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    White House to end US tariff exemption for all low-value overseas packages

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    The United States is suspending a “de minimis” exemption that allowed low-value commercial shipments to be shipped to the United States without facing tariffs, the White House said on Wednesday.Under an executive order signed by Donald Trump on Wednesday, packages valued at or under $800 sent to the US outside of the international postal network will now face “all applicable duties” starting on 29 August, the White House said.The US president earlier targeted packages from China and Hong Kong, and the White House said the recently signed tax and spending bill repealed the legal basis for the de minimis exemption worldwide starting on 1 July 2027.“Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now,” the White House said in a fact sheet, referring to the bill known as the One Big Beautiful Bill Act.Goods shipped through the postal system will face one of two tariffs: either an “ad valorem duty” equal to the effective tariff rate of the package’s country of origin or, for six months, a specific tariff of $80 to $200 depending on the country of origin’s tariff rate. More

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      Scott Morrison tells US Australia risks going to sleep on China threat after diplomatic ‘charm and flattery’

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      The Chinese Communist party hopes Western democracies “go to sleep on the threat” it poses to the international order, former prime minister Scott Morrison has told a congressional committee in the US.In a forthright appearance before the hawkish US House of Representatives select committee on the strategic competition between the United States and the Chinese Communist party, Morrison said China had changed diplomatic tack after he lost the 2022 election to Anthony Albanese.“This included abandoning their economic and diplomatic bullying and coercion for more inductive engagement, laced with charm and flattery,” Morrison said. “That said, the PRC still continues to engage in intimidatory behaviour by their military against Australia when it suits them without remorse.”Morrison said while China’s diplomatic tactics had changed, its objectives were unaltered: to isolate US influence in the Indo-Pacific and weaken efforts at countering Beijing’s “potential security threat”.He said Australia should boost its defence spending to the 3.5% of GDP demanded of it by the US, arguing “the world has changed” and that Chinese leaders sought to “recast the world order to accommodate their illiberal objectives”.Morrison accused the current Labor government of scrimping on defence spending in order to pay for the Aukus submarine deal, which will cost $358bn to the 2050s.Morrison later told reporters Australian defence spending parsimony – in particular the “displacement” of funds to prioritise Aukus – had been raised by the US in its review of the agreement.Sign up: AU Breaking News email“It wasn’t [meant to be] ‘Aukus instead’, it was ‘Aukus as well’,” he said. “And ‘Aukus as well’ was at least going to add another half a percent of GDP, at least.”Morrison said Australia should raise its defence spending to 3% of GDP by 2030 and 3.5% by 2035. The government spends a little over 2% of GDP on defence currently, with forecasts to lift that to 2.3% by 2033. To prioritise Aukus, significant cuts have reportedly been made to defence programs, training budgets and to senior defence ranks.Australia has already paid $1.6bn to the US as part of the Aukus agreement. However, the future of the massive nuclear submarine deal remains uncertain as the Pentagon undertakes a review to ensure it does not weaken US naval capacity or diminish America’s force posture to contain China.Morrison, whose leadership between 2018 and 2022 endured a low in relations with Beijing, told the committee it was vital for western nations to resist Chinese attempts to interfere in politics and curb free speech.Citing polling of Australians by the Lowy Institute, the former prime minister told US lawmakers that “for the first time in quite a number of years there is a greater value on the economic partnership with China than concerns about the security threat”.“That is an objective of the CCP [Chinese communist party], that western democracies go to sleep on the threat,” Morrison said.“You need to build the internal resilience, and that means an appreciation of the potential threat. And that is somewhat in jeopardy in Australia.”Morrison said the liberal world order faced a “rising threat from authoritarian states who, not content with absolute control over their own populations to preserve their regimes, also seek hegemonic control over their own regions and to recast the world order to accommodate their illiberal objectives”.skip past newsletter promotionafter newsletter promotion“The Chinese Communist party government of the People’s Republic of China is such a regime.”And Morrison said Western countries were “kidding themselves” if they thought dialogue would change Beijing’s pursuit of their objectives.“A free and open Indo-Pacific – that is a threat and a challenge to regime security in China,” he said.“Discussion is fine, engagement is good – it’s better than the alternative. But if we think that is going to produce change in the mindset of Beijing then we’re frankly kidding ourselves.”Appearing alongside Morrison before the committee hearing was Rahm Emanuel, formerly president Barack Obama’s chief of staff, mayor of Chicago and US ambassador to Japan. Emanuel is widely considered to be a leading Democratic contender contemplating a run for the White House in 2028.He argued the US – in a significant shift from the Trump administration’s “America First” doctrine – should lead a strong “anti-coercion coalition” along with allies like Australia to counter Beijing’s growing influence.He cited China’s trade sanctions on beef, wine and barley, imposed after Australia led calls for an inquiry into the origins of Covid-19, as examples of economic coercion, China’s most “pernicious and persistent tool”.“Australia is the best kind of blueprint of what you want to replicate worldwide. They did it on their own,” Emanuel said. “And China realised they couldn’t isolate Australia.” More

