Apple’s iPhone 16 hits Indonesia stores after monthslong ban

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JAKARTA: Handset buyers were cheered by merchants in Jakarta on April 11 after Apple’s latest cellphone went on sale following a monthslong restrictions in Indonesia.

The advertising and sale of phone 16 models was prohibited by the state in October over Apple’s failing to meet legislation requiring that 40 % of laptop components be made from native parts.

But the US tech giant announced last month that its latest cellphone designs had struck the aisles, days after striking a deal with the Indonesian government to invest in the country.

Albert Wongso, 34, told AFP outside the business he was quite happy to learn that the phone 16s were then available in Indonesia.

” I’m really happy to hear from the news because we can get the phone directly from Indonesia”, the IT expert told AFP Friday, adding that he was looking to buy the phone 16 Pro design to replace his phone 11.

” Because if we buy from the other country… it’s quite hard for example to claim the warranty”, he said.

While the ban was in place, the government had allowed iPhone 16 models to be brought into the country, provided they were not being traded commercially.

A win for Apple

Jakarta rejected a US$ 100mil ( RM443.11mil ) investment proposal from Apple in November, saying it lacked the “fairness” required by the government.

The company later agreed to invest US$ 150mil ( RM664.67mil ) in building two facilities – one in Bandung in West Java province to produce accessories, and another in Batam for Air Tags.

Industry Minister Agus Gumiwang Kartasasmita said in February that Apple had also committed to building a semiconductor research and development centre in Indonesia, calling it a” first of its kind in Asia”.

The iPhone 16’s entry into the Indonesian market marks a win for Apple and signalled the economic importance of the country of 280 million people.

” Indonesia is one of the biggest markets for Apple in the Asian region apart from China and so on”, said Nailul Huda, director of digital economy at the think tank, Centre of Economic and Law Studies ( CELIOS).

The Indonesian government is considering relaxing regulation of the information and communication technology sector ahead of talks with the United States over President Donald Trump’s tariffs.

Chief economic minister Airlangga Hartarto is set to lead a delegation to Washington this month in the hope of striking a better deal after Trump announced a 90-day pause on the harshest tariff against US trading partners.

Indonesia has also banned the sale of Google Pixel phones for failing to meet the 40 % local parts requirement. &nbsp, – AFP

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Trump has no monopoly on trying to restore vanished factory jobs – Asia Times

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The first ten days of April have seen the United States single-handedly rewrite the underlying paradigm for global trade – but while it is fair to say that the methods are extreme, the underlying goal of the policy is not unique to the US.

Indeed, the push to support, and expand, domestic manufacturing through policy intervention is experiencing a resurgence not seen since the 1970s.

Many people believe the COVID pandemic exposed weaknesses in global supply chains. In reality, the pandemic simply accelerated an existing trend of slowing of integration.

Growing concerns around trade wars and risks from climate shock existed prior to COVID with both policymakers and firms rethinking globalisation strategies.

Countries were also becoming concerned about the manufacturing dominance of China and the potential weaponisation of economic activity.

The risks of rising concentration

The expansion of international trade has led to massive efficiencies in production.

But it has also led to concentration of certain sectors in certain regions. Examples include software development in Silicon Valley, semiconductor manufacturing in Taiwan and critical minerals processing in China.

This geographic concentration started to raise concerns for many countries. Reasons include climate events disrupting supply chains, pandemics and increasingly, geopolitical concerns.

In response to the rise in economic concentration, countries as diverse as Japan, South Korea, the European Union, India, Brazil and the US introduced policy actions to promote or return certain critical sectors to domestic production.

Australia’s Future Made In Australia plan is a prime example of this.

Trade disruptions

Even before the Trump tariffs, the US and other countries were alarmed by China’s control over key manufacturing sectors and its associated ability to disrupt trade and commerce.

Australia experienced this first-hand when China imposed significant tariffs on wine and barley in response to Australia’s call for a Covid inquiry.

China’s willingness to use its economic position was demonstrated on Friday when it announced not just retaliatory tariffs, but export restrictions on seven categories of rare earth minerals. These are critical to strategic US sectors affecting companies like Apple and defense contractor Lockheed Martin.

Government support on the rise

This shift to increased economic resilience through self-reliance has led to a big surge in government intervention through industrial policies.

The objective of industrial policy is to target certain sectors in order to change the structure of economic activity within a country. It uses government policy to promote investment in sectors deemed under-served by markets.

While all countries have used some level of industrial policy, historically it was mainly confined to developing economies. It has been used sparingly since the 1970s. Between 2009 and 2017, the total number of industrial policies used by countries was less than 200.

Between 2017 and 2023 the use of industrial policy increased nine-fold. In 2023, there were roughly 2,500 industrial policy interventions put in place with two-thirds introduced by advanced economies. Almost 48% were concentrated in three: China, the EU and the US.

