In 2025, the US-China trade war heated up: China called for the removal of unilateral tariffs in order to facilitate dialogue.

Taiwan • Business • 05/02 03:05
In 2025, the US-China trade war heated up: China called for the removal of unilateral tariffs in order to facilitate dialogue.

On May 2, 2025, China's Ministry of Commerce announced it is evaluating the United States' willingness to enter into dialogue, reiterating that the U.S. must remove unilateral punitive tariffs as a precondition for negotiations. The U.S. has imposed tariffs of 145% on Chinese goods, and China has retaliated with tariffs of 125%, resulting in a decline in U.S. exports to China, impacting 860,000 jobs, with the agricultural sector hit hardest. Trade tensions between the two countries are escalating, with growing calls for dialogue and tariff cuts.

Key Updates

05/02 15:30

American Companies Face Tariff Strain: Apple's Costs Skyrocket, McDonald's Sales Decline, The Business Community Urges Policy Changes

The United States has imposed high tariffs on China and other trading partners, resulting in cost pressures for businesses and sluggish consumer demand. Apple estimates an increase of $900 million in costs next quarter due to the tariffs, while McDonald's same-store sales have dropped 3.6% for two straight quarters. The business community is urging the creation of a tariff exemption mechanism to prevent economic harm, with more than 180 companies having submitted exemption requests. The Trump administration's exemption process is lacking in transparency, and the business sector is demanding clearer policy responses.

05/02 09:03

U.S. Tariff Policies Impact SHEIN and Temu Severely: Rising Prices, Supply Chain Restructuring, and Drop in App Rankings

Starting May 2, 2025, the United States will remove the tax exemption for small parcels valued under $800 from China and impose an import tax of up to 120% or a fixed tax of $100 per package, having a significant impact on Chinese cross-border e-commerce platforms SHEIN and Temu. The prices of goods on both platforms have risen by 40% to 100%, leading Temu to shift to a local warehouse model and nearly eliminate direct shipments from China. A reduction in advertising has caused a drop in app store rankings. This policy change is forcing consumers to switch to local platforms, altering their shopping habits.

05/02 05:02

Yiwu businesses are turning to South American and Middle Eastern markets: The US-China trade war has severely damaged the US toy supply chain

Amid the US-China trade war and tariff pressures, exporters in Yiwu in Zhejiang, China, have shifted their focus away from the US towards South American and Middle Eastern markets, which has impacted the US toy supply chain. Exports from Yiwu to the US have significantly decreased, and merchants such as Hu Tianqiang and Lin Xiupeng have adjusted their strategies. The US toy industry faces supply disruptions and rising costs as companies like Hasbro and Spin Master seek to diversify their supply chains, though challenges persist.

05/02 05:02

From China, the US has ended the tariff exemption for low-value parcels, though challenges in implementation remain.

On May 2, 2025, the United States terminated the tariff exemption for low-value import packages from China and Hong Kong, ending the "de minimis" system. This policy change occurred due to accusations by the Trump administration against China's trade practices and drug smuggling, affecting e-commerce platforms such as Shein and Temu. Even though the policy has taken effect, the U.S. Customs and Border Protection is facing challenges in implementation, including complex customs procedures and inadequate logistics handling capacity, revealing systemic bottlenecks.

05/02 04:31

Trump Closes Tax Loophole for Chinese Goods: Online Shopping Costs Increase for American Consumers

Former President of the United States, Donald Trump, ended the de minimis tax exemption rule applicable to China and Hong Kong at the end of April 2025. The rule allowed low-cost goods to enter the U.S. market tax-free. This move was intended to protect American manufacturing and small businesses. However, it results in higher online shopping costs and delivery delays for consumers. Chinese e-commerce platforms like Shein and Temu are affected, resulting in higher product prices. The policy has drawn international attention, as the UK and the EU consider similar measures.

05/02 03:05

In 2025, the US-China trade war heated up: China called for the removal of unilateral tariffs in order to facilitate dialogue.

On May 2, 2025, China's Ministry of Commerce announced it is evaluating the United States' willingness to enter into dialogue, reiterating that the U.S. must remove unilateral punitive tariffs as a precondition for negotiations. The U.S. has imposed tariffs of 145% on Chinese goods, and China has retaliated with tariffs of 125%, resulting in a decline in U.S. exports to China, impacting 860,000 jobs, with the agricultural sector hit hardest. Trade tensions between the two countries are escalating, with growing calls for dialogue and tariff cuts.

05/01 18:32

April manufacturing data from the U.S. affects expectations for a rate cut, U.S. bond market falls.

In April, U.S. manufacturing activity shrank less than anticipated, as the ISM manufacturing index dropped to 48.7, surpassing the forecast of 47.9, prompting a revision in market expectations for a Federal Reserve rate cut this year. U.S. Treasury yields bounced back from their lows, with the 10-year Treasury yield rising to 4.208%. Federal funds futures suggest the likelihood of a June rate cut has dropped to 58%. This shift highlights the market's sensitivity to economic data and how policy expectations affect the bond market.

05/01 18:01

Microsoft is raising Xbox prices to $380 for the Series S and $600 for the Series X due to the trade war and increased development costs.

On May 1, 2025, Microsoft announced a price increase for the Xbox Series S and Series X consoles, accessories, and some games, effective immediately. The Series S has risen to $380, and the Series X has risen to $600. Prices for accessories like wireless controllers and headsets have also increased. Microsoft stated that the price adjustment is due to market conditions and rising development costs, affected by trade wars and supply chain pressures. This move makes Microsoft the latest company, after Sony and Nintendo, to adjust gaming hardware prices.

