The move by the Trump administration to lower tariffs on goods from China to 30% from 120%, still offers limited reprieve for US small businesses, who remain cautious as tariffs are still sky high by historical levels and are also pressuring profits.
Small businesses remain wary: Existing orders can be shipped from China within the 90-day window, but it’s not enough time to receive new orders.
“Small businesses that import from China will still take a beating,” said Heidi Crebo-Rediker, a senior fellow at the Council on Foreign Relations and a former State Department official. “This is still a huge nightmare to navigate,” she added, per Bloomberg.
On Monday, a White House executive order slashed the “de minimis” tariff on China shipments to 54% from 120%, with a $100 flat fee.
It served as the latest in a broad thawing of trade-war tensions between the US and China, after the two powers paused most tariffs for 90 days and sent markets into euphoria.
“The consensus from both delegations this weekend is neither side wants a decoupling,” US Treasury Secretary Scott Bessent said on Monday. “And what had occurred with these very high tariffs … was the equivalent of an embargo, and neither side wants that. We do want trade.”
Also on Tuesday, it was reported that China has lifted its ban on Boeing (BA) plane deliveries.
Meanwhile, President Trump’s Middle East visit has opened the door for Saudi Arabia and the UAE to push ahead with their AI ambitions, with Big Tech firms like Nvidia (NVDA) and Advanced Micro Devices (AMD) set to supply advanced chips.
Despite these deals, the world’s largest contract electronics maker, Foxconn (HNHAF, 2317.TW) downgraded its full year outlook on Wednesday due to tariff uncertainty.
Broader optimism for a comprehensive shift in US policy grew last week as Trump announced a trade deal with the UK, the first for his administration since imposing — then pausing — sweeping “reciprocal” tariffs against all trading partners in early April.
Meanwhile, US negotiations with the UK’s neighbors in the EU have taken a different tone, with the EU on Thursday unveiling a list of US products it will target with tariffs in the event trade negotiations fail.
Here are the latest updates as the policy reverberates around the world.
LIVE880 updates
Trump tariffs will produce ‘at least a temporary’ rise in inflation: Fed’s Jefferson
The Federal Reserve remains in wait-and-see mode while central bankers assess the extent to which inflation from tariffs will filter through the economy and whether those effects will be short-lived or persistent.
In the last policy meeting, Fed officials noted that the “risks of higher unemployment and inflation have risen.” And on Wednesday, Fed vice chairman Philip Jefferson weighed in on tariffs in a speech.
Yahoo Finance’s Jennifer Schonberger reports:
Read more here.
Scrap copper was piling up in the US. Now it can finally move
Bloomberg News reports:
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Chinese manufactures of Halloween goods to the US warn of delays
For Chinese manufacturers of Halloween decorations in the eastern city of Yiwn, feelings around the tariff truce appear to be mixed as many will have to scramble to produce and ship their hanging skeletons to America in time for the October 31 holiday.
Reuters reports:
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What to look for after the China deal
Yahoo Finance’s senior reporter Hamza Shaban looks at the afterglow of the tariff truce between the US and China in Wednesday’s Morning Brief. It’s a pause for 90-days, but what should you watch out for now both sides seem to standing down – for now.
Read more here.
Trump’s pause on China tariffs is still a ‘huge nightmare’ for small businesses
Bloomberg News reports:
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Sony sees $700 million tariff hit on underwhelming outlook
The burden of US tariffs have taken its toll on entertainment company Sony (SONY), wiping out any expectation of an increase in the group’s operating profit.
Bloomberg News reports:
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Nvidia supplier Foxconn cuts outlook due to tariff uncertainty
Reuters reports:
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Why Nvidia is the tech winner of the US-China tariff truce
Analysts are seeing a clear winner when it comes to the easing of trade relations between the US and China. Yahoo Finance’s Madison Mills looks into why Big Tech giant Nvidia (NVDA) may come out on top now that trade has eased between two of the worlds largest economies.
US soybean exports may fall 20% without China deal
US soybean exports may drop 20% and the prices paid to farmers will fall if the US and China fail to reach a trade agreement which has been limiting US soybeans from their largest market, according to research released on Wednesday from agribuisness consultants, AgResource.