Intervening in markets

Generally, industrial policy has been out of favor with mainstream economists. It is very hard to get right as it relies on an in-depth knowledge of industries as well as an ability to predict the future.

Providing funding for one sector means less funding available for others. This could undermine new technologies or other as-yet unseen opportunities. It involves shifting resources from existing, efficient uses to less efficient uses.

It rarely works. A prime example: the many countries that have spent billions of dollars trying to recreate their own domestic Silicon Valleys with no success.

However, Trump is trying to do just that, on an economy-wide scale, mainly through tariffs. The tariffs announced also imply the US will go it alone. The approach takes fragmentation to a new level, where bilateral negotiations are the name of the game.

Shifting global alliances

Meanwhile the response from other nations such as Canada, Southeast Asian economies and even Europe is to diversify and form new alliances without the US.

Indeed, the Canadian Prime Minister’s first trip overseas was not, as tradition dictates, to the US, but to Europe and the UK, which he dubbed “reliable” partners.

Becoming more isolated and pushing other countries to China may not be what the US intends, but it is happening.

Last week, Japan and South Korea announced a joint strategy with China to promote regional trade. The EU’s trade representative went to Beijing shortly after the tariff announcement where the two nations announced plans to “deepen trade and investment” ties.

The risks of highly integrated supply chains in the face of security concerns, or changes in a trading partner’s domestic policy, have become glaringly clear.

How countries choose to address these concerns, especially through the widespread use of industrial policy, will create further disruption to markets. While it is considered politically expedient for security concerns, this will raise prices and limit choice in domestic markets. As the old adage reminds us, there is no free lunch.

Susan Stone is the Credit Union SA chair of economics at the University of South Australia.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Indian economy: Will trade-shy India gain edge in tariff-driven slowdown?

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Biswas, Soutik
Reuters A man reads a newspaper outside the Bombay Stock Exchange (BSE) after Trump's tariff plan announcement, in Mumbai, India, April 4, 2025Reuters

India’s big business is the fifth-largest and fastest-growing in the world.

However, a recent legacy of protectionism and inward-focused business plans has hampered its ability to compete globally.

Its tariffs are high and the share of global exports remains under 2%. India’s vast domestic market has fuelled its growth – outpacing many others, economists argue, largely because the rest of the world is slowing. But in a turbulent, increasingly protectionist era, India’s instinct for self-reliance may oddly serve as a short-term shield.

India’s comparative separation may have helped it weather surprises that have jolted more trade-dependent markets as nations scramble to adjust in response to shifting US business procedures, such as Donald Trump’s most recent 90-day tax wait after weeks of sabre-rattling.

” India’s lessening exposure to the international goods trade may benefit us.” We’ll begin looking stronger by contrast, particularly with our huge domestic market falling back on, according to Rajeswari Sengupta, an associate professor of economics at Mumbai’s Indira Gandhi Institute of Development Research, if export-driven markets slow down under the influence of tariffs and keep growing at 6 %.

” Trade-shy behavior has gained us a competitive edge, but we can’t afford confidence,” he said. India may remain agile and open up more to business slowly and strategically, she adds, in order to capitalize on new options.

Given India’s extended and complex relationship with trade restrictions and taxes, it might not be simple.

AFP A crane loads shipping containers on a truck at the Deendayal Port Authority (DPA) in Kandla in India's Gujarat state on April 5, 2025.AFP

In his book India’s Trade Policy: The 1990s and Beyond, renowned business professional Arvind Panagariya from Columbia University examines the intricate and frequently contradictory development of India’s approach to business.

Industries like fabric and iron and steel fought for and received great levels of protection during the interwar years. Due to World War Two’s persistent shortages, trade regulations were made yet more stringent, enforced through a sophisticated registration system.

In contrast, Eastern countries like Taiwan, South Korea, and Singapore switched to export-focused tactics in the 1960s and started posting impressive progress levels of 8 to 10 % periodically. India made the decision to double down on trade substitution. As a result, imports as a share of GDP shrank from 10 % in 1957–58 to just 4 % by 1969–70.

By the middle of the 1960s, India had completely outlawed imports of consumer products. This relieved domestic producers of the pressure to increase quality, as well as denying them access to top-notch materials and technology.

In the end, Indian items lost their attractiveness on world markets and imports stagnated. The resulting international trade shortages caused a vicious cycle that suppressed growth by putting also stricter import controls in place. Per capita income increased at a slow rate of only 1.5 % annually between 1951 and 1981.

The moving point occurred in 1991. India removed numerous buy controls and allowed the rupee to decrease in response to the balance-of-payments issue, which gave exporters and domestic producers who were in the market for imports a much-needed increase. Only in 2001, after the World Trade Organization ( WTO ) issued a ruling against it, was import licensing for consumer goods come into effect.

The effect was astounding: between 2002-2003 and 2011-2012, India’s exports of goods and services increased by sixfold, rising from$ 75 billion to over$ 400 billion.

