14/05/2025

BIZ & FINANCE WEDNESDAY | MAY 14, 2025

17 US cuts ‘de minimis’ tariff on China goods

UK JOBS MARKET COOLS, OFFERING SOME RELIEF TO BANK OF ENGLAND LONDON: Britain's jobs market showed further signs of a slowdown as employ ment fell and growth in wages cooled, according to official data published yesterday that is likely to reassure the Bank of England (BoE) that inflation pressures are waning. Economists said the figures reflected concerns among employers about a tax increase imposed on them by finance minister Rachel Reeves and over US President Donald Trump's trade war. Provisional tax authority data showed the number of employees fell by 33,000 in April after a 47,000 drop in March. Vacancies fell further below their pre-Covid pandemic level as they fell by 42,000 – the most in more than a year – in the three months to April to 761,000, the Office for National Statistics said. GOLDMAN SACHS LOWERS US RECESSION ODDS TO 35% NEW YORK: Goldman Sachs cut its recession forecast for the US to 35% from 45%, the first major brokerage to do so, after a temporary tariff truce with China boosted hopes of some easing in the global trade war. Goldman also hiked its 2025 US gross domestic product growth forecast by 0.5 percentage points to 1%, it said in a note on Monday. With the growth outlook potentially improving, Goldman now expects a total of three rate cuts from the Federal Reserve in 2025 and 2026. It sees one reduction in December instead of July and the remaining in March and June next year. The brokerage had earlier predicted three rate cuts for this year itself. Citigroup, meanwhile, pushed its expectations for a Fed rate cut to July from June, it said. – Reuters EBRD REVISES ECONOMIC GROWTH FORECASTS AGAIN LONDON: Tariffs, wars and economic worries in powerhouse economies such as Germany and China led the European Bank for Reconstruction and Development (EBRD) to cut its economic growth forecasts for the fourth straight time, the lender said yesterday. In the report, which covers economies in emerging Europe, central Asia, the Middle East and Africa, the EBRD lowered its previous forecast for 2025 made in February by 0.2 percentage points to 3%, with downward revisions across most economies. “Almost no country remains untouched by what’s happening in the world,“ EBRD Chief Economist Beata Javorcik said. “The biggest effect on our countries is indirect via changes in prospects for Germany and China.” The report was compiled before the latest news on the U.S. and China reaching a deal to temporarily slash tariffs. – Reuters De minimis, a legal term referring to matters of little importance which describes the US 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 (RM722). – Reuters 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 yesterday, 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.

commerce firms as well as traffickers of fentanyl and other illicit goods. The number of shipments entering the US 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 US rival Amazon did not immediately respond to requests for comment. In Monday’s order, the White House said the reduced tariffs will take effect today. The plan for a US$200 flat fee duty rate would also be shelved, it said, keeping it at US$100. China exported US$240 billion in direct-to consumer goods benefiting from de minimis

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 US$100 (RM430) to remain, starting from today. The de minimis exemption, for items valued at up to US$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 US$200 – set to come into effect by June – blaming it for being heavily used by companies such as Shein, Temu and other e

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 o White House bolsters broader trade truce, reduces rate on shipments to 54%

Beijing pledges 66b yuan support for Latin America BEIJING: President Xi Jinping vowed yesterday to boost China’s footprint in Latin America and the Caribbean with a new credit line and fresh infrastructure investment, although Brazil warned the region not to become too reliant on foreign funding.

