Marketing Newscast

Has Donald Trump ‘chickened out?’ That is certainly what users of Chinese social media site Weibo are saying, following reports that the US President is considering backing down further in his trade war with China and cutting tariffs on imports from the country, and from 125% to between 50% and 65%, according to The Wall Street Journal. Trump did in deed tell reporters yesterday that levies on China would “come down substantially”. “We are going to have a fair deal with China”, he said, having already lifted tariffs on smartphones and computers from the country. The Financial Times is also reporting that Trump is planning to exempt some carmakers from his tariffs. US Treasury Secretary Scott Bessent, meanwhile, talked of an opportunity for a "big deal" between the US and China on trade, and that an upcoming meeting between the two countries would be an "incredible opportunity" to strike an agreement if China was "serious" on making its economy less dependent on manufacturing exports. "China needs to change. The country knows it needs to change. Everyone knows it needs to change. And we want to help it change because we need rebalancing too," he said. The US economy – and global economies – have taken a severe battering since Trump announced he was slapping trade tariffs on all goods entering the USA on 2^nd April, and then further targeted China as Beijing retaliated. Analysts have been talking seriously about the potential collapse of the US dollar - it swung to three years lows earlier this week - and predicting the country is racing headlong into a deep recession.

Meanwhile, Chancellor Rachel Reeves looks set to follow Trump’s lead and close part of the UK tax code, known as the de minimis rule, which exempts products worth less than £135 from UK import duties, amid concerns it is being exploited by Chinese online retail giants such as Shein and Temu. Both the US and the EU have already scrapped de minimis, saying it allows Chinese firms to undercut UK businesses by mass shipping goods directly to shoppers in individual packets. Several leading bricks-and-mortar retailers have called for the rule to go, highlighting how it puts them at a disadvantage because they must bulk-buy stock and import it via container ships that are subject to customs duties and VAT at UK ports. Reeves has now announced a review of the rule, despite last week saying she supported Shein’s proposal to list on the London stock market. Speaking in Washington DC, where she is engaged in talks regarding a US-UK trade deal, Reeves said: “We are absolutely standing up for the British high street against the dumping of cheap imports of products that undercut British retailers and undercut the British high street”. She added: “British retailers can see that the UK Government is acting in the British interest in a whole range of policy areas, whether it’s British Steel, the announcements we’ve made today, or our approach to trade negotiations with countries around the world.”

British business certainly needs a boost: according to S&P Global’s composite purchasing managers’ index (PMI), private sector output fell in April for the first time in a year and a half, with firms saying they face “more of a struggle” to survive now Reeves’ tax rises have kicked in. The UK economic outlook in the survey was “one of the lowest levels yet recorded,” S&P said. The index fell to 48.2, below the 50-level that signifies growth, a drop consistent with a quarterly decline of 0.3% in UK GDP. Total new work received by UK private sector firms also decreased for the fifth month in a row as Trump’s tariffs forced them to delay spending decisions.

Energy Secretary Ed Miliband is “poised to approve changes that would mean households in the South pay more for electricity than those in Scotland and the North,” it is reported in The Telegraph this morning. The newspaper says Government officials are urging him to push ahead with a policy of regional pricing, and that Whitehall has not denied that claim, only stressed that no final decision has been made. A spokesman for the Department of Energy Security and Net Zero said: “In an unstable world, the only way to guarantee our energy security and protect consumers from future energy price shocks is by moving towards home-grown power. We are considering reforms to Britain’s electricity market arrangements, ensuring that these focus on protecting bill payers and encouraging investment. We will provide an update in due course.”

The Birmingham bin strike is now in its seventh week, and The Telegraph’s Political Correspondent Dominic Penna has seen a previously secret council dossier warning of worsening mental health across the city, the risk of ambulances and police cars being impeded by piles of rubbish, and a surge in rat-borne diseases. The document, a risk-assessment of the impact of the strike, was released to the newspaper following a Freedom of Information request. It runs to nine-pages, and also warns that land, air and water are all at risk of contamination through fly-tipping, decomposing waste and residents burning rubbish. In particular, it singles out those residents who “live in areas of deprivation, or those who are immunocompromised, infants, elderly, or disabled” as being “particularly susceptible to any adverse health impacts of the strike.” Yesterday, it was announced that conciliation service Acas will get involved in the dispute between Birmingham City Council and refuse workers who are members of the Unite trade union. However, despite saying all parties were withing “touching distance of striking a deal,” Unite General Secretary Sharon Graham went on to accuse the Council yesterday of “flip-flopping” by “saying one thing in public and another in the negotiations,” and repeating her threat to extend the strikes across the country if pay is cut elsewhere. Birmingham City Council, which has been under Labour control since 2012, declared itself effectively bankrupt in 2023 after overspending by £80m on an IT project and struggling to settle a £760m equal pay law suit.

Richard Gnodde, Goldman Sachs’ most senior banker outside America, is leaving the UK to avoid the Government’s crackdown on non-doms, City AM reveals. He is moving to Milan, along with “a growing wave of high-profile UK residents quitting Britain in favour of more tax-friendly jurisdictions,” the newspaper says. In her maiden Budget, Rachel Reeves abolished the non-domicile status which allowed foreigners resident in the UK to be taxed only on their UK-based income and assets, changing the rules so they must pay UK taxes on their global income. Any non-UK trusts owned have also become liable to UK taxes for overseas’ residents, including Inheritance Tax.

Apple and Meta have been fined €500m and €200m respectively by the European Commission for breaking its new digital market laws, the first fines imposed since they were introduced. Apple was fined for stopping app makers from pointing users to cheaper options outside its own App Store. It has also been slapped with a ‘cease and desist’ order. Meta was found to have forced Facebook and Instagram users to choose between either seeing personalised ads or paying to avoid them, thereby removing users’ right to freely consent to how their personal data was used. Both US tech giants are expected to appeal the decision: Apple said the Commission had made "a series of decisions that are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free;" and Meta said the ruling means Chinese and European companies are allowed to operate to different standards compared to American businesses. "This isn't just about a fine; the Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service," it said in a statement.