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Time of India
13-06-2025
- Business
- Time of India
China, UK trade deals with Trump pile pressure on EU
Representative AI image After London comes Beijing: US President Donald Trump announced a breakthrough in talks with China to put an end to their rapidly escalating tariff war on Wednesday night, though the details of the agreement remain unclear, and key elements are still awaiting formal approval. "Our deal with China is done, subject to final approval with President Xi [Jinping] and me," Trump wrote on his social media platform, Truth Social. "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!)" One day later, the scope of the deal remains uncertain. Neither Trump nor US officials had clarified which tariffs might be lifted or what concessions were included, according to the Associated Press news agency. Negotiations appear to be ongoing. 'Liberation Day' wounds healing Two months ago, Trump announced a blanket baseline 10% tariffs on virtually all goods imported into the US, an event he dubbed "Liberation Day." Higher country-specific rates followed, with Chinese imports hit particularly hard. Beijing immediately retaliated, with sharp increases of its own, sending bilateral tariffs soaring — peaking at 145% in some cases — on a trade relationship worth $583 billion (approximately €503.5 billion) in recent negotiations have helped bring mutual tariffs down, tensions remain. As of mid-May, US tariffs on Chinese goods averaged 51%, while Chinese tariffs on US goods stood at 33%, according to the Peterson Institute for International Economics, a US think tank. The UK and the US struck a much-vaunted deal one month ago. However, tariffs on key goods remain in place, pending further implementation. Europe treads cautiously Compared to China, the EU has so far opted for a rather restrained approach, with high-level officials engaged in intensive talks. As of April, most EU exports to the US have faced 10% tariffs. Additional 25% duties on steel and aluminum, imposed in March, remain in effect. The bloc has so far avoided the higher rates slapped on EU was poised to hit back with significant countermeasures on everything from whiskey to motorcycles prepared a second package, though both have been paused as EU-US negotiations continue. Brussels is pushing for a "zero-for-zero" trade agreement, aiming to eliminate tariffs on industrial goods. So far, talks have stalled. One of Trump's key complaints is the persistent trade imbalance. In 2024, the US imported significantly more goods from the EU than it exported, with a trade deficit of $216 billion, according to official US figures. However, the EU frequently argues that the US sells far more services to the bloc than the other way round. One option the European Commission, which as the EU executive branch represents the 27 member states in negotiations, has proposed is pushing EU companies and countries to buy more natural gas from the US, a shift that is already well under way since it turned away from Russia following its full-scale invasion of Ukraine in 2022. EU's nuclear option If all else fails for the EU and Trump resorts to 50% tariffs or even higher rates, there has been some discussion of another more radical move from the EU. "Should Europe retaliate if Trump's tariffs hit on 9 July, and how? If yes, then there seems to be general agreement that, beyond tariffs on goods, US digital services are the most likely and vulnerable target," Tobias Gehrke of the European Council on Foreign Relations posted late last month on social media platform Bluesky. Gehrke pointed to the EU's Anti-Coercion Instrument, a legal framework which empowers the EU to target services and could limit US companies' access to public procurement contracts in Europe. It came into effect in 2023, but has never been used, Time is of the essence With talks ongoing, US Secretary of Commerce Howard Lutnick has indicated that the bloc is at the back of the line. "I'm optimistic that we can get there with Europe," Lutnick told US broadcaster CNBC on Wednesday. "But Europe will probably be at the very, very end." On Thursday, US outlet Bloomberg reported that EU officials expect talks to extend beyond the current July 9 deadline, citing unnamed sources close to the negotiators, the pressure to wrap up a deal is enormous. "We'll get this deal done in the best way possible," an EU official told DW on the condition of anonymity. "But it's very clear that not only in the EU institutions, but also around the member states, people just don't want to go through this anymore." "In the volatile world we're in, everyone wants to have reliable trading partners, and the US just isn't that right now," the source added. In the coming days, the G7 and NATO summits in Canada and the Netherlands respectively, might have presented an opportunity for Trump and European Commission President Ursula von der Leyen to meet. However, the European Commission said on Thursday that no bilateral meetings were currently planned. "That could still change," Commission spokesperson Miriam Garcia Ferrer told reporters at a briefing in Brussels.