According to Prof. Panagariya, India’s per head revenue increased more in the first 17 times of the 21st Century than it did throughout the entire 20th Century.

However, the business backlash didn’t come to an end.

According to Prof. Panagariya, the introduction of anti-dumping measures to stop exports from the most economical sources was reversed twice in India, once in 1996-1997 and once more since 2018.

” Some post-colonial says like India harbor a sigh of unease that international trade and commerce are brand-new types of colonization. However, some politicians still harbor this attitude, which is unfortunate, says Vivek Dehejia, a professor of economics at Carleton University in Canada.

Reuters Craftsmen work on diamonds inside a diamond processing unit in Surat, India, April 3, 2025. REUTERS/Anushree FadnavisReuters

Some economists contend that Prime Minister Narendra Modi’s Make in India effort, which focused on money and technology-intensive sectors while stifling labor-intensive sectors like textiles, has been undermined by a decade of protectionist policies. In consequence, the program struggled to make significant increases in both domestic and export.

Europeans won’t have the earnings to pay for the goods they purchase from us if they are unable to sell their goods to us. They will have to cut back on ours if we cut back on their products, according to Prof. Panagariya.

Additionally, favoritism has been suggested as a result of this protectionism.

According to Viral Acharya, a professor of economics at New York University Stern School of Business, “tariffs have created isolationism in some American industries, disincentivizing investments in effectiveness by cosy incumbents and allowing them to rapidly gain market power by building up focused positions.”

Countries in the European Union are looking for trustworthy trade partners, and India might be one of them as the US is under increasing pressure. According to economists, India must cut its tariffs, increase export competition, and show its willingness to open up global trade in order to capitalize on this situation.

Particularly for the medium and small-scale sectors, sectors like clothing, textiles, and toys offer a golden opportunity. The big question is, however, can they scale up after a decade of stagnation, and will the government support them?

According to an estimate from the Global Trade Research Initiative ( GTRI), a Delhi-based think tank, if Trump implements his tariff plans after the current pause, India could experience a 7.76bn or 6.4 % drop in exports to the US this year. India exported$ 89 billion worth of goods to the American market in 2024.

According to Ajay Srivastava of GTRI,” The Trump tariffs are anticipated to hit India’s merchandise exports to the US mildly.”

He emphasizes the need for India to expand its trade base in the wake of the US’s recent agreement to achieve a balanced trade balance. Along with strengthening ties with China, Russia, Japan, South Korea, and Asean, there are also fast-tracking agreements with the EU, the UK, and Canada.

At home, real impact hinges on reforms: simpler tariffs, a smoother goods and services tax (GST), better trade processes and fair implementation of quality controls. Without these, India risks missing the global moment.

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Lingering resentment at unequal treaties stiffens Chinese resolve – Asia Times

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Donald Trump has partially walked back on his so-called “liberation day” tariffs on nearly all US imports after fears mounted that the move would result in a global recession and much higher borrowing costs for the US government. On Wednesday, April 9, a mere 13 hours after his higher rate of “reciprocal tariffs” had come into effect, Trump announced they would be paused for 90 days.

“I thought that people were jumping a little bit out of line, they were getting yippy, you know … a little bit afraid,” Trump said to reporters outside the White House. Markets soared immediately upon hearing the news.

But at the same time, a volatile new stage in America’s trade war with China has emerged. The White House has excluded China from the pause and has hiked tariffs on all Chinese imports to 125%. This, Trump says, is because Beijing has shown “disrespect” to Washington and global markets.

Beijing, which has declared it will “fight to the end if the US side is bent on going down the wrong path”, was quick to respond. It has announced duties of 84% on American products and services, and has even floated the possibility of banning the import of Hollywood films.

What China’s response has shown is that it is no longer the same country as it was in 2017, when Trump managed to obtain some trade concessions from it by imposing tariffs. Beijing seems more willing to strike back at Washington, as well as showing signs of being more proactive in its response to American measures.

The impact of China’s response has not yet been fully realized, but tariffs have already raised the specter of increased prices in the US. Many of the clothing and consumer electronics that Americans buy are shipped from China. It’s possible that far from boosting Trump’s popularity, these tariffs may eventually end up reversing it.

At a fundraising dinner in Washington, less than a day before he shelved plans to hike tariffs on US trading partners, Trump insisted: “I know what the hell I’m doing.” But his subsequent loss of face in pausing tariffs for other countries may mean he has no option but to double down on a tit-for-tat trade war with China.

China is his administration’s go-to villain, and any delay or reversal in responding to Chinese retaliation will be a humiliation to Trump’s strongman image. This suggests a tumultuous period ahead for relations between China and the US.

Expect more hostility

The tariffs will probably have a mobilizing effect on the Chinese population. A 2022 survey on public opinion in China found that people born after 1990 are more likely than previous generations to hold an unfavorable view of the US. The survey concluded that Trump’s actions during his first term were much more to blame than propaganda.

