"The only option is to try to keep your head above water and be tossed by the waves, or to go out of business," said Anna Barker, whose Mississippi-based firm Glo sells luminous toys designed in the United States and made in China.
She told AFP that the 90-day reprieve beginning Wednesday is just a mere "blip on the radar." Placing orders, manufacturing products and shipping them to the United States takes much longer.
Trump's escalating trade war since his return to office saw US duties on Chinese goods -- including toys -- reach a whopping 145 percent, while Beijing's countermeasures hit 125 percent.
The world's two biggest economies however agreed at talks last weekend in Switzerland to temporarily lower the levies, bringing US tariffs down to 30 percent and China's corresponding duties to 10 percent.
While cautiously optimistic about the ongoing negotiations, Barker warned the 30 percent rate remains "massive for a small company."
Trump has argued that companies will enjoy zero tariffs if they manufacture in the United States, overlooking costs for any machinery or raw materials that would still need to be imported.
"We're an American company," Barker said. "Our biggest priority, if it was just up to us, will always be the US market. But it simply can't be right now."
To stay afloat, she is looking abroad for growth.
- 'Clogged pipeline' -
The pause "may temporarily help unstick" an effective trade embargo since April 9, when steep levies forced many firms to halt imports, said Steve Lamar, president of the American Apparel & Footwear Association (AAFA).
He warned, however, that the residual 30 percent tariff, stacking on duties from past administrations, will "make for an expensive back to school and holiday season."
"The tariffs are still so large that you can't help but pass them along," said KPMG chief economist Diane Swonk.
This means producers, retailers and consumers could all bear some burden, with small businesses hit particularly hard due to their narrower margins.
Freight rates could also surge due to shipping disruptions from the tariffs.
"There's a lot of inventory piling up in factories in China that now need to hit the water," said Josh Staph, chief executive of Ohio-based Duncan Toys Company.
Barker said her company was hurrying to join an "already very clogged pipeline of people racing to shipping ports."
Policy shifts have "triggered both panic and paralysis" among companies, said Swonk.
"Every time they see a window like what we have for 90 days now, they've got to rush," she said. "In that rush, you have a self-fulfilling prophecy that shipping costs are going to go up."
- 'Depressed investment' -
The AAFA's Lamar has called for Trump to strike lasting deals with China and other countries to give businesses more long term certainty.
Without a permanent tariff rollback, the United States will likely continue seeing "depressed investment," said Philip Luck, economics program director at the Center for Strategic and International Studies.
"Firms remain in limbo as they try to plan long-term sourcing and investment decisions," he added.
For Barker's start-up Glo, born of a school project in Mississippi where she and her business partner were college students, the answer for now may be expanding outside the United States.
This means shipping Chinese-made products to countries in Europe or elsewhere, even as it remains based in the southern state with around 30 staff.
"As contrary as it might seem," Barker said, "by shifting our focus international, that is to maintain American jobs."
China, US slash sweeping tariffs in trade war climbdown
Beijing (AFP) May 14, 2025 -
The United States and China slashed sweeping tariffs on each others' goods for 90 days on Wednesday, after a temporary ceasefire in a brutal trade war that roiled global markets and international supply chains.
Washington and Beijing agreed to drastically lower skyhigh tariffs in a deal that emerged from pivotal talks at the weekend in Geneva.
US President Donald Trump said Washington now had the blueprint for a "very, very strong" trade deal with China that would see Beijing's economy "open up" to US businesses, in an interview broadcast Tuesday on Fox News.
"We have the confines of a very, very strong deal with China. But the most exciting part of the deal...that's the opening up of China to US business," he told the US broadcaster while aboard Air Force One on the way to the start of his Gulf tour.
"One of the things I think that could be most exciting for us and also for China, is that we're trying to open up China," he added, without elaborating on details.
Trump had upended international commerce with his sweeping tariffs across economies, with China hit hardest.
Unwilling to budge, Beijing had responded with retaliatory levies that brought tariffs on both sides well over 100 percent.
After billions were wiped off equities and with businesses ailing, negotiations finally got underway at the weekend in Geneva between the world's trade superpowers to find a way out of the impasse.
Under the deal, the United States agreed to lower its tariffs on Chinese goods to 30 percent while China will reduce its own to 10 percent -- down by over 100 percentage points.
The reductions came into effect just after midnight Washington time (0401 GMT) on Wednesday, a major de-escalation in trade tensions that saw US tariffs on Chinese imports soar to up to 145 percent and even as high as 245 percent on some products.
Markets have rallied in the glow of the China-US tariff suspension.
Chinese officials have kept their cards closer to their chests, pitching themselves at a summit in Beijing with Latin American leaders this week as a stable partner and defender of globalisation.