Boston Globe
12-06-2025
- Business
- Boston Globe
Innovation takes a backseat at small companies as tariffs become a full-time preoccupation
'If we don't have enough cash to cover just the restocks of the things that we know we need, do we want to take a risk on this new thing when we don't know how well it will sell yet?' Dorai Home founder Kelsey O'Callaghan said. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up O'Callaghan started the eco-friendly home goods company with a stone bath mat and now offers about 50 kitchen and bathroom accessories, which are made in China with a non-toxic material that dries quickly. New launches are critical to increasing sales and attracting customers, she said. Advertisement As Trump increased the tariff on Chinese goods to 20 percent and as high as 145 percent before reducing the import tax rate to 30 percent for 90 days, Dorai Home postponed introducing new merchandise. O'Callaghan said she had to lay off the CEO as well as the head of product development, who helped the company jump on new trends. 'I haven't really put the time or the emphasis on (innovation) because I'm covering too many other people's roles,' she said. Advertisement The company paused shipments from China in early April but resumed some on a staggered basis after the president's rate reduction. On Wednesday, Trump touted progress in US-China trade talks. With details still sketchy and a deal not finalized, entrepreneurs interviewed by the Associated Press said they viewed the tariffs war as an ongoing threat. Tariffs and American innovation The potential stunting of innovation follows an economic slowdown during the coronavirus pandemic, when companies also had to put projects on hold. Some experts think the on-again-off again tariffs may have more enduring consequences because they rewire markets and upend business strategies. 'When executive attention shifts from innovation to regulatory compliance, the innovation pipeline suffers. Companies end up optimizing for the political landscape rather than technological advancement,' economists J. Bradford Jensen, a nonresident senior fellow at the Peterson Institute for International Economics, and Scott J. Wallsten, president of the Technology Policy Institute think tank, wrote in an April blog post. Trump has argued that curtailing foreign imports with tariffs would help revive the nation's diminished manufacturing base. Analysts and various trade groups have warned that fractured trade ties and supply chains may depress R&D activity of US tech and health care companies that rely on international partnerships or foreign suppliers. Small companies, which often drive the innovations that create jobs and economic growth, already are under strain. With fewer people on staff and tighter budgets compared to large corporations, entrepreneurs say they are spending more time on cutting costs, suspending or arranging orders, and deciding how much of their tariff-related costs to charge customers. That means they're spending less time thinking of their next big ideas. Advertisement Schylling Inc., a Massachusetts company that produces modern versions of Lava lamps, Sea-Monkeys, My Little Pony, and other nostalgic toys, has its products made in China. As part of its strategy to account for tariffs, the company put a group of employees on temporary unpaid leave last month to reduce expenses. Beth Muehlenkamp, who was marketing director at the company, was one of them, but now she and several others who were furloughed, were permanently laid off early this month. She noted that she and other staff members typically would have been planning products for the final months of 2026. But Schylling isn't focusing on designing new products given the unstable trade outlook. 'It's really hard to focus on innovation and creativity when you're consumed with this day-to-day of how we're just going to balance the books and deal with the changing rates,' Muehlenkamp said. An uneven product pipeline Even some companies that do their manufacturing in the United States are scaling back investments in new products. Made Plus, a Maryland company that makes athletic shoes at a small factory in the state capital, put a planned golf line on hold because two key components — a foam insole and the tread for the bottom of the shoe — currently are made in China, founder Alan Guyan said. The company customizes its shoes on demand and charges $145 to $200 a pair. The footwear is made from recycled plastic bottles with advanced knitting, 3-D printing and computerized stitching techniques. It's looking into getting components from Vietnam instead of China. A collection of Made Plus sneakers on display at the company's manufacturing facility in Annapolis, Md. Stephanie Scarbrough/Associated Press Embracing new technology is essential to restoring manufacturing capability in the United States and competing with Asia, Guyan said. But given ongoing trade frictions, he said he does not want to invest time or money evaluating the latest embroidery and knitting machines, which come from Germany, Italy, China, and the United States. Advertisement 'We're just battening down the hatches a little bit and just hoping that there's enough influence in the community of footwear that it will somewhat change and get resolved and we can move forward,' he said of the tariff roller coaster. In contrast, many big companies are forging on. Google parent Alphabet confirmed late last month that it still planned to spend $75 billion on capital expenditures this year, with most of the money going toward artificial intelligence technology. What's next for R&D? Sonia Lapinsky, a managing director at consulting firm AlixPartners, has advised her clients to limit tariff discussions to a small group of executives and to keep their product creation cycles in motion. Businesses have an even greater imperative to come up with attention-grabbing innovations when consumers may be reluctant to open their wallets, she said. Yet smaller companies may struggle to wall off tariff discussions from the rest of the business. Learning Resources CEO Rick Woldenberg said that roughly 25 percent to 30 percent of the 350 employees at the educational toy company's headquarters, including product developers, are working at least part-time on tariff-related tasks. The company usually develops 250 different products a year and expects to get half that many off the drawing board for 2026, Woldenberg said. While exploring factories in countries besides China, he said, Learning Resources is delaying the next generation of its interactive robots that help children develop computer programming skills through games and other activities. The family-run business and Woldenberg's other toy business, hand2Mind, are locked in a legal battle with the Trump administration. The jointly owned companies filed a lawsuit accusing the president of exceeding his authority by invoking an emergency powers law to impose tariffs. Advertisement A federal judge ruled in favor of the two companies last month, and the administration has appealed the decision. Woldenberg said he's ready to take the case to the US Supreme Court. 'It's a win at the Supreme Court that we need,' he said. 'And so until then, there will be no certainty. Even then, if the government is bound and determined to keep us in an uncertain situation, they'll be able to do that.'