Reuters reports:
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Car dealers shield buyers from tariff price hikes in April
Today’s Consumer Price Index (CPI) report showed auto prices were unchanged in April from the previous month despite the 25% tariffs on foreign-made cars that began on April 3.
Car buyers may have dealers to thank for not upping the sticker price on a new set of wheels.
Yahoo Finance’s Pras Subramanian reports:
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China’s Xi Jinping backs Panama against US over canal
Xi Jinping has backed Panama against US pressure over control of its ports and pledged stronger ties with Latin America, as China steps up efforts to expand influence in America’s backyard.
FT reports:
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US Bentley buyers delaying purchases after UK trade deal, boss warns
The FT reports:
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BlackRock CEO: Investors are sitting on trillions in cash as they wait for tariff ‘equilibrium’
Financial leaders traveling with President Trump to Saudi Arabia noted that investors may be waiting for more trade certainty before they hop back into private markets.
Yahoo Finance’s David Hollerith reports:
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US confirms 10% universal tariffs on imports will stay
The US has confirmed that its 10% universal tariff on imported goods will stay in place — for now. Trade Representative Jamieson Greer said talks are ongoing with countries like China, the UK, and Switzerland to ease some of the extra Trump-era tariffs.
Reuters reports:
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China’s adjustment to US tariff rates starts May 14
China’s finance ministry said its 90-day pause on retaliatory tariffs on US goods will begin Wednesday, May 14, at 12:01 p.m. ET.
Reuters reports that the ministry will reduce the 34% duties on US imports to 10%. Those duties were first implemented on April 4 in response to President Trump’s “Liberation Day” tariff program.
The ministry also said it would cancel the additional 91% rate in two later rounds of measures.
“The significant reduction in bilateral tariffs between China and U.S. aligns with expectations of producers and consumers in both countries, and is conducive to economic and trade exchanges between China and the U.S. and to the global economy,” a statement said.
Read more here.
Consumer prices increase less than expected in April amid tariffs
Yahoo Finance’s Josh Schafer reports:
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The 1977 law Trump is using to justify tariffs — and the court battle to stop him
Yahoo Finance’s Alexis Keenan reports:
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Consumer inflation report to give first look at impact of tariffs
Yahoo Finance’s Josh Schafer reports:
April’s Consumer Price Index (CPI) is expected to show the first clear signs of inflationary impacts from President Trump’s tariffs.
The report, set for release at 8:30 a.m. ET on Tuesday, will greet investors less than 24 hours after markets soared on news the US and China have placed a 90-day pause on a wide swath of tariffs between the two countries.
“We expect the first signs of tariff related inflation to show up in the April CPI released on Tuesday,” UBS chief economist Jonathan Pingle wrote in a note to clients on Monday. …
In the CPI report, headline annual inflation is forecast to come in at 2.4% in April, flat from March’s increase. On a month-over-month basis, prices are estimated to rise 0.3%, above the 0.1% decline seen in March.
On a “core” basis, which strips out the more volatile food and energy costs, CPI is expected to have risen 2.8% over the past year in April, unchanged from the month prior when core inflation hit its lowest level in four years. Meanwhile, monthly core price increases are anticipated to rise 0.3%, ahead of March’s 0.1% rise.
While there will be signs of tariff-related inflation in Tuesday’s report, economists argue the full brunt of the new policies’ impact on inflation likely won’t be seen for several months.
Read more here.
Chinese rare earth firms ask for official clarity on US exports
Bloomberg News reports:
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Honda and Nissan struggle amid US tariffs
Honda (HMC) is facing a $3 billion profit hit due to US tariffs, lowering its profit forecast for the upcoming year. The company is also grappling with slow electric vehicle growth, making future projections difficult.
Nissan (NSANY), in a similar situation, is slashing 15% of its workforce, about 20,000 jobs, and reducing its plants from 17 to 10 as part of its recovery plan. This comes after a significant loss for the past fiscal year, exacerbated by the US tariffs.
Both automakers are under pressure from rising costs and weak sales, with Honda considering increased US production and Nissan focusing on cost cuts to regain profitability.
The tariffs’ impact is widespread, with GM (GM), Ford (F) and Toyota (TM, 7203.T) also reporting profit declines. Both companies are adapting their strategies to cope with the ongoing trade challenges.
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