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Bloomberg
8 hours ago
- Business
- Bloomberg
US Tariff Spike Hits China's Small Parcels, Squeezing Exporters
US tariff hikes on small packages from China triggered a slump in shipments last month, contributing to a huge drop in bilateral trade and roiling exporters like Shein Group Ltd. The value of small parcels sent from China to the US fell to just over $1 billion in May, the least since early 2023, according to customs data released Friday. The 40% plunge from the same month last year marks a sharp reversal for a booming trade route, coming just as the US government eliminated a long-standing tariff loophole.
South China Morning Post
4 days ago
- Business
- South China Morning Post
China weathers tariff storm in May, PLA patrols in disputed waters: SCMP daily highlights
Catch up on some of SCMP's biggest China stories of the day. If you would like to see more of our reporting, please consider subscribing Supply chain competition between China and the United States is set to intensify over the next five years, with eight developing countries – including four in the Association of Southeast Asian Nations (Asean) – poised to benefit from the relocation of manufacturing from China, according to a recent study. China's economic data sent mixed signals in May, with US tariffs continuing to weigh on the country's manufacturing and exports but domestic consumption picking up slightly in the run-up to a major online shopping festival. The Chinese military conducted patrols in the South China Sea on Saturday while a Philippine-Japan joint drill was under way. Photo: PLA Southern Theatre Command The Chinese military carried out patrols in the South China Sea on Saturday, as the Philippines and Japan held a joint drill in the disputed waters.
South China Morning Post
4 days ago
- Business
- South China Morning Post
The US-China rivalry is reshaping global supply chains – who benefits most?
Supply chain competition between China and the United States is set to intensify over the next five years, with eight developing countries – including four in the Association of Southeast Asian Nations (Asean) – poised to benefit from the relocation of manufacturing from China, according to a recent study. The research, published in the Chinese journal Economist, identifies Malaysia, Vietnam, Mexico, Turkey, Thailand, Indonesia, India and Brazil as the top candidates likely to benefit from shifting global production. All eight economies offer lower labour costs than China and maintain strong trade ties with Western markets, the authors said. Driven by growing Chinese outbound investment and sustained US demand for exports, the eight economies could emerge as critical links in changing global supply chains, the study found. The authors highlighted two parallel trends behind the shift. Washington's push for 'friendshoring' and the 'China+1' strategy were prompting multinationals to diversify production to reduce exposure to tariffs. In addition, Chinese firms were exploring lower-cost regions, especially among Belt and Road Initiative partners and African countries. The study was published last month as a second trade war between the world's two largest economies severely disrupted global supply chains, raised costs and prompted strategic realignments. Co-authored by a researcher from the Chinese Academy of Social Sciences, a prominent state think tank, the paper links the US National Security Strategy for 2023–2033 – which casts the decade as 'decisive' for US-China competition – with Beijing's 15th Five-Year Plan (2026–2030), seen as a critical window to achieve its 2035 modernisation goals.
Al Jazeera
12-06-2025
- Automotive
- Al Jazeera
Why China's rare earth exports are a key issue in trade tensions with US
China's export of rare earth elements is central to the trade deal struck this week with the United States. Beijing has a virtual monopoly on the supply of the critical minerals, which are used to make everything from cars to drones and wind turbines. Earlier this year, Beijing leveraged its dominance of the sector to hit back at US President Donald Trump's sweeping tariffs, placing export controls on seven rare earths and related products. The restrictions created a headache for global manufacturers, particularly automakers, who rely on the materials. After talks in Geneva in May, the US and China announced a 90-day pause on their escalating tit-for-tat tariffs, during which time US levies would be reduced from 145 percent to 30 percent and Chinese duties from 125 percent to 10 percent. The truce had appeared to be in jeopardy in recent weeks after Washington accused Beijing of not moving fast enough to ease its restrictions on rare earths exports. After two days of marathon talks in London, the two sides on Wednesday announced a 'framework' to get trade back on track. Trump said the deal would see rare earth minerals 'supplied, up front,' though many details of the agreement are still unclear. Rare earths are a group of 17 elements that are essential to numerous manufacturing industries. The auto industry has become particularly reliant on rare-earth magnets for steering systems, engines, brakes and many other parts. China has long dominated the mining and processing of rare earth minerals, as well as the production of related components like rare earth magnets. It mines about 70 percent of the world's rare earths and processes approximately 90 percent of the supply. China also maintains near-total control over the supply of heavy rare earths, including dysprosium and terbium. China's hold over the industry had been a concern for the US and other countries for some time, but their alarm grew after Beijing imposed export controls in April. The restrictions affected supplies of samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, and required companies shipping materials and finished products overseas to obtain export licences. The restrictions followed a similar move by China in February, when it placed export controls on tungsten, bismuth and three other 'niche metals'. While news of a deal on rare earths signals a potential reprieve for manufacturers, the details of its implementation remain largely unclear. Chinese customs data shows the sale of rare earths to the US dropped 37 percent in April, while the sale of rare earth magnets fell 58 percent for the US and 51 percent worldwide, according to Bloomberg. Global rare earth exports recovered 23 percent in May, following talks between US and Chinese officials in Geneva, but they are still down overall from a year earlier. The greatest alarm has been felt by carmakers and auto parts manufacturers in the US and Europe, who reported bottlenecks after working their way through inventories of rare earth magnets. 