U.S.-China Tariff Truce Saves Christmas Retail Season

May 14, 2025 -- Today's top stories: U.S.-China Tariff Truce Saves Christmas Retail Season, China Courts Latin America to Counter Trump’s Trade Blitz, and Record-Breaking Rush into Japan Assets.

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By CommonWealth Magazine
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2025-05-14

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U.S.-China tariff reprieve is enough to get products on the shelves in time for Christmas

The U.S. and China have announced that they will be ending most of the tariffs announced in recent weeks, addressing a major pain point: Christmas presents. Nearly a fifth of U.S. retail sales last year came from the Christmas holiday season, and the period saw a 4% year-on-year sales increase to a record $994.1 billion.

The two global superpowers' sudden doubling of tariffs in early April forced some businesses to halt production, raising questions about whether supply chains would be able to resume work in time to get products on the shelves for Christmas.

The U.S. said it would cut back the new duties from a punishing 145% to 30%.

China likewise agreed to lower its retaliatory tariffs on U.S. products to 10% and committed to unspecified changes to other trade barriers.

The shock of the 145% tariffs had raised the threat of empty shelves during the critical November and December festive season.

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China presents a united front with Latin America, aiming to counter Trump's trade war

(Source: Reuters)

Chinese President Xi Jinping has called for countries to stand together to promote global peace and stability, stressing that "there were no winners in tariff wars" in a veiled reference to the U.S. In his first public remarks since U.S.-China trade talks over the weekend, Xi told leaders from Latin America and the Caribbean that "bullying or hegemonism only leads to self-isolation."

China is moving to strengthen its alliances with other countries as a counterweight to U.S. President Donald Trump's trade war, presenting a united front with Latin American leaders at an event Tuesday in Beijing.

China's leaders have positioned the world's second-largest economy as a reliable trade and development partner, in contrast to the uncertainty and instability from Trump's tariff hikes and other policies. Two-thirds of Latin American countries have joined Beijing's trillion-dollar Belt and Road Infrastructure program, and China has surpassed the U.S. as the biggest trading partner of Brazil, Peru, and Chile, among others.

The forum between China and the 33-member community of Latin American and Caribbean States (CELAC) formally began on Tuesday.

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Global investors bought record US$55B of Japan stocks, bonds in April

(Source: Reuters)

International investors bought a record amount of Japanese equities and bonds in April, marking the biggest monthly rush for Japanese assets since comparable records began in 2005, and over three times higher than the 20-year average for April.

The unprecedented buying spree involved US$25.5B net purchases of equities, the biggest amount since April 2023, and US$31.5B of long-term bonds, the largest since July 2022.

The total had probably been boosted by purchases of Japanese government bonds by the reserve managers of global central banks.

The bond purchases in April were the second highest in data going back to 2005, while inflows into stocks were the third largest.

Fueling the inflows into Japanese assets was uncertainty created by U.S. President Donald Trump's sweeping tariffs and his attacks on U.S. Federal Reserve Chair Jerome Powell's handling of interest rates.

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The CommonWealth English daily news digest is a service curated by the CommonWealth English team with the help of AI tools.

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