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Introduction: China ‘considering exempting some goods from US tariffs’
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
This morning, there are renewed hopes that China may ease certain tariffs placed on US goods during the ongoing trade conflicts initiated by previous US administrations.
With Chinese businesses grappling with the economic repercussions of the trade war, the Chinese government appears to be looking for ways to minimize the adverse effects of this protracted conflict.
According to Bloomberg, officials in China are weighing the possibility of suspending a steep 125% tariff on select US imports, indicating rising concerns about the damage inflicted by the trade dispute with the United States.
Bloomberg reports:
Government officials are considering the removal of extra tariffs on medical equipment and certain industrial chemicals, including ethane, sources indicate, preferring to remain anonymous due to the sensitivity of the discussions.
Additionally, there is ongoing dialogue regarding the potential exemption of tariffs on aircraft leases, which are critical for many Chinese airlines that do not own all their planes outright and face insurmountable costs due to the additional tariffs.
China is considering suspending its 125% tariff on some US imports including medical equipment, ethane and plane leasing, sources say https://t.co/Uf9NNQnLAz
— Bloomberg (@business) April 25, 2025
The potential for this tariff adjustment surfaces in the wake of discussions, as Donald Trump disclosed that talks between the US and China are underway to seek resolution to the trade disputes.
The US president mentioned to the media:
“We may reveal it later, but they had meetings this morning, and we’ve been meeting with China.”
Reuters also adds that China is soliciting input from businesses on which US imports might be considered for tariff exemptions.
A taskforce within the Ministry of Commerce is gathering lists of products that could potentially be exempted from tariffs and is reaching out to companies to submit their requests, according to insiders.
Such signs of a potential easing of tensions in the trade war would likely be welcomed by investors, who have faced volatility in the wake of the introduction of Trump’s tariffs on various trading partners.
This development could also alleviate concerns among global political and economic leaders who are wary of a downturn in international trade.
As noted by Andrew Bailey, governor of the Bank of England, the UK economy may experience a “growth shock” stemming from the ramifications of US trade policies.
The agenda
7am BST: UK retail sales report for March
9.30am BST: UK trade data for Q4 2024
3pm BST: University of Michigan’s survey of US consumer confidence
3pm BST: IMF holds press conference on the economic outlook for Europe
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Updated at 08.27 CEST
Key events
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UK retailers post largest three-monthly rise in sales volumes since July 2021
In the UK, retail sales exceeded expectations last month, providing a positive indication for economic performance this year.
Retail sales volumes across Great Britain posted a 0.4% increase in March, as reported by the Office for National Statistics, marking a surprise to economists who anticipated a 0.4% decline.
The ONS indicated that favorable weather conditions contributed to boosted sales for clothing and outdoor retailers, although this was somewhat counterbalanced by a decline in supermarket sales.
The recent good weather helped to boost sales across a variety of sectors, with garden centres reporting robust trading, and the sunshine also helped to improve sales of DIY goods and clothing.
However, it was another poor month for food sales, particularly within supermarkets. pic.twitter.com/0DMtMtpkvU
— Office for National Statistics (ONS) (@ONS) April 25, 2025
The growth in March follows a revised increase of 0.7% in February, down from an initial estimate of 1.0%.
In total, retail sales volumes have risen by 1.6% over the first three months of 2025 compared to the previous quarter, marking the most significant three-month increase since July 2021 and suggesting that consumer spending is holding steady this year.
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FT: Apple aims to source all US iPhones from India in pivot away from China
The ongoing US-China trade tensions are prompting companies to reassess their supply chains.
Apple, in particular, is reportedly making significant shifts away from China, which would substantially alter its supply chain strategy.
The Financial Times reports that Apple intends to transfer all iPhone manufacturing for the US market to India by as early as the end of 2026, potentially doubling production capacity in India.
The FT elaborates:
In recent years, Apple has been expanding its operational footprint in India through partnerships with contract manufacturers like Tata Electronics and Foxconn, although it continues to rely heavily on Chinese suppliers for the majority of its smartphone manufacturing.
Final assembly of iPhones remains the last step in the production chain, necessitating coordination of hundreds of components, many of which are still sourced from China.
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Markets cheered by hopes of US-China de-escalation
Stock markets in the Asia-Pacific region experienced an uptick today following reports that China may reconsider its stringent 125% tariffs on certain US imports.
The Hang Seng index in Hong Kong climbed by 1%, and South Korea’s KOSPI also witnessed a 1% rise.
Japan’s Nikkei index increased by 1.8%, while China’s CSI 300 index saw a modest gain of 0.2%.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noted that the signs of reduced trade tensions have forged a more optimistic market outlook.
Recent developments allowed global risk investors to regain their composure, with supportive comments from members of the Federal Reserve, alongside easing conflicts between the US and China, contributing to a broader recovery in equity markets.
Optimism was bolstered by China’s announcement regarding the consideration of tariff reductions on select US imports, reinforcing earlier statements from the Trump administration suggesting that high tariffs might see significant reductions in the near future.
Source
www.theguardian.com