Tariff Trap US Chokes While China Charges

Good morning, While you sip your weekend chai, the world’s trade chessboard is shifting fast—US tariffs are soaring, importers are gasping, and China is quietly making moves across Asia.

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ECONOMY
Understanding U.S. tariffs on Chinese goods

The U.S.–China trade battle has entered a new phase marked by sky-high tariffs and a maze of regulations that American businesses are scrambling to navigate. On paper, the numbers are jarring: syringes taxed at 245%, lithium-ion batteries at 173%, and toys at 145%. But beneath those figures lies a complex structure of layered duties that vary not just by product, but by material, origin, and timing.

While the Trump administration’s new 125% tariff on Chinese goods makes headlines, many of these levies stack on top of earlier ones — some dating back to Trump’s first term and others expanded under President Biden. Some products like electric vehicles, steel, and aluminium now face multi-layered charges. Meanwhile, critical items like smartphones and laptops dodge the highest tariffs thanks to last-minute exemptions.

Take toys, for instance. Once duty-free, they now carry a 145% import tax — a steep cost for American retailers and families. Syringes, which became political targets due to U.S.-China tensions, now top the tariff chart at more than double their value.

Yet not all goods are hit. Children’s books, for example, remain untouched — classified as “informational materials” and spared from the tariff war.

The true impact lies in the confusion. Importers now face a chaotic puzzle: What’s taxed, what’s exempt, and what falls into a grey zone? It’s no longer just about buying goods — it’s about decoding policy. And as trade lawyers warn, options to mitigate the impact are few. For many companies, it’s a high-stakes waiting game where the price of doing business is anything but predictable.

_{Source: New York Times}

ECONOMY
China races ahead on exports by 12.4%

In a dramatic shift triggered by looming U.S. tariffs, China’s exporters made a fast dash in March, shipping out goods at a 12.4% higher rate than the same time last year. The surge came as Chinese companies rushed to get products across the Pacific before the full weight of President Donald Trump’s latest tariff hike — now as high as 145% on most goods, took effect.

While exports were on the rise, China’s imports told a different story, falling 4.3% for the month and 7% for the quarter, reflecting weakening domestic demand and caution in global sourcing. Yet, China still reported a $76.6 billion trade surplus with the U.S. for the first quarter — an economic flashpoint in the ongoing trade dispute.

Interestingly, as pressure builds from Washington, China’s trade ties appear to be tilting closer to home. Exports to Southeast Asia soared nearly 17% in March, and shipments to Africa grew more than 11%. Vietnam, in particular, became a standout partner — exports to the neighbour surged 17%, even as Chinese imports from Vietnam slipped.

President Xi Jinping’s regional visit — which includes stops in Vietnam, Malaysia, and Cambodia — has taken on new strategic weight amid the shifting trade landscape. While the tour was likely scheduled in advance, it now serves as a visible effort to strengthen regional alliances as global trade winds grow more turbulent.

Back in Beijing, customs official Lyu Daliang sought to reassure markets, acknowledging the “complex and severe” environment but maintaining that China’s vast export network and growing domestic market offer resilience. With China's import share globally rising from 8% to 10.5% over 16 years, officials believe the country still holds strong cards in the global trade game.

Despite the external pressure, the message from Beijing is clear: China isn’t folding — it’s recalibrating.

ENERGY
Goldman flags oil slide till 2026

Goldman Sachs has forecasted a steady decline in oil prices through 2026, citing rising recession risks and increased output from OPEC+. The bank projects Brent crude to average $63 in 2025 and drop to $58 in 2026, while WTI is expected to follow a similar path, hitting $55 in 2026.

The downturn is largely tied to slowing demand growth—only 300,000 barrels per day are expected to be added through 2025, as the ongoing U.S.-China trade war weighs heavily on global trade. Goldman has slashed its demand forecast for late 2026 by 900,000 bpd since March.

With China hitting U.S. imports with 125% tariffs and Trump raising duties on Chinese goods, the escalating tension has sparked fears of broader economic disruption. This, combined with anticipated oil surpluses—800,000 bpd in 2025 and 1.4 million in 2026—could push prices even lower.

In a worst-case scenario of a global slowdown or if OPEC+ reverses its 2.2 million bpd production cuts, Brent could fall below $40 a barrel by 2026, Goldman warns. Meanwhile, the bank has also trimmed its U.S. shale forecast by 500,000 bpd for the end of 2026.