Korea Herald
12-06-2025
- Business
- Korea Herald
Battle-tested duo leads Seoul into high-stakes tariff talks with Washington
"Korea is back," says new Trade Minister Yeo Han-koo, pledging swift action on US tariff talks With the July deadline for the US tariff reprieve approaching, South Korea is ramping up preparations for make-or-break tariff negotiations, placing two seasoned negotiators at the forefront in a bid to deliver a breakthrough. Described by many observers as one of the most qualified experts, Yeo Han-koo, who most recently served as a senior fellow at the Peterson Institute for International Economics in Washington, took office as the new trade minister on Thursday. This marks his second time serving as Korea's top trade envoy, following his previous tenure during the Moon Jae-in administration from 2021 to 2022. In 30 years of public service, Yeo has sat at the bargaining table for numerous trade deals, including the Regional Comprehensive Economic Partnership, the Korea-EU FTA, and others. Backing Yeo is Kim Hyun-chong, deputy national security adviser under the Moon administration and a two-time trade minister. He is widely expected to be named special adviser to the president for foreign affairs and national security. In this advisory role, Kim is expected to leverage his extensive trade expertise while providing the president with broader strategic insights. During President Lee Jae-myung's campaign, Kim served as an adviser on foreign affairs and national security. In May, he visited Washington to meet with Trump officials to discuss tariff and trade-related issues. Known for a candid and straightforward style, Kim played a pivotal role in negotiating South Korea's free trade agreements with over 40 countries during the Roh Moo-hyun administration. He served again as a chief trade negotiator under Moon, further cementing his reputation as a skilled diplomatic negotiator. The two men previously worked closely together during the renegotiation of the Korea-US FTA and steel tariffs during the first Trump administration, with Kim as trade minister and Yeo as commercial attache at the Korean Embassy in Washington. At that time, Korea was able to secure a duty-free import quota for steel products, receiving exemptions from US steel tariffs. Given the duo's track record and deep ties in Washington, expectations are high that Seoul could bolster its negotiating power and break the deadlock in tariff talks, which have been moving slowly due to a leadership vacuum in Korea. There's not much time before the July 8 deadline. The Trump administration imposed 25 percent 'reciprocal' tariffs on all imports from South Korea in April. Unless a new trade deal is reached, tariffs will jump from the current 10 percent to 25 percent when the 90-day grace period expires, which will deal a blow to the export-dependent South Korean economy. In light of this urgency, Yeo, at his inauguration ceremony held at the government complex in Sejong on Thursday, said he will 'expedite the 'shuttle negotiations' with the US at the trade minister level," noting that the new government in Seoul has secured democratic legitimacy and a clear mandate. He added that the ministry will establish an all-out response system for trade negotiations with the US, expanding and restructuring the existing task force to encompass trade, industry and energy issues. The rank of Korea's working-level representative will also be elevated from the current director level to the deputy minister level. Through this effort, the government will 'establish a new structural framework for mutually beneficial Korea-US cooperation in industry, trade and investment over the next five years,' Yeo said. 'I will do my best to achieve a nation-oriented, pragmatic outcome in trade talks,' he added. "Korea is back," said Yeo, striking a confident tone. "As much as South Korea needs the US, the US also needs Korea. We will negotiate confidently to build a mutually beneficial partnership." Negotiations are expected to intensify in the coming weeks, with a third round of technical talks expected this month. These talks are set to address issues including trade imbalances and non-tariff barriers. Seoul has been pushing for reduced tariff rates or exemptions through a comprehensive deal covering both tariffs and broader economic cooperation. Compounding the tariff issue, non-tariff barriers have emerged as a key sticking point in the bilateral talks. The US Trade Representative has particularly flagged Korea's restrictions on imports of US beef from cattle over 30 months old and regulations on the overseas transfer of high-precision mapping data. In preparing for the negotiations, the industry ministry has commissioned a state-run think tank to conduct economic impact studies analyzing the effects of the tariffs and anticipated US demands.
