears on it in a post office, as Hong Kong Post stops certain U.S.-bound shipments since April 27 due to new U.S. tariff rules, in Hong Kong, China, May 2, 2025. REUTERS/Tyrone Siu/File Photo HONG KONG - The United States will cut the low value "de minimis" tariff on China shipments, a White House executive order said on Monday, further de-escalating a potentially damaging trade war between the world's two largest economies. The tariff relief comes in the wake of Beijing and Washington announcing a truce in their trade spat after weekend talks in Geneva, with both sides agreeing to unwind most of the tariffs imposed on each other's goods since early April. While their joint statement in Geneva didn't mention the de minimis duties, the White House order released later said the levies will be reduced to 54% from 120%, with a flat fee of $100 to remain, starting from May 14. The de minimis exemption, for items valued at up to $800 and sent from China via postal services, were previously able to enter the United States duty free and with minimal inspections. In February, President Donald Trump ended the de minimis exemption by imposing a tax of 120% of the package's value or a planned flat fee of $200 - set to come into effect by June - blaming it for being heavily used by companies such as Shein, Temu and other e-commerce firms as well as traffickers of fentanyl and other illicit goods. The number of shipments entering the U.S. through the tax-free channel exploded in recent years with more than 90% of all packages coming via de minimis. Of those, about 60% came from China, led by direct-to-consumer retailers such as Temu and Shein. Chinese online retailers Shein, PDD Holdings-owned Temu and U.S. rival Amazon did not immediately respond to requests for comment. In Monday's order, the White House said the reduced tariffs will take effect by 12:01 a.m. (0401 GMT)on May 14, 2025. The plan for a $200 flat fee duty rate would also be shelved, it said, keeping it at $100. China exported $240 billion in direct-to-consumer goods benefiting from de minimis worldwide last year, accounting for 7% of its overseas sales and contributing 1.3% of gross domestic product, according to Nomura estimates. China's yuan jumped to a six-month high against the dollar on Tuesday, joining a global rally in riskier assets following the broader trade deal between Beijing and Washington. Trump's global trade war, which shredded the playbooks that have governed international trade for decades, has shaken up financial markets and raised fears of a recession. BREATHING ROOM The U.S. de minimis rule, which dates back to 1938, has been the target of growing criticism from both Democratic and Republican lawmakers. Some have derided it as a loophole that allows cheap Chinese products to flood into the United States and undercut American industries, while also serving as cover for smuggling contraband such as illegal drugs and their precursor chemicals. De minimis, a legal term referring to matters of little importance which describes the U.S. waiver of standard customs procedures and tariffs, was one of the most generous exemptions in the world: the EU de minimis threshold, for example, is 150 euros ($156). The Geneva agreement slashed tariffs for both the United States and China by 115 percentage points each, to 10% and 30%, respectively, for at least 90 days. The tariff pause will give online retailers like Shein and Temu breathing space to adapt their businesses, say industry experts, as online retailers are likely to use the time to bring in bulk shipments and restock their U.S. warehouses. Big beneficiaries of de minimis include online retailers that ship goods mainly from China, such as Shein, Temu and Alibaba's AliExpress. Their growth prompted Amazon to start its own discount service, Haul, allowing marketplace merchants to ship $5 accessories and other items directly from China using de minimis. Separately, China has removed a ban on airlines taking delivery of Boeing planes in the wake of the Geneva trade deal, Bloomberg News reported on Tuesday, citing sources familiar with the matter. Officials in Beijing have started to tell domestic carriers and government agencies this week that deliveries of aircraft made in the United States can resume, Bloomberg said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
13-05-2025
- Business
- Straits Times
US to cut 'de minimis' tariff on China shipments, bolsters broader trade truce