Beijing has also traditionally invoked the history of the “unequal treaties” forced upon its ailing Qing dynasty in the late 19th century as a means to mobilise its population against western policies. This has been aided by how the economic demands made by Trump to China are, in the mind of the Chinese leadership, reminiscent of the demands made by the western powers of that period.

Fears of again falling prey to foreign powers play a significant role in Beijing’s policies, encapsulated by what is known as China’s “never again mentality.” This mentality could be used as a means to unify the Chinese population against an outside enemy in a way similar to how many US politicians have attempted to cast China as a foe.

Beijing appears to be banking on the Chinese population’s supposed ability to withstand greater hardships than Western consumers as being able to give it a key advantage over Washington. However, with China’s prosperity being a comparatively recent development, this ability will be put to the test.

Trump’s tariffs against traditional American allies will also play into Beijing’s hands on the international stage. Tokyo has discussed reducing its holdings of American treasuries, while simultaneously bolstering trade ties with China. These moves would have been unthinkable even a year ago – Japan has long been a key US ally and a regional rival of China.

Equally unthinkable is the possibility that the EU will follow a similar path. Spain’s prime minister, Pedro Sanchez, has called on Brussels to review its relationship with China. Moves aimed at sidelining China may end up isolating the US instead.

And, perhaps most concerningly, the tariffs may also undermine America’s ability to prevent a Chinese invasion of Taiwan. One of the key factors deterring an invasion was the threat of a 100% tariff on Chinese goods. With Trump’s tariffs on China already exceeding this, Beijing has less incentive to not go after Taipei.

What liberation day has shown us is that the Chinese-American relationship has entered a stage of protracted competition, a phase that Beijing has been preparing for over the past decade. Faced with a choice between humiliation on the international stage or economic disaster at home, it would appear neither side is willing to back down.

Tom Harper is a lecturer in international relations at the University of East London.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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US-China trade war: economic fallout and strategic realignment – Asia Times

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The intensifying trade war between the United States and China has moved beyond a bilateral economic dispute, evolving into a global geopolitical confrontation with profound implications for East Asia. The economic fallout from escalating tariffs is expected to have wide-ranging consequences, including the restructuring of global supply chains and a realignment of strategic relationships in the region.

Although the US launched the trade war in an effort to curb China’s economic rise, the outcomes thus far indicate a reversal of those goals – strengthening China’s position in global trade, eroding US influence among key regional allies, and accelerating the shift toward a multipolar order in East Asia.

It is time for Washington to pause and fundamentally reconsider its strategy.

Disruption of the post-war global trading order

The US-China trade war now represents the most significant disruption to the global trading system since the formation of the post-World War II liberal economic order. Triggered by the imposition of steep tariffs – up to 125% by the US and 84% by China – the conflict now affects over $650 billion in bilateral trade, encompassing a wide range of consumer and industrial sectors.

And this may be just the opening salvo. No one can say with certainty where both countries will ultimately end up, as neither side appears willing to back down

Initially intended to rebalance trade flows and counter China’s perceived economic aggression, the trade war has instead generated widespread economic uncertainty and strategic dislocation – especially across East Asia.

The World Trade Organization projects an 80% reduction in US-China trade volumes, sending shockwaves through global markets. The OECD has revised its global GDP growth forecasts downward, predicting 3.1% growth in 2025 and 3.0% in 2026. US economic growth is expected to decline to 2.2% in 2025 and farther to 1.6% in 2026, reflecting not only trade-related headwinds but also rising inflation and waning investor confidence.

Tariffs have driven up import costs, particularly in sectors such as electronics, pharmaceuticals and retail. Financial markets have reacted negatively, with major stock indices experiencing notable declines.

Economic forecasts are becoming increasingly cautious, with growing concerns about the possibility of a recession. These trends point toward a heightened risk of stagflation – a troubling mix of economic stagnation and rising inflation.

Multinational corporations have begun reconfiguring their supply chains, shifting some production to other alternative countries. However, these alternatives lack China’s scale, efficiency, and integration, leaving global supply chains in flux and emerging markets vulnerable to further disruptions. The OECD warns that continued fragmentation could inflict lasting damage on global productivity.

China’s resilience and strategic position

Contrary to US expectations, China has not been economically crippled. As of 2024, it remains the world’s leading trading nation, accounting for 14.5% of global exports – far surpassing the United States’ 8.5%. Exports to the United States make up only 12.3% of China’s total exports, which amounted to almost $3.6 trillion.

This underscores Beijing’s strategic diversification and deep integration into global value chains. US leadership may be overestimating the significance of American imports in sustaining the economic strength demonstrated by the Chinese economy.

China supplies the US with critical goods, including semiconductors, rare earth minerals, and pharmaceuticals. Any further restrictions by Beijing in these sectors would have immediate and severe repercussions for US industry.