The Herald Scotland
12-06-2025
- Business
- The Herald Scotland
China's imports plunge as trade talks conclude
Through February and March, overall imports to the U.S. hit record highs as traders anticipated rising tariffs. But under the withering tariff rates President Donald Trump announced on April 2, what he called "Liberation Day," that overall import number plunged from more than $340 billion in March to just $273 billion in April. "People were importing in anticipation of the imposition of tariffs. Then, when he made the Liberation Day announcement, everything collapsed," said Marcus Noland, executive vice president and director of studies at the Peterson Institute for International Economics, a think tank based in Washington, D.C. "China is just the best example because when the United States does something, China retaliates. And so that's why we got into the escalatory spiral and ended up with triple-digit tariffs," Noland added. "People couldn't import. Some people literally did not have the money to pay the import tariff." Ocean freight volumes from China to the U.S. fell sharply in April, down 34% from a year earlier, according to Kristy Garcia-Quintela, director of ocean freight at GEODIS, a global logistics company. "34% is pretty big," said Garcia-Quintela, who added the U.S. demand for global ocean shipping saw a 6% decline in April compared to the same month last year. Besides Chinese imports dropping to a post-pandemic low, shipments from the United States' other largest trading partners - the European Union, Mexico, and Canada - also fell in April. Purchases from the European Union, for example, dropped in April to $53 billion after surging to an all-time high just a month earlier at nearly $82 billion. Despite a partial pullback in tariffs and ongoing trade talks, the trade tensions still remain high, and experts expressed concerns about the road ahead. "The truly catastrophic tariffs that were announced on Liberation Day have been avoided, but it's not like everything is looking good right now," said Noland, the economist. (This story has been updated to reflect new events.)
Yahoo
11-06-2025
- Business
- Yahoo
Trump says U.S. has reached a trade deal with China. What consumers can expect? How tariffs with China changed
President Donald Trump and officials from China announced that they have agreed on a framework for a trade deal between the two major economic powers. The announcement came after two days of intense negotiations in London, aimed at resolving a near halt in trade between the countries following Trump's imposition of 145% tariffs on Chinese imports. Trump's tariffs roiled global markets, costing companies tens of billions of dollars in lost sales and higher costs. U.S. stock futures were lower while investors were awaiting details of a U.S.-China trade deal. Futures linked to the blue-chip Dow Jones Industrial Average fell 0.19%, while broad S&P 500 futures dropped 0.20% and tech-heavy Nasdaq futures slipped 0.20%. Here's what to know about the current deal. "Our deal with China is done," Trump announced on social media on June 11. He stated that the United States would impose a 55% tariff on Chinese imports, while China would impose a 10% tariff on U.S. imports. Trump said Chinese students would be allowed to attend U.S. colleges and universities, which he said 'has always been good with me.' And China will supply rare earths that are key to manufacturing technology, he said. Prior to President Trump's return to the Oval Office, tariffs between China and the United States had hovered between 10% and 20% for the past seven years. The current tariffs the United States has imposed on China are approximately 596% higher than at the beginning of the year. According to the Peterson Institute for International Economics, a nonprofit research organization, the United States currently has a tariff rate of 124.1% against Chinese goods. On Jan. 1, 2025, tariffs were only 20.8%. When President Trump ended his first term, tariffs on Chinese goods were 19.3%. Looking at the same timeline, Chinese tariffs against U.S. goods now sit at 147.6%. At the beginning of the year, tariffs were 21.2%, 0.4% higher than U.S. tariffs. When Trump ended his first term, Chinese tariffs against the U.S. were 21.2%, 1.9% higher than the U.S. Throughout former President Joe Biden's term, tariffs against China only increased twice, whereas tariffs against the U.S. increased once after going down. Tariffs against China sat at 19.3% for most of Biden's term, increasing to 19.9% near Sept. 27, 2024, and 20.8% near Jan. 1, 2025. Tariffs from China against the U.S. were set at 21.2% around July 1, 2020, and dropped to 21.1% around May 1, 2021. China then increased back to 21.2% around Jan. 1, 2025. While China did impose higher tariffs on goods from the United States, it did so on fewer products. Between Sept. 1, 2019, and Feb. 4, 2025, only 50.3% of U.S. exports were subject to Chinese tariffs. During the same time frame, 66.6% of Chinese exports were subjected to U.S. tariffs until President Trump increased them to 100% in early February. USA TODAY contributed to this report. This article originally appeared on Memphis Commercial Appeal: Trump says China trade deal is done: How have tariffs changed Sign in to access your portfolio