FILE PHOTO: Parcels waiting to be processed are seen through a glass as a delivery worker's reflection appears on it in a post office, as Hong Kong Post stops certain U.S.-bound shipments since April 27 due to new U.S. tariff rules, in Hong Kong, China, May 2, 2025. REUTERS/Tyrone Siu/File Photo HONG KONG - The United States will cut the low value "de minimis" tariff on China shipments, a White House executive order said on Monday, further de-escalating a potentially damaging trade war between the world's two largest economies. The move comes several hours after Beijing and Washington announced a truce in their trade spat after weekend talks in Geneva, with both sides agreeing to unwind most of the tariffs imposed on each other's goods since early April. While their joint statement in Geneva didn't mention the de minimis duties, the White House order released later said the levies will be reduced to 54% from 120%, with a flat fee of $100 to remain, starting from May 14. The de minimis exemption, for items valued at up to $800 and sent from China via postal services, were previously able to enter the United States duty free and with minimal inspections. In February, President Donald Trump ended the de minimis exemption by imposing a tax of 120% of the package's value or a planned flat fee of $200 - set to come into effect by June - blaming it for being heavily used by companies such as Shein, Temu and other e-commerce firms as well as traffickers of fentanyl and other illicit goods. The number of shipments entering the U.S. through the tax-free channel exploded in recent years with more than 90% of all packages coming via de minimis. Of those, about 60% came from China, led by direct-to-consumer retailers such as Temu and Shein. Chinese online retailers Shein, PDD Holdings-owned Temu and U.S. rival Amazon did not immediately respond to requests for comment. In Monday's order, the White House said the reduced tariffs will take effect by 12:01 a.m. (0401 GMT)on May 14, 2025. The plan for a $200 flat fee duty rate would also be shelved, it said, keeping it at $100. BREATHING ROOM The U.S. de minimis rule, which dates back to 1938, has been the target of growing criticism from both Democratic and Republican lawmakers. Some have derided it as a loophole that allows cheap Chinese products to flood into the United States and undercut American industries, while also serving as cover for smuggling contraband such as illegal drugs and their precursor chemicals. De minimis, a legal term referring to matters of little importance which describes the U.S. waiver of standard customs procedures and tariffs, was one of the most generous exemptions in the world: the EU de minimis threshold, for example, is 150 euros ($156). The Geneva agreement slashed tariffs for both the United States and China by 115 percentage points, to 10% and 30%, respectively, for at least 90 days. The tariff pause will give online retailers like Shein and Temu breather space to adapt their businesses, say industry experts, as online retailers are likely to use the time to bring in bulk shipments and restock their U.S. warehouses. Big beneficiaries of de minimis include online retailers that ship goods mainly from China, such as Shein, Temu and Alibaba's AliExpress. Their growth prompted Amazon to start its own discount service, Haul, allowing marketplace merchants to ship $5 accessories and other items directly from China using de minimis. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
13-05-2025
- Business
- Straits Times
US to cut 'de minimis' tariff on China shipments to 54% from 120%
FILE PHOTO: Parcels waiting to be processed are seen through a glass as a delivery worker's reflection appears on it in a post office, as Hong Kong Post stops certain U.S.-bound shipments since April 27 due to new U.S. tariff rules, in Hong Kong, China, May 2, 2025. REUTERS/Tyrone Siu/File Photo US to cut 'de minimis' tariff on China shipments to 54% from 120% HONG KONG - The United States would cut the low value "de minimis" tariff on China shipments to 54% from 120%, with a flat fee of $100 to remain, starting from May 14, modifying an earlier order imposed by Washington, a White House executive order said on Monday. The move comes several hours after Beijing and Washington announced a truce in their trade war, with both sides agreeing to unwind most of the tariffs imposed on each other's goods since early April. The de minimus exemption, for items valued at up to $800 and sent from China via postal services, were previously able to enter the United States duty free and with minimal inspections. In February, President Donald Trump ended the de minimis exemption by imposing a tax of 120% of the package's value or a planned flat fee of $200 - set to come into effect by June - after it was heavily used by companies such as Shein, Temu and other e-commerce firms as well as traffickers of fentanyl and other illicit goods. The number of shipments entering the U.S. through the tax-free channel exploded in recent years with more than 90% of all packages coming via de minimis. Of those, about 60% came from China, led by direct-to-consumer retailers such as Temu and Shein. Temu, Shein and Amazon did not immediately respond to requests for comment. In Monday's order, the White House said it was amending 120% to 54% with the changes to take effect by 12:01 a.m. (0401 GMT)on May 14, 2025. The plan for a $200 flat fee duty rate would also be shelved, it said, keeping it at $100. The U.S. de minimis rule, which dates back to 1938, has been the target of growing criticism from both Democratic and Republican lawmakers. Some have derided it as a loophole that allows cheap Chinese products to flood into the United States and undercut American industries, while also serving as cover for smuggling contraband such as illegal drugs and their precursor chemicals. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