Strategic implications in East Asia

East Asia is witnessing a quiet but significant realignment. Major US allies such as South Korea and Japan are increasingly drawn toward China due to its economic size and geographic proximity. In 2023, China-South Korea trade reached $310 billion, and China-Japan trade exceeded $330 billion. In contrast, both countries traded only around $230 billion with the United States. This trend underscores a shift driven by economic pragmatism over ideology.

The ongoing trade war has started eroding the credibility of US-led alliances in the region. Participation by South Korea in China-led initiatives such as the Regional Comprehensive Economic Partnership (RCEP) signals a growing tilt toward Beijing.

Economic dependence is translating into diplomatic flexibility, with potential implications for long-standing security alignments. The region may never be the same again.

Should Washington continue with protectionist policies without offering viable economic alternatives, regional allies may begin to hedge their bets. This could result in reduced participation in US-led defense initiatives, joint military exercises, and diplomatic forums – marking a profound transformation in the region’s geopolitical landscape.

The US may be overestimating regional countries’ commitment to shared political values. That bond may not be strong enough to hold them together in the face of mounting economic hardships and rapidly shifting geopolitical dynamics.

US miscalculation and the rise of a multipolar Asia

Instead of curbing China’s rise, the trade war is catalyzing a broader realignment. China’s economic resilience, assertive diplomacy, and expanded global trade ties are accelerating its emergence as a rival superpower. Meanwhile, the US risks strategic overreach and diminishing relevance in a region it once dominated.

The Cold War-era architecture of US leadership is increasingly ill-suited for a world defined by economic interdependence. China sees this confrontation not merely as a trade dispute but as a strategic test of its national resolve. Far from backing down, Beijing is doubling down – confident that it can emerge from the conflict stronger and more globally engaged.

The way forward

The notion that the United States can bring China to its knees through a trade war is outdated. That window closed a long time ago. China is now the world’s largest trading nation – a status it has held for over a decade – and its share of global exports reflects a deeply embedded position within global supply chains.

It is crucial for American leadership to realistically assess the current role of US trade with China in driving China’s continued growth. Washington appears to be stuck in the past, when American investment and trade played a major role in China’s economic expansion. Today, China’s growth is increasingly sustained by diversified global partnerships and domestic innovation.

In 2024, China’s exports to the US accounted for a small portion of its total exports, underscoring its reduced dependence on the American market. On the other hand, the US remains heavily reliant on Chinese imports across critical sectors, from electronics and pharmaceuticals to rare earth minerals and consumer goods. A disruption in Chinese exports would paralyze major American companies and fuel inflationary pressures.

Moreover, China holds the ability to retaliate by targeting key US exports such as agricultural products, aircraft and luxury goods, which would hurt American farmers, exporters, and manufacturers. This could ripple across global markets, destabilize supply chains, and weaken US competitiveness.

In this multipolar landscape, China is no longer a subordinate player. It is a superpower with diversified markets, resilient trade networks, and growing geopolitical reach. The US strategy of using trade as a weapon – originally intended to constrain China – is now ironically enabling its rise.

Given these realities, the United States must fundamentally rethink its trade and strategic posture. Rather than continuing to rely on punitive tariffs, Washington should adopt a strategy of constructive engagement that reflects the complexities of a multipolar, interconnected global economy.

This requires a renewed commitment to work through multilateral trade institutions, ensure fair competition and promote transparency. Simultaneously, the US must lead the formation of inclusive regional trade agreements that offer its allies viable economic alternatives to dependence on China – thereby reinforcing trust and shared prosperity.

At the same time, Washington should deepen its partnerships in the  region by investing in joint ventures in digital infrastructure, green technology and next-generation innovation.

Domestically, the United States must enhance its economic strength by investing heavily in artificial intelligence, semiconductors, clean energy, and workforce development. These sectors will define global leadership in the 21st century, and the US must lead not merely through power, but by setting the pace of innovation.

Ultimately, preserving American competitiveness and credibility requires a comprehensive and forward-looking strategy. The challenge is no longer about winning a trade war with China – it is about whether the United States remains a central architect of the future global order or is gradually forced to cede that role to China

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This chart shows why Trump backflipped on tariffs – Asia Times

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The Trump administration has announced a 90-day pause on its plan to impose so-called “reciprocal” tariffs on nearly all US imports. But the pause does not extend to China, where import duties will rise to around 125%.

The move signals a partial retreat from what had been shaping up as a broad and aggressive trade war. For most countries, the US will now apply a 10% baseline tariff for the next three months. But the White House made clear that its tariffs on Chinese imports will remain in place.

So why did President Trump back away from the broader tariff push? The answer is simple: the economic cost to the US was too high.

Our economic model shows the fallout, even after the ‘pause’

Using a global economic model, we have been estimating the macroeconomic consequences of the Trump administration’s tariff plans as they have developed.

The following table shows two versions of the economic effects of the tariff plan:

  • “pre-pause” – as the plan stood immediately before Wednesday’s 90-day pause, under a scenario in which all countries retaliate except Australia, Japan and South Korea (which said they would not retaliate)
  • “post-pause” after reciprocal tariffs were withdrawn.