'The automobile industry is now using words like panic. This isn't something that the auto industry is just talking about and trying to make a big stir. This is serious right now, and they're talking about shutting down production lines,' Mark Smith, a mining and mineral processing expert and the CEO of the US-based NioCorp Developments, told Al Jazeera. Even with news of a breakthrough, Western companies are still worried about their future access to rare earths and magnets and how their dependence on China's supply chain could be leveraged against them. The Financial Times reported on Thursday that China's Ministry of Commerce has been demanding 'sensitive business information to secure rare earths and magnets' from Western companies in China, including production details and customer lists. Trump shared some details of the agreement on his social media platform, Truth Social, where he also addressed concerns about rare earths and rare earth magnets. 'We are getting a total of 55% tariffs, China is getting 10%. The relationship is excellent,' Trump said, using a figure for US duties that includes levies introduced during his first term. 'Full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me),' Trump said. Ahead of the negotiations in London, China's Ministry of Commerce had said it approved an unspecified number of export licences for rare earths, and it was willing to 'further strengthen communication and dialogue on export controls with relevant countries'. However, an op-ed published by state news outlet Xinhua this week said rare earth export controls were not 'short-term bargaining tools' or 'tactical countermeasures' but a necessary measure because rare earths can be used for both civilian and military purposes. NioCorp Developments' Smith said Beijing is unlikely to quickly give up such powerful leverage over the US entirely. 'There's going to be a whole bunch of words, but I really think China is going to hold the US hostage on this issue, because why not?' he said. 'They've worked really hard to get into the position that they're in. They have 100 percent control over the heavy rare earth production in the world. Why not use that?' Deborah Elms, the head of trade policy at the Hinrich Foundation in Singapore, said it was hard to predict how rare earths would be treated in negotiations, which would need to balance other US concerns like China's role in exporting the deadly opioid fentanyl to the US. Beijing, for its part, will want guarantees that it can access advanced critical US technology to make advanced semiconductors, she said.
CTV News
11-06-2025
- Business
- CTV News
The U.S. and China say they have agreed on a framework to resolve their trade disputes
A general view of the Lancaster House, where the trade talks between the U.S. and China are taking place is seen, in London, Monday, June 9, 2025. (AP Photo/Kin Cheung) LONDON — Senior U.S. and Chinese negotiators have agreed on a framework to get their trade negotiations back on track after a series of disputes that threatened to derail them, both sides have said. The announcement came at the end of two days of talks in the British capital that wrapped up late Tuesday. The meetings appeared to focus on finding a way to resolve disputes over mineral and technology exports that had shaken a fragile truce on trade reached in Geneva last month. It's not clear whether any progress was made on the more fundamental differences over China's sizeable trade surplus with the United States. 'First we had to get sort of the negativity out and now we can go forward,' U.S. Commerce Secretary Howard Lutnick told reporters after the meetings. Asian stock markets rose Wednesday after the agreement was announced. The talks followed a phone call between President Donald Trump and Chinese leader Xi Jinping last week to try to calm the waters. Li Chenggang, a vice minister of commerce and China's international trade representative, said the two sides had agreed in principle on a framework for implementing the consensus reached on the phone call and at the talks on Geneva, the official Xinhua News Agency said. Further details, including any plans for a potential next round of talks, were not immediately available. Li and Wang Wentao, China's commerce minister, were part of the delegation led by Vice Premier He Lifeng. They met with Lutnick, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer at Lancaster House, a 200-year-old mansion near Buckingham Palace. Wendy Cutler, a former U.S. trade negotiator, said the disputes had frittered away 30 of the 90 days the two sides have to try to resolve their disputes. They agreed in Geneva to a 90-day suspension of most of the 100%-plus tariffs they had imposed on each other in an escalating trade war that sparked fears of recession. The World Bank, citing a rise in trade barriers, cut its projections Tuesday for U.S. and global economic growth this year. 'The U.S. and China lost valuable time in restoring their Geneva agreements,' said Cutler, now vice president at the Asia Society Policy Institute. 'Now, only sixty days remain to address issues of concern, including unfair trade practices, excess capacity, transshipment and fentanyl.' Since the Geneva talks, the U.S. and China have exchanged angry words over advanced semiconductors that power artificial intelligence, visas for Chinese students at American universities and rare earth minerals that are vital to carmakers and other industries. China, the world's biggest producer of rare earths, has signaled it may speed up the issuing of export licenses for the elements. Beijing, in turn, wants the U.S. to lift restrictions on Chinese access to the technology used to make advanced semiconductors. Lutnick said that resolving the rare earths issue is a fundamental part of the agreed-upon framework, and that the U.S. will remove measures it had imposed in response. He did not specify which measures. 'When they approve the licenses, then you should expect that our export implementation will come down as well,' he said. Cutler said it would be unprecedented for the U.S. to negotiate on its export controls, which she described as an irritant that China has been raising for nearly 20 years. 'By doing so, the U.S. has opened a door for China to insist on adding export controls to future negotiating agendas,' she said. In Washington, a federal appeals court agreed Tuesday to let the government keep collecting tariffs that Trump has imposed not just on China but also on other countries worldwide while the administration appeals a ruling against his signature trade policy. Trump said earlier that he wants to 'open up China,' the world's dominant manufacturer, to U.S. products. 'If we don't open up China, maybe we won't do anything,' Trump said at the White House. 'But we want to open up China.' ___ By Jill Lawless and Ken Moritsugu Moritsugu reported from Beijing. Associated Press writers Josh Boak and Paul Wiseman in Washington contributed to this story.
