American customers of fast-fashion giant Shein are now feeling the impact of the trade war. Shein raised the US prices of a swathe of products on Friday, Bloomberg reported, in anticipation of new tariffs on small parcels. Over to Bloomberg for the details: The average price for the top 100 products in the beauty and health category increased by 51% from Thursday, with several of the items more than doubling in price. For home and kitchen products and toys, the average jump was more than 30%, led by a massive 377% increase in the price of a 10-piece set of kitchen towels. For women’s clothing the rise was 8%. This follows Donald Trump’s decision to end the “de minimis” exemption for small packages from mainland China and Hong Kong. which had meant that packages under $800 did not qualify for any taxes or tariffs. China’s policymakers are insisting today that they will hit this year’s growth targets, despite the impact of Donald Trump’s tariffs. The vice head of China’s state planner said on Monday he was “fully confident” that the world’s second-largest economy would achieve its economic growth target of around 5% for 2025. Zhao Chenxin, vice chair of the National Development and Reform Commission, told a press conference that new policies will be rolled out over the second quarter, based on changes in the economic situation. Zhao said: “The achievements of the first quarter have laid a solid foundation for the economic development of the whole year. No matter how the international situation changes, we will anchor our development goals, maintain strategic focus and concentrate on doing our own thing.” Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Donald Trump’s trade war is weakening the US economy and causing a plunge in trade with China, economists and logistics firms are warning. Nearly four week’s after Trump’s ‘Liberation Day’ announcement of higher tariffs triggered a trade war with Beijing, evidence is mounting that businesses and consumers are cutting back. Torsten Sløk, chief executive at asset manager Apollo Global Management, explains: For companies, new orders are falling, capex plans are declining, inventories were rising before tariffs took effect, and firms are revising down earnings expectations. For households, consumer confidence is at record-low levels, consumers were front-loading purchases before tariffs began, and tourism is slowing, in particular international travel. Sløk has pulled together a chartbook highlighting the damage to company earnings… …on new orders… …and notably on trade with China. A trade war is a “stagflation shock”, Sløk fears. He explains that it typically takes between 20 and 40 days for a sea container to travel from China to the US. That means that the slowdown in container departures from China to the US which started in early April will be felt at US ports in early and mid-May. That would hit demand for trucking from mid-May, leading to empty shelves and layoffs in trucking and retail industry, causing what Sløk dubs “The Voluntary Trade Reset Recession”. Sløk warned on Friday: In May, we will begin to see significant layoffs in trucking, logistics, and retail — particularly in small businesses such as your independent toy store, your independent hardware store, and your independent men’s clothing store. With 9 million people working in trucking-related jobs and 16 million people working in the retail sector, the downside risks to the economy are significant. There are signs today that this trade slowdown is underway, due to the 145% tariff imposed on Chinese imports to the US. The Financial Times reports this morning that the Port of Los Angeles, the main route of entry for goods from China, expects scheduled arrivals in the week starting 4 May to be a third lower than a year before. The new higher tariffs announced on other countries are currently paused, of course, while the US negotiates new trade deals. Trump has claimed to Time Magazine that he’s made 200 deals. But this appears to be, well, an exaggeration. US Treasury secretary Scott Bessent told ABC News he believes Trump is “referring to sub deals within the negotiations we’re doing.” Bessent insisted, though, that progress is being made, arguing: If there are 180 countries, there are 18 important trading partners, let’s put China to the side, because that’s a special negotiation, there’s 17 important trading partners, and we have a process in place, over the next 90 days, to negotiate with them. Some of those are moving along very well, especially with the Asian countries. Last week, shipping giant Hapag-Lloyd reported that its customers have cancelled 30% of shipments to the United States from China….and there has been a “massive increase” in demand for consignments from Thailand, Cambodia and Vietnam instead. The agenda 11am BST: CBI’s distributive trades survey of UK retailing 11am BST: France’s unemployment data for March 3.30pm BST: Dallas Fed manufacturing index for April
Author: Graeme Wearden