As is clear, the US would have faced steep and immediate losses in employment, investment, growth, and most importantly, real consumption, the best measure of household living standards.

Heavy costs of the tariff war

Under the pre-pause scenario, the US would have seen real consumption fall by 2.4% in 2025 alone. Real gross domestic product (GDP) would have declined by 2.6%, while employment falls by 2.7% and real investment (after inflation) plunges 6.6%.

These are not trivial adjustments. They represent significant contractions that would be felt in everyday life, from job losses to price increases to reduced household purchasing power. Since the current US unemployment rate is 4.2%, these results suggest that for every three currently unemployed Americans, two more would join their ranks.

Our modelling shows the damage would not just be short-term. Across the 2025–2040 projection period, US real consumption losses would have averaged 1.2%, with persistent investment weakness and a long-term decline in real GDP.

It is likely that internal economic advice reflected this kind of outlook. The decision to pause most of the tariff increases may well be an acknowledgement that the policy was economically unsustainable and would result in a permanent reduction in US global economic power. Financial markets were also rattled.

The scaled-back plan: still aggressive on China

The new arrangement announced on April 9 scales the higher tariff regime back to a flat 10% for about 70 countries but keeps the full weight of tariffs on Chinese goods at around 125%. Rates on Canadian and Mexican imports remain at 25%.

In response, China has announced an 84% tariff on US goods.

The table’s “post-pause” column summarizes the results of the scaled-back plan if the pause becomes permanent. For consistency, we assume all countries except Australia, Japan and Korea retaliate with tariffs equal to those imposed by the US.

As is clear from the “post-pause” results, lower US tariffs, together with lower retaliatory tariffs, equal less damage for the US economy.

Tariffs applied uniformly are less distortionary, and significant retaliation from just one major partner (China) is easier to absorb than a broad global response.

However, the costs will still be high. The US is projected to experience a 1.9% drop in real consumption in 2025, driven by lower employment and reduced efficiency in production. Real investment is projected to fall by 4.8%, and employment by 2.1%.

Perhaps we should not be surprised that the costs are still so high. In 2022, China, Canada and Mexico accounted for almost 45% of all US goods imports, and many countries were already facing 10% reciprocal tariffs in the “pre-pause” scenario. Trump’s tariff pause has not changed duty rates for these countries.

YouTube video

[embedded content]

US President Donald Trump discusses the 90-day tariff pause.

What does this mean for Australia?

Much of the domestic commentary in Australia has focused on the risk of collateral damage from a US-China trade war. Given Australia’s economic ties to both countries, it is a reasonable concern.

But our modelling suggests that Australia may actually benefit modestly. Under both scenarios, Australia’s real consumption rises slightly, driven by stronger investment, improved terms of trade (a measure of our export prices relative to import prices), and redirection of trade flows.

One mechanism is what economists call trade diversion: if Chinese or European exporters find the US market less attractive, they may redirect goods to Australia and other open markets.

At the same time, reduced global demand for capital, especially in the US and China, means lower interest rates globally. That stimulates investment elsewhere, including in Australia. In our model, Australian real investment rises under both scenarios, leading to small but sustained gains in GDP and household consumption.

These results suggest that, at least under current policy settings, Australia is unlikely to suffer significant direct effects from the tariff increases.

However, rising investor uncertainty is a risk for both the global and Australian economies, and this is not factored into our modelling. In the space of a single week, the Trump administration has whipsawed global investor confidence through three major tariff announcements.

A temporary reprieve

Tariffs appear to be central to the administration’s economic program. So Trump’s decision to pause his broader tariff agenda may not signal a shift in philosophy and may just be a tactical retreat.

The updated strategy, high tariffs on China and lower ones elsewhere, might reflect an attempt to refocus on where the administration sees its main strategic concern while avoiding unnecessary blowback from allies and neutral partners.

Whether this narrower approach proves durable remains to be seen. The sharpest economic pain has been deferred. Whether it returns depends on how the next 90 days play out.

James Giesecke is professor, Centre of Policy Studies and the Impact Project, Victoria University and Robert Waschik is associate professor and deputy director, Centre of Policy Studies, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Time for Australia to think the unthinkable about America – Asia Times

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how the world changes. The older economic and geopolitical attempt has been altered in Donald Trump’s less than three weeks since he entered the White House.

The United States is no longer seen as the foundation of a rules-based international order ( RBIO ). Instead, it is perceived as its main adversary. Despite China’s potential being the primary goal of Trump’s taxes, strangely enough, it is the Person’s Republic that has seized the opportunity to position itself as the doubtful champion of globalization.

These are particularly head-spinning times for less potent, trade-dependent says like Australia. They are unsure of how Trump’s changing tariffs will develop next. The whole rationale of Australia’s strategic placement is being questioned, and not just that Australia’s financial future is in the balance.

