Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Hope is swirling this morning that China might relax some of the tariffs it has imposed on US goods as part of Donald Trump’s trade wars.
With the economic costs of the tit-for-tat trade war hurting Chinese companies, Beijing appears to be seeking to mitigate the economic fallout from the conflict.
According toBloomberg, this means China’s government is considering suspending its 125% tariff on some US imports – a sign that policymakers are worried about the damage caused by its trade war with Washington.
Bloombergsay:
This potential easing in the US-China trade conflict comes afterDonaldTrumprevealed yesterday that the world’s two largest economies had held talks to help resolve the trade war.
The US president told reporters:
Reutersis also reporting that China is considering exempting some U.S. imports from its 125% tariffs and is asking businesses to identify goods that could be eligible.
A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests,Reutersadds, citing a source.
Signs of de-escalation in the trade war will cheer investors, after a bruising few weeks since Trump announced his tariffs on trading partners.
It could also reassure politicians and central bankers around the world, who fear the consequences of a slowdown in world trade.
As the Bank of England’s governor, Andrew Bailey, warned on Thursday, the UK economy faces a “growth shock” as a result of Trump’s trade policies.
7am BST: UK retail sales report for March
9.30am BST: UK trade data for Q4 2024
3pm BST: University of Michigan’s survey of US consumer confidence
3pm BST: IMF holds press conference on the economic outlook for Europe
Rachel Reeves used a brief speech to US investors at the British ambassador’s lavish residence in Washington last night, to acknowledge some of the downsides of globalisation, in a nod to Donald Trump’s stance.
As she prepares to meet Treasury secretaryScottBessenttoday,Reevessaid China’s entry into the global trading system 25 years ago had created “huge benefits in terms of cheaper goods, more innovation and more opportunities to trade”.
But she said there had also been “many more challenges”,reports our economics editor Heather Stewart.
Drawing parallel between the frustrations that drove British voters to back Keir Starmer last July, and those of Trump’s supporters, she said, “in this country, but also back home in my country last year, people voted for change”.
She added:
Reeves’shost, current British ambassadorLordPeterMandelson, also highlighted the strong transatlantic relationship in his introductory remarks, with a typically colourful metaphor.
Mandelsonsaid:
City economists are encouraged that UK retail sales rose last month.
Kris Hamer,director of insight at theBritish Retail Consortium,credits the warmer weather, which boosted demand for clothing and DIY equipment:
Sagar Shah, associate partner atMcKinsey &Company, says consumers appear resilient:
However…..there is a wrinkle, as these retail sales are seasonally adjusted to smooth out one-off factors, such as the timing of Easter.
Jacqueline Windsor,head of retail atPwC UK,explains:
The oil price is inching higher today, amid hopes of a de-escalation in US-China trade conflicts.
Brent crude, the international benchmark, has risen by 0.5% to $66.86 per barrel.
Back in Britain, retail sales grew faster than expected last month – in an encouraging sign for growth this year.
Retail sales volumes across Great Britain rose by 0.4% in March, the Office for National Statistics reports, surprising economists who had expected a 0.4% fall.
Clothing and outdoor retailers reported that good weather boosted sales, the ONS reports. However, that was partly offset by falls in supermarket sales.
March’s growth follows a rise of 0.7% in February (revised down from a first estimate of 1.0%).
The broader picture is that retail sales volumes grew by 1.6% rise in the first three months of 2025, comped with October-December 2024.
That’s the largest three-monthly rise since July 2021, suggesting consumer spending is holding up quite well this year.
The US-China trade conflict is forcing companies to rethink their supply chains.
Apple, for example, is reportedly pivoting away from China, which would be a major change to its supply chain.
The Financial Times reports this morningthat Apple plans to shift the assembly of all US-sold iPhones to India by as soon as the end of 2026. That would mean doubling the iPhone output in India.
The FT explains:
Stock markets across the Asia-Pacific region are higher today, following those reports that China is considering suspending its 125% tariff on some US imports,
Hong Kong’sHangSengindex has rallied by 1%, as has South Korea’s KOSPI.
Japan’sNikkeiindex has jumped by 1.8%, while China’sCSI 300share index is up a more modest 0.2%.
Ipek Ozkardeskaya, senior analyst atSwissquote Bank,reports that signs of de-escalation of trade tensions are lifting optimism.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Hope is swirling this morning that China might relax some of the tariffs it has imposed on US goods as part of Donald Trump’s trade wars.
With the economic costs of the tit-for-tat trade war hurting Chinese companies, Beijing appears to be seeking to mitigate the economic fallout from the conflict.
According toBloomberg, this means China’s government is considering suspending its 125% tariff on some US imports – a sign that policymakers are worried about the damage caused by its trade war with Washington.
Bloombergsay:
This potential easing in the US-China trade conflict comes afterDonaldTrumprevealed yesterday that the world’s two largest economies had held talks to help resolve the trade war.
The US president told reporters:
Reutersis also reporting that China is considering exempting some U.S. imports from its 125% tariffs and is asking businesses to identify goods that could be eligible.
A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests,Reutersadds, citing a source.
Signs of de-escalation in the trade war will cheer investors, after a bruising few weeks since Trump announced his tariffs on trading partners.
It could also reassure politicians and central bankers around the world, who fear the consequences of a slowdown in world trade.
As the Bank of England’s governor, Andrew Bailey, warned on Thursday, the UK economy faces a “growth shock” as a result of Trump’s trade policies.
7am BST: UK retail sales report for March
9.30am BST: UK trade data for Q4 2024
3pm BST: University of Michigan’s survey of US consumer confidence
3pm BST: IMF holds press conference on the economic outlook for Europe