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The world’s second-largest economy will provide 66 billion yuan (RM39.6 billion) in credit to the Community of Latin American and Caribbean States (Celac) members, Xi told delegates from around 30 nations gathered here for the three-yearly China-Celac Forum Ministerial Meeting. “China and the countries of Latin America and the Caribbean are important members of the Global South. Independence is our glorious tradition, development and revitalisation our natural right, and fairness and justice our common pursuit,” Xi said. Xi promised leaders including Brazilian President Luiz Inacio Lula da Silva and Colombian counterpart Gustavo Petro that China would also import more from Latin America and encourage Chinese companies to boost investment. Beijing has stepped up efforts in recent years to displace the United States as the region’s primary development partner, although Xi’s global “Belt and Road” infrastructure initiative has encountered challenges in some countries, such as Panama. The fresh credit line, denominated in yuan, will be welcomed in many regional capitals, analysts say, although the funding is not immediately useful to countries struggling to service dollar-denominated debt. “They are doing a lot more yuan-based deals like this, particularly for credit swap agreements that make it easier for the borrowing country to transact in RMB rather than USD,” said Eric Orlander, co-founder of the China-Global South Development Project.

Xi (left), Petro (centre) and Chile President Gabriel Boric at the opening ceremony of the Fourth Ministerial Meeting of the Forum of China and Community of Latin American and Caribbean States in Beijing yesterday. – REUTERSPIC

Washington to craft a trade package by July after an opening round of negotiations, Seoul said the meeting in Jeju would be an “interim assessment”. “There is scepticism we will see significant progress at the meeting, as there have not been substantive negotiations at the working level,” said Heo Yoon, a professor of international trade at Sogang University in Seoul. To speed up negotiations, Washington and Seoul have agreed to bring all the proposed agendas to one table and discuss them altogether, rather than setting up separate working groups for each, one South Korean official told Reuters. “It is likely the United States will also meet other countries at the gathering, so we will monitor those as we proceed with our own negotiations,“ another South Korean official said. – Reuters and Caribbean states seek to negotiate better trade terms with the United States, following President Donald Trump’s “Liberation Day” tariffs. Xi reiterated China’s opposition to the levies, while the Brazilian President urged the region not to become overly reliant on the world’s top economies. “It’s important to understand, (the fate of Latin America) doesn’t depend on anyone else, it does not depend on President Xi Jinping, it does not depend on the United States, it does not depend on the European Union, it depends solely and simply on whether we want to be great or continue to be small,”Lula said. – Reuters

“I think there is a case to be made that it is a win for Latin America in the sense that getting access to capital is now not as easy as it used to be.” The funding is just under half the amount Beijing offered during the inaugural China-Celac Forum in 2015, although as its US$19 trillion economy has slowed, so has its willingness to lend. Xi also announced visa-free travel would be rolled out to five countries, without specifying which ones. The forum comes as many Latin American

Apec trade envoys to discuss multilateral cooperation SEOUL: Asia-Pacific trade envoys will gather this week in South Korea for discussions on multilateral cooperation, with talks taking place at a time when countries are scrambling to respond to US President Donald Trump’s sweeping tariffs. on broad topics ranging from multilateral trade to revitalisation and sustainability, with the official agenda expected to include the role and reform priorities of the World Trade Organization (WTO) amid current global challenges.

The officials are also expected to discuss other topics such as advancing the free trade area of the Asia-Pacific region, boosting digital trade, ramping up artificial intelligence readiness, and driving sustainable, inclusive growth. On the sidelines of the gathering, US Trade Representative Jamieson Greer is scheduled to hold at least one bilateral trade talk with his South Korean counterpart on Friday. It was not clear who would represent Beijing at the gathering and whether there might be more bilateral meeting with the United States. Reuters has confirmed at least a third of the countries are sending their trade chiefs. In late April, when South Korea agreed with

Trade representatives of 21 member economies of the Asia-Pacific Economic Cooperation (Apec) grouping will attend two days of meetings starting tomorrow in South Korea’s resort island of Jeju, as part of a second round of senior officials’ meetings ahead of an annual Apec leaders summit later this year. The Apec trade envoys gathering comes amid growing protectionism triggered by Trump’s tariffs, which have targeted more than half of the bloc. Apec accounts for about half of global trade and 60% of global gross domestic product. Participants will attend closed-door sessions