It is long overdue to reconsider Australia’s unquestionable respect to the US. However, Canberra’s corporate elites are reluctant to consider the unthinkable because they are unable to take into account a world where the US is not a dominant and trustworthy force in both economic and strategic affairs.

The notion that the US was the only credible pillar of stability was always a myth, though it was comforting for generations of American politicians who were hesitant to embrace the concept of intellectual independence or true nationwide sovereignty.

In fact, the US has a terrible habit of starting unwanted wars and undermining the RBIO. The Trump presidency is quickly resigning or defunding culture and support organizations it doesn’t want to be a part of because the US has always been a representative of important international bodies like the International Criminal Court.

When he declared that foreign frontrunners had “kiss his ass,” Donald Trump helped to dispel any lingering doubts with his usual political awareness if politicians outside the US were still in doubt about his attitude toward other nations, whether they were alleged allies or speculative foes.

However, it is not just that Trump is an economical ignorant surrounded by obsequious flunkies and chancers that makes his administration but risky and destructive.

The Trump administration’s policies may have serious effects on the rest of the world, as the manipulations in the world’s stock and bond markets demonstrate, which is contrary to the sheer weight of the British market.

There is very little possibility that Trump may be concerned about the harm he inflicts on Southeast Asian markets that are extremely exposed to trade, unless, of course, it has an impact on the US.

An exceedingly probable recession will have an impact on everyone in the long run, but Trump is obviously not a long-seeker, aside from his own durability and the possibility of a second presidential term.

American policymakers don’t ease themselves by anticipating that things will return to normal, even though this is an unlikely possibility, not least because of Trump’s era. As America flirts with totalitarianism and the renowned political guardrails are gradually being destroyed, it’s not even clear if there will ever be another election at this point.

The US is no more a trustworthy companion, and Australia’s financial and strategic future will depend on how closely it ties to the region. If there is one thing that should be made clear, it is that.

Strategic and economic elites have had to work together to form lasting, fruitful relationships with their fast, middle-class neighbors. In the face of a shared risk to the established get, from which both nations have profited, it is even more improbable to think Australia accepting China’s present of” joining hands.”

Quite naturally, Defense Minister Richard Marles rejected the idea right away. One of the president’s most fervent supporters of the AUKUS submarine job in particular and the alliance in general is Marcelles.

Despite this, China is attempting to maintain the outdated economic order while the US is overturning it. Maybe policy thinking should be likewise novel in such unprecedented circumstances.

It’s not necessary to think about forming a strategic partnership with China in order to send important signals to both the PRC and the US regarding Australia’s willingness to follow the kind of’transactional’ strategy that Trump favors.

This is especially true when some critics are concerned about the knowledge sharing that Trump’s policies involve and the impact his policies are having on long-standing and long-suffering supporters like Australia. They actually needn’t care at this point.

American policymakers can’t possibly imagine anything else the Trump administration does to the region, which has fought alongside the US in all of its pointless conflicts of option.

However, it is entirely possible that the Trump administration may leave the Indo-Pacific place if it is determined that it is in America’s “national interest” to do so.

Even if the US maintains a proper hold, it will probably anticipate extremely exigent contributions from the allies who make up America’s growing memorial system. Which raises the question of whether the Taiwanese translation could be any worse.

The Australia-China Relations Institute, University of Technology Sydney, employs alternative doctor Mark Beeson.

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Money Talks Podcast: Trump tariffs – Take time to adjust your investment portfolio

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On:
In: South-East Asia

We have spoken to some owners, and these investors have a longer watch on their investments, and the market selldown makes it possible for them to enter investments at lower valuations.

Andrea: 
purchasing the squeeze &nbsp,

Eddy:
Yes. You must, of course, do your homework and ensure that you are investing in companies that can withstand all these near-term winds.

But I believe the most important thing is to keep your resume diversified, something we have always been putting emphasis on. Because of the current market selldown, equities were most negatively impacted, yes, but some of the investment-grade bonds have been of high value. Ties have performed significantly better. Platinum has also proven to be fairly resilient. &nbsp,

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Trump’s tariffs: China retaliates with 84% levy

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In: Asia
2 nights ago
Kelly Ng

BBC News

Reporting fromSingapore
BBC A Chinese man and a Chinese woman use sewing machines on red fabric inside a factory owned by one of Shein's suppliersBBC

China’s finance ministry has announced an 84 % tax on US imports, in response to new levies put in place by the White House.

After US President Donald Trump’s 104 % tariff on Chinese goods went into effect on Wednesday, the tariffs increased from 34 % to 125 %.

Trump claimed that the 21 % increase was “based on the lack of value” China had displayed, and that it would take effect “right away.”

Beijing, which has stated its costs will start as early as Thursday, urged additional nations to unite against Trump’s taxes as exporters suffer from the terrible new levies.