05/01 17:01

In April 2025, the US manufacturing PMI index fell to 48.7, indicating a continued contraction.

In April 2025, U.S. manufacturing activity further contracted, with the ISM Manufacturing PMI dropping from 49.0 in March to 48.7, staying below the 50-point mark for the second month in a row, signaling a contraction. Even though there was a slight improvement in new orders and employment, the decline in output, rising price pressures, and fewer export orders highlight multiple challenges. Uncertainty around tariff policies and supply chain bottlenecks are adding to the pressures on businesses.

05/01 17:01

Decline in U.S. Retail Performance in Q1 2025: Pressure from Tariff Policies Affects Consumer Confidence

In the first quarter of 2025, the annual U.S. GDP rate declined by 0.3%, marking its first contraction in three years, mainly due to a surge in imports and the effects of tariff policies. Financial reports from brands such as McDonald's, Harley-Davidson, and Estée Lauder indicate declining sales and weakened consumer confidence. The U.S. imposed tariffs as high as 145% on Chinese goods, resulting in a surge in imports and a record trade deficit. The consumer confidence index dropped to its lowest point since the pandemic, highlighting the adverse effects of tariff policies on the economy.

China's Assessment of U.S. Willingness for Dialogue, Reaffirms Stance on Removing Unilateral Tariffs

On May 2, China's Ministry of Commerce announced that it has observed that U.S. high-level officials have recently expressed a desire to negotiate with China on tariff issues through various channels. A spokesperson for China noted that China is conducting a "serious assessment" of this and emphasized that China's stance remains consistent: if the U.S. is sincere about negotiations, it should first correct its erroneous practices and remove the unilaterally imposed tariffs.

China clearly stated that the trade war was unilaterally initiated by the U.S., and if the U.S. says one thing and does another in negotiations, or even attempts to use negotiations as a pretext for coercion and extortion, such methods "will not work" with China. The Chinese Ministry of Foreign Affairs also urged the U.S. to "abandon pressure tactics and return to the negotiating table of equality and mutual benefit," emphasizing that "respect and equality" are prerequisites for dialogue.

U.S. Tariff Pressure Increases, Export Goods Face Up to 125% Retaliatory Tariffs

Since President Trump took office, tariffs imposed on Chinese goods have reached 145%, and China has responded with retaliatory tariffs of up to 125%. According to reports from The Wall Street Journal and Bloomberg, these tariff measures have had a substantial impact on U.S. exporters, with almost all exports to China facing punitive tariffs.

The U.S.-China Business Council pointed out that in 2024, the total value of U.S. exports to China reached $140.7 billion, but under high tariff pressure, the scale of exports has sharply contracted. Council President Sean Stein remarked, "The decline in U.S. exports to China is immediate and real, with businesses, farmers, and workers bearing the consequences of this trade war."

860,000 Jobs Affected, Agriculture Sector Hit First

According to statistics from the U.S.-China Business Council, the U.S. export industry to China supports over 860,000 jobs nationwide, covering key industries such as agriculture, aerospace, semiconductors, education, and tourism. The agriculture sector is the hardest hit among them.

In 2024, U.S. exports of oilseeds and grains to China fell by 18%, dropping to just $15 billion. Although China remains the largest buyer of these U.S. agricultural products, accounting for 31% of global exports, retaliatory tariffs have created export bottlenecks for major crops such as soybeans, wheat, corn, and sorghum.

Among the 41 states exporting agricultural products to China, 34 states experienced a decline in export volume in 2024, with Illinois, Iowa, and Minnesota seeing annual reductions of up to 20%. These states support about 98,000 agriculture-related jobs and are highly sensitive to tariff changes.

Signals from Both Sides, Opportunities for Dialogue Remain

Despite the firm stances of both sides, recent signals from both China and the U.S. suggest the possibility of resuming dialogue. U.S. Treasury Secretary Scott Bessent stated that the cooling of the U.S.-China tariff war "depends on China," and noted that various U.S. government departments have engaged with China, awaiting a response.

Conversely, China stated that the door to negotiations is always open, but the prerequisite is that the U.S. must show sincerity by removing unilateral tariffs. The Chinese Ministry of Commerce emphasized that if the U.S. continues to exert pressure under the guise of negotiations, it will further damage mutual trust.

Additionally, China has quietly implemented tariff exemptions on some U.S. goods, including ethane, certain semiconductors, and pharmaceuticals, indicating that while maintaining a firm stance, China is also seeking to reduce economic impact.

Agriculture and Business Sectors Call for Resumption of Dialogue

Facing declining exports and employment pressure, the U.S. agriculture and business sectors are calling on the government to promptly resume dialogue with China. The American Farm Bureau and several farmer groups highlighted that the trade war's damage to agriculture has reached a critical point, and if tariffs persist long-term, hundreds of thousands may lose their jobs, and tens of billions of dollars in export revenue could be lost.

Farmers from Washington, Texas, and Iowa stated that retaliatory tariffs not only affect agricultural exports but also increase the import costs of agricultural machinery and parts, further compressing profit margins.

The U.S.-China Business Council urged Washington and Beijing to resume dialogue as soon as possible, seeking mechanisms to reduce or eliminate tariffs to prevent the trade war from causing more profound harm to the U.S. economy.

References

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