"There are no winners in tariff wars or trade wars," Xi told leaders including Brazil's Luiz Inacio Lula da Silva, while his top diplomat Wang Yi swiped at a "major power" that believed "might makes right".
- 'Risk of renewed escalation' -
Deep sources of tension remain, too -- the US additional tariff rate remains higher than China's because it includes a 20 percent levy over Trump's complaints about Chinese exports of chemicals used to make fentanyl.
Washington has long accused Beijing of turning a blind eye to the fentanyl trade, something China denies.
And while the US said it sees room for progress on the issue, Beijing on Tuesday warned Washington to "stop smearing and shifting blame" onto it.
Analysts also warn that the possibility of tariffs coming back into force after 90 days simply piles on more uncertainty.
"Further tariff reductions will be difficult and the risk of renewed escalation persists," Yue Su, Principal Economist at The Economist Intelligence Unit, told AFP.
Trump's rollercoaster tariff row with Beijing has wreaked havoc on US companies that rely on Chinese manufacturing, with a temporary de-escalation only expected to partially calm the storm.
And Beijing officials have admitted that China's economy -- already ailing from a protracted property crisis and sluggish consumer spending -- is likewise being affected by the trade uncertainty.
"Both sides have endured a good deal of economic pain and they can still endure a little bit more," Dylan Loh, an assistant professor at Singapore's Nanyang Technological University, told AFP.
China swipes at 'bullying' US as it woos Latin American leaders
Beijing (AFP) May 13, 2025 -
China took thinly-veiled swipes at the United States and cast itself as the defender of the multilateral order on Tuesday, as it sought to deepen ties with Latin American and Caribbean leaders at a summit in Beijing.
Promising billions in development credit and increased cooperation, President Xi Jinping told the China-CELAC Forum -- without naming the United States -- that "bullying and hegemony will only lead to self-isolation".
Latin America has emerged as a key battleground in US President Donald Trump's confrontation with China, and the region is coming under pressure from Washington to choose a side.
Two-thirds of countries there have signed up to Beijing's Belt and Road (BRI) infrastructure drive, and China has surpassed the US as the biggest trading partner of Brazil, Peru, Chile and others.
A day after Washington and Beijing dialled down the trade war raging since Trump took office by drastically reducing mutual tariffs for 90 days, Xi cast Beijing as a defender of peace and stability.
"There are no winners in tariff wars or trade wars," Xi said.
"Only through unity and cooperation can countries safeguard global peace and stability and promote worldwide development and prosperity," he said.
The Chinese leader pledged $9.2 billion in loans towards "development", part of a broad set of initiatives aimed at deepening cooperation, including on infrastructure and clean energy.
Beijing will also cooperate in counterterrorism and fighting transnational organised crime, Xi said, as well as enhancing exchanges such as scholarships and training programmes.
Under Monday's agreement announced in Geneva, the United States agreed to lower its tariffs on Chinese goods to 30 percent while China will reduce its own to 10 percent.
The deal marked a major de-escalation between the world's two largest economies which threw global markets into turmoil.
But tensions remain; a 20-percent levy over Trump's complaints about Chinese exports of chemicals used to make fentanyl -- an opioid drug that has killed thousands of Americans -- remains in force.
Beijing's foreign ministry demanded on Tuesday that the US "stop smearing and shifting blame" for the opioids crisis.
- 'Might makes right' -
Also without naming the United States, Xi's top diplomat made clear Beijing's displeasure with Washington as well.
Speaking alongside Latin American counterparts, Wang Yi condemned a "major power" being "obsessed with the idea that might makes right".
He urged Latin American nations to "join hands" with China to defend their rights against a country that is "using tariffs as a weapon to bully other countries".
Wang later called the meeting a "great success" in a press conference and added that the combined "super-large market of two billion people" between China and Latin America would provide new engines for growth for both sides.
Among notable attendees at the forum was Brazilian President Luiz Inacio Lula da Silva, who arrived in Beijing on Saturday for a five-day state visit.
Addressing the delegates, Lula said his region did not "want to repeat history and start a new Cold War".
"Our goal is to be an asset to the multilateral order for a global good, and to be duly represented," he explained.
In talks with his Brazilian counterpart later Tuesday, Xi said the two countries should "strengthen cooperation" and together "oppose unilateralism", according to a Chinese state media readout.
The two countries issued a joint statement saying they "welcome Russian President Vladimir Putin's proposal to start peace talks" with Ukraine, calling direct dialogue "the only way to end the conflict", Chinese state news agency Xinhua said.
Also present at the forum was Colombian President Gustavo Petro, who called for "dialogue between civilisations" that took into account the interests of the region.
Petro has said he intends to sign an accord to join Beijing's trillion-dollar BRI during his visit.
Chilean President Gabriel Boric also told the forum that his country would take a "leap forward in economic relations with China".
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