Weekly Market Round-Up (April 27 - May 3, 2025): 7 Key Updates from US-China Trade War

As the U.S.–China trade conflict intensifies, ripple effects are being felt across global supply chains, consumer markets, and economic forecasts. From new tariffs to manufacturing slowdowns, here are seven major developments from the past week that are reshaping the global trade landscape.

Key US-China Trade War Developments

1. China Evaluates U.S. Proposal for Trade Talks

Beijing confirmed it is reviewing a U.S. offer to resume trade negotiations. However, China remains firm in demanding the removal of punitive tariffs—some reaching 145%—before formal talks can begin. The lack of immediate progress signals that any resolution remains distant.

2. U.S. Ends "De Minimis" Loophole, Raising Consumer Costs

The U.S. terminated the "de minimis" rule that previously allowed goods under $800 to enter duty-free. E-commerce platforms like Shein and Temu are among the hardest hit, as U.S. consumers now face longer delivery times and higher costs.

3. Sharp Drop in Imports Hits U.S. Ports

Import activity at major ports like Los Angeles is plummeting, with volumes from China expected to drop 35%. Retailers are scaling back shipments due to tariffs, causing concern over supply chain disruptions and potential job losses in logistics and retail sectors.

4. China’s Semiconductor Dependency Revealed

Despite ambitions to become self-reliant, China remains heavily dependent on U.S. automotive chips. In a strategic move, certain U.S.-made chips were exempted from China’s counter-tariffs, highlighting ongoing vulnerabilities in its tech supply chain.

5. Companies Announce Price Hikes

Retailers and manufacturers, including Walmart, Ford, and Shein, have begun raising prices in response to higher import costs. This development is expected to directly impact American consumers, potentially fuelling inflationary pressures.

6. U.S. GDP Contracts Amid Trade Headwinds

The U.S. economy shrank by 0.3% in Q1 2025, the first contraction in three years. Analysts point to inventory buildups, a decline in exports, and cautious consumer behaviour as key contributors—many of which are linked to the tariff escalation.

7. China's Manufacturing Sector Slows

Chinese manufacturing activity continued to decline in April, reflecting weakening overseas demand and rising uncertainty. Industries tied to exports—especially electronics and consumer goods—are reporting slower output and growing financial strain.

Conclusion

The trade war between the U.S. and China is entering a volatile new phase, with immediate consequences for businesses, consumers, and economies on both sides of the Pacific. While diplomatic efforts are being hinted at, the road to resolution remains uncertain—and the global market is bracing for further turbulence.