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      Who is Nick Adams? From a Sydney council to Trump’s plum pick, the Hooters fan could be next US ambassador to Malaysia

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      “Nicholas Adams, of Florida, to be ambassador extraordinary and plenipotentiary of the United States of America to Malaysia,” the White House announced this week.There were those who had never heard of Australian-born Nick Adams. And then there were those who thought Nick Adams was just a satirical social media account, a troll who delighted in anti-wokery and Trump adoration.But he’s real, and he’s in line to pick up a plum diplomatic posting.Who is Nick Adams? Adams was, once upon a time, Australia’s youngest ever deputy mayor, with a penchant for talking about pigeons and dog poo. Twenty years after his stint at Ashfield council, the University of Sydney graduate is a Trump-loving, beer-swilling, steak-eating, self-described “alpha male”.He became a US citizen in 2021.And now, the US president, Donald Trump, has nominated him as the country’s ambassador to Malaysia – a conservative, Islamic country.Adams thanked his parents for giving him every opportunity. “I only wish my father were alive to see this,” he wrote on X, adding that “delusional self-belief and irrational optimism, along with endless hard work, make anything possible”.One of his most-quoted tweets includes the memorable lines:“I go to Hooters. I eat rare steaks. I lift extremely heavy weights. I read the Bible every night. I am pursued by copious amounts of women.”Why has Trump picked him for US ambassador to Malaysia?An ambassador is usually a lifelong diplomat or a former politician. They exist to grease the wheels of international relations, to represent their country in a foreign land, and to keep their country informed about what’s going on in that land.Adams is an “incredible patriot”, Trump wrote on social media, and “a bestselling author, speaker, and commentator”. He has “made it his life’s mission to extol the Virtues of American Greatness”.What is an ‘alpha male’?In the animal world the alpha male is the dominant one in a group. The term has been dragged into the murk of the manosphere.In Adams’ case, he posted a video on X in which he emerges, damply, from a sauna to declare himself an alpha male and to tell “all the beautiful ladies” whose birthday wishes he has made come true that they are “welcome”. He called for his birthday to be made a public holiday and for all alpha males to celebrate it, order a larger steak and smoke a “girthier cigar”.He also wrote a book called Alpha Kings (with a foreword by one Donald J Trump), which “makes the case for traditional masculinity” and promises to “show the young men of America what it means to be a true alpha male in today’s hyper-feminized world”.What are some of his Australian career highlights? “I’m not an expert,” Adams said in 2005. “I’m certainly not a pest controller … What I would like to see is no pigeons in our area.” Eradicating the rats of the sky would save the citizens of Ashfield from bird flu, he thought.In 2008, he proposed DNA testing dog poo left in public so their owners can be tracked down and fined.In 2009, the Channel Ten journalist Brett Mason asked him about council meetings he had missed. In return, Adams verbally abused Mason, which led to the Liberal party threatening to suspend him. He said he quit anyway.And what does he do now? He runs the Foundation for Liberty and American Greatness, a non-profit “dedicated to promoting and providing high-quality civics education that informs students and families about the greatness of America and the power of the American Dream”.Of about US$1.5m it brings in revenue, a jot over US$500,000 goes to salaries and other employee expenses – Adams being one of three employees, but the only one who draws a salary, according to the latest details lodged. About US$185,000 goes on travel and a bit over US$400,000 goes on social media campaigns.It’s a far cry from being a councillor, where you’d be doing well to take home A$50,000 – and maybe a bit more during a stint as deputy mayor.He also founded 1A Warriors, a “non-profit organization dedicated to securing, protecting, and preserving our beautiful and exceptional First Amendment” that is practically nonexistent online.And he’s written a bunch of books on top of Alpha Kings, including Green Card Warrior about his struggles to become a US resident.What happens next? He has to be confirmed by the Senate first, and if that goes through, he will replace Edgard Kagan as the US ambassador to Malaysia.The Malaysian media was relatively quiet on Friday about the appointment, but there are sure to be mutterings and raised eyebrows behind closed doors. Once Adams takes up residence in Kuala Lumpur, he will be hard-pressed to find a Hooters-like establishment, but he’ll be OK for steaks and beer.Then he will have to tread a delicate and sophisticated line as the US and Malaysia negotiate trade tariffs, joust over their respective relationships with China and deal with an increasingly unstable geopolitical climate. More