Beijing’s cooperation with Japan, South Korea, and other Eastern markets was proclaimed in an editor in the state-run newspaper China Daily.

In a separate article, it was suggested that the European Union job with it to” support free trade and multilateralism.”

On Wednesday, the US business dispute with China continued to grow. After Trump imposed its highest tariffs on a number of nations, China retaliated with a customs charge of its own 84 % on US goods.

Soon after the announcement, Western businesses dropped, with the FTSE 100 and Germany’s Dax experiencing a 3.3 % decline.

Trump after stated on his Truth Social program that he was increasing US tariffs on China to 125 % in exchange.

The US senator wrote that China will eventually realize that the time of ripping off the USA and other nations are no longer lasting or acceptable.

He also stated that dozens of countries, excluding China, would have had their higher tariffs halted for 90 days, claiming that this was because those countries had not, at my strong recommendation, “retaliated against the United States in any way, shape, or form.”

Beijing” she firmly opposes and will never take such dominant and bullying procedures,” foreign ministry spokesman Lin Jian told reporters on Wednesday, before the most recent raise from Washington.

China’s slow economy is at a hard time because exports are still the main driver of growth, and domestic consumption is also low.

With most of the nations affected, companies say it’s difficult to find a way out of this uncertainty because of the broad nature of Trump’s tariffs, which have also made Taiwanese businesses scramble to adapt their supply chains.

The owner of a Taiwanese company that handles cross-border transportation for e-commerce as well as air and sea cargo predicted that the taxes would “already razor-thin income profits.” He declined to give his title.

” Intermodal forwarders like us, as well as companies, businesses, and buyers, are incurred by higher taxes. Simply put, it means anyone makes less money.

According to Dan Wang from the Eurasia Group firm, any price above 35 % will squander all the gains that Chinese companies make when exporting to the US or South East Asia.

Since exports have accounted for 20 % to 50 % of growth since the Covid pandemic, she continued,” Growth is going to be much lower.”

According to Chinese journalist Liu Hong, a senior director at state-run Xinhua information, Beijing is reportedly considering suspending opioid cooperation with the US and banning Hollywood movies.

Fuling, which sells disposable dinnerware to US fast food chains like McDonald’s and Wendy’s, may find solace in that situation.

The more tariffs” significantly effect” its business, it claimed. Fuling noted that the US accounted for nearly two-thirds of the company’s profit in 2023 and the first quarter of last year.

Fuling, which has its headquarters in China’s Zhejiang province, opened a new shop in Indonesia late last year to lessen the impact of tariffs.

Trump’s new levies, according to the company, have created more confusion for Chinese imports from Indonesia, which are currently subject to a 32 % charge.

Getty Images Aerial view of vehicles waiting to be loaded onto a ro-ro ship for export at Lianyungang Port on April 7, 2025 in China's Jiangsu provinceGetty Images

Indonesia was hit along with much of the world in President Trump’s announcement of expansive tariffs last week, which he claimed would allow the US economy to flourish.

However, economists have warned of a US and international crisis. Trump’s supporter Elon Musk and other billionaire CEOs have also criticized the taxes, which have also shaken global markets.

Trump has not spoken to Taiwanese leader Xi Jinping since returning to the White House, even though China has left the door open for discussions.

The American Chamber of Commerce in China stated in a word to its member organizations on Wednesday that for broad, sweeping levies may cause more harm than good.

The word signed by Chair Alvin Liu and President Michael Hart read,” This amount of upheaval is unparalleled, and it remains unclear how the latest measures will gain consumers in either nation or the broader economy.”

Getty Images A combination of portraits of Xi Jinping (left) and Donald Trump (right)Getty Images

Some analysts believe the levies will force China to restructure its economy and rely heavily on domestic consumption, which it has been struggling to boost.

Without this, Tim Waterer, a broker for KCM Trade, the tariffs won’t get long-term responsible for China.

The manager of a Chinese transport business, who asked to remain anonymous, said,” The tariffs are aimed at suppressing China.”

He added that Vietnam and Cambodia are “exactly where some Chinese firms have relocated,” making Vietnam and Cambodia two of the South East Asian nations that have experienced rough taxes.

The Tianjin-based business intends to engage some of its British clients in negotiations to split the stress of the tariffs. ” Every case is unique, but nevertheless, the effect has been significant,” he said.

Wu Changchun, a manager of another freight company whose business primarily operates on shipping roads between China and Cambodia, claimed he is now seeing a decline in transport level.

He claimed that a number of construction projects in Cambodia have also been put on hold as a result of Trump’s tariff news.

Businesses could still be able to bear the cost by reducing margins, sharing the burden, and optimizing supply chains if the tariffs were 10 % or 20 %. Although trade was continue, at 104 %, it is no longer something that trade-offs can fix, according to Mr. Wu, Maritima Maruba’s general manager.

” That’s complete decoupling,” Essentially, business would stop.

Annabelle Liang provided further monitoring.

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