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      Manzanar teaches about Japanese American incarceration in the US. That’s in jeopardy under Trump

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      At the eastern slope of the Sierra Nevada, more than 200 miles (320km) outside Los Angeles, in what feels like the middle of nowhere, is Manzanar national historic site. It marks the place where more than 10,000 Japanese Americans were incarcerated during the second world war, crowded into barracks, surrounded by barbed wire and guard towers with searchlights, and patrolled by military police.Since then, Manzanar, which now has a museum and reconstructed barracks that visitors can walk through, has been transformed into a popular pilgrimage destination for Japanese Americans to remember and teach others about this history. (Manzanar was one of 10 concentration camps where the US government forcibly relocated and held more than 110,000 people of Japanese descent during the second world war.)But recently, under the direction of the Trump administration, National Park Service (NPS) employees have hung new signs at Manzanar that historians and community advocates say will undermine these public education efforts. The notices encourage visitors to report “any signs or other information that are negative about either past or living Americans or that fail to emphasize the beauty, grandeur, and abundance of landscapes and other natural features” via a QR code. The signs, which have been posted at all national parks, monuments and historic sites, were displayed in support of Donald Trump’s executive order Restoring Truth and Sanity to American History.Historians, national park advocates and community leaders say they’re alarmed by the move, in what they see as the most recent example of the Trump administration’s attempt to “whitewash” US history.View image in fullscreen“Any attempt to constrain or sanitize the stories that are told at Manzanar should concern every American,” said Naomi Ostwald Kawamura, executive director of Densho, an organization that documents the testimonies of Japanese Americans who were held in concentration camps. “I’m incredibly disappointed that this is happening in the United States because museums, monuments and memorials are public spaces where we can explore difficult history, confront our past, engage with what’s uncomfortable and then be able to imagine the future that we want to collectively share.”Earlier this year, government agencies compiled hundreds of words to be erased from federal recognition such as “diversity”, “cultural heritage”, “marginalized”, “racial inequality” and “ethnicity”.“I think the sign is clearly trying to create a chilling effect in the telling of these stories,” said Dennis Arguelles, the southern California director of the National Parks Conservation Association, which supports national parks and opposes planned changes to alter historical facts. “These are moments in our history and it’s very dangerous for us to try to pretend it didn’t happen.”The NPS, which has already been under pressure due to funding cuts, hiring freezes and forced resignations, has a legal mandate to preserve, protect and interpret American history. By posting the new signs across all 433 parks, monuments and historic sites, park visitors can act as government informants, although Arguelles said he has heard anecdotally that people have used the QR code to express support for Manzanar and ask that the administration let park rangers do their jobs.View image in fullscreenNPS units have been tasked with reviewing all “inappropriate content” on display by 18 July, and parks will receive direction about what to do with it by 18 August.Arguelles said that fears of public education at Manzanar being stifled are not unfounded. The park service has already stripped the contributions of transgender people from the Stonewall national monument’s website. And the US army deleted a webpage dedicated to the famed 442nd Regimental Combat Team, the nation’s most decorated military unit, which was composed of thousands of Japanese Americans whose families were forcibly incarcerated by their own government. After public outcry, the page was partially restored.The Trump administration has also threatened funding for colleges and universities offering ethnic studies programs as part of their DEI purge. Cultural institutions such as the Japanese American National Museum that focus on education, culture and storytelling have lost grants (some have since been temporarily restored). Among the cuts was a National Endowment for the Humanities grant that funded a workshop that helped teachers build a curriculum about the history of Japanese incarceration that benefitted roughly 20,000 students a year.“As a historian, you can see a pendulum swing between a very narrow and exclusive vision of America as a white Christian nation and a more open, multi-ethnic America,” said Duncan Ryūken Williams, director of the University of Southern California’s Shinso Ito Center and co-founder of of the Irei Project, which, for the first time, compiled the names of 125,284 people of Japanese ancestry who were unjustly incarcerated during the second world war. “We’re obviously in one part of that spectrum now.”The preservation of this part of Japanese American history is about more than remembering the past. In March, Trump invoked the Alien Enemies Act – the very law that served as the basis for some of the arrests and roundups of Japanese Americans during the second world war – against Venezuelan nationals as young as 14 whom the administration claims are members of the Tren de Aragua gang. In cases challenging the executive order, every judge except one has found the Trump administration’s use of the act to deport people without due process to be illegal.When the US last invoked the Alien Enemies Act, it began a period of escalation that resulted in the supreme court deferring to unsubstantiated claims from the executive branch, which led to everyday people, two-thirds of whom were American citizens, losing their families, jobs, homes and freedoms. (It wasn’t just the Alien Enemies Act; most people of Japanese descent were detained, under the auspices of martial law in Hawaii and otherwise under Executive Order 9066.)Williams said that, like today, the way the Alien Enemies Act was used during the second world war was prejudicial since people of Japanese heritage were seen at the time as being “unassimilable racially and religiously”, recalling racist tropes from the era of the 1882 Chinese Exclusion Act.View image in fullscreen“Currently, we are seeing people being picked up and detained and moved immediately away from their families,” said Aarti Kohli, executive director of the Asian Law Caucus, one of 60 Asian American organizations that filed an amicus brief supporting the fight against Trump’s use of the Alien Enemies Act. “We’re hearing reports of even green card holders having been deported without any process, without a hearing. It’s really, really disturbing.”She connects the lack of due process many immigrants are experiencing today to what most Japanese Americans experienced during the second world war. “This is the same playbook,” Kohli said. “The government suppressed evidence and made false claims to justify incarceration in WWII and today’s administration is doing the same thing. They’re invoking this law with no evidence.”While it remains to be seen how the courts will rule on the Alien Enemies Act and how the NPS will handle complying with the administration’s orders about the content at sites like Manzanar, Japanese American community organizations are determined to teach the lessons of the past to show how quickly civil liberties can be taken away, particularly for communities of color.“The slogan Make America Great Again is sort of calling back to the past that didn’t exist,” said Densho’s Kawamura. “We’re going to do our best to protect and safeguard this history so that young people still have access to it even if the federal government itself is making it more difficult for us to do our work.” More

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      Rich Americans flock to apply for New Zealand’s ‘golden visas’ after rules relaxed

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      Wealthy Americans are leading the charge in applications for New Zealand’s “golden visas” after rules on applying were relaxed.New Zealand’s coalition government in February loosened the requirements for its Active Investor Plus visa – commonly known as the golden visa – offering residency to wealthy foreigners in a bid to boost the flagging economy.The new rules, which came into effect in April, lowered investment thresholds, removed English-language requirements and cut the amount of time applicants must spend in the country to establish residency from three years to three weeks.Immigration New Zealand says the scheme has attracted 189 applications, representing 609 people, under the new rules. Prior to the changes, the visa attracted 116 applications over 2.5 years.Nearly half the investors who have applied hail from the US, representing 85 applications, followed by China, 26, and Hong Kong, 24. Residents from countries across Asia and Europe make up the rest of the applicants.“Nearly everyone who is applying is applying because of the changes they’re seeing under the Trump administration,” said Stuart Nash, a former Labour party minister, who now runs Nash Kelly Global, an immigration and relocation consultancy.Under the new rules, 149 applied under the visa’s “growth” category, which requires a minimum $5m investment over three years, and 40 applied under the “balanced” category, which requires a minimum $10m investment over five years.Immigration has approved 100 applications in principle and seven have transferred their funds – netting New Zealand $45m.There has been a significant increase in interest in the visa since the changes, with investors drawn to New Zealand’s stability and innovation in sustainable business and technology, said Benny Goodman, New Zealand Trade and Enterprise’s general manager for investment.“This is a rare combination, and one that deeply resonates with investors thinking about legacy, not just returns,” he said.Global instability makes New Zealand – with its stable democracy, independent judiciary and safe banking system – an attractive destination, particularly to Americans, Nash said.“We are seeing more people looking for a safe haven than a tax haven – and that’s what we have got here in New Zealand, Nash said.It is not the first time New Zealand has attracted the interest of Trump-weary Americans and other wealthy foreigners seeking to make New Zealand their “bolthole” at a time of societal division.Following Trump’s 2016 election, visits to the country’s immigration website rose almost 2,500%. After the supreme court decision removing abortion rights, New Zealand’s immigration site visits quadrupled to 77,000. After Trump’s 2024 election win, New Zealand’s property market saw a surge of interest from the US.Meanwhile, billionaires acquiring residency or citizenship in New Zealand have been subject to political controversy in the past. In 2017, news broke that Peter Thiel, the billionaire co-founder of PayPal, was granted citizenship despite spending only 12 days in the country, prompting former Labour prime minister Jacinda Ardern to tighten the rules on investment visas and foreign home ownership in 2018.The loosening of the visa rules is one of a number of Ardern-era policies the right-wing coalition has wound back in its bid the boost the economy. Earlier this year it relaxed other more restrictive visa settings to attract so-called ‘digital nomads’ to New Zealand.New Zealand’s economy suffered as a result of the Covid-19 pandemic and the country experienced the biggest contraction in GDP of any developed country in the world in 2024, due to high interest rates and unemployment.In a statement on Monday, economic growth minister Nicola Willis said so far the visa could represent “a potential $845 million of new investment in New Zealand business”.“New investors don’t just bring their dollars to our shores, they also bring skills, knowledge and experience that will drive future economic development,” Willis said. “It’s a win-win.” More

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      Trump trade deal shows how vital China’s rare-earth metals are to US defense firms

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      The draft trade agreement with China announced by Donald Trump on Wednesday would ease concerns from top US military suppliers about rare-earth metals and magnets that, if cut off permanently, could hobble production of everything from smart bombs to fighter jets to submarines and other weapons in the US arsenal.While the deal has not yet been finalised, it may reassure major defense companies such as Lockheed Martin, the largest US user of samarium – a rare-earth metal used in military-grade magnets – whose supply is entirely controlled by China.The issue of China’s export restrictions on the metals and magnets was so important that Trump specifically mentioned them as part of his announcement of a broader trade agreement with China that would reduce US tariffs to 55% and Chinese tariffs to 10%.“Our deal with China is done, subject to final approval with President Xi and me,” Trump wrote. “Full magnets, and any necessary rare earths, will be supplied, up front, by China.”Rare earths are crucial to the production of F-35 fighter jets, Virginia- and Columbia-class nuclear-powered submarines, Tomahawk missiles, radar systems, unmanned aerial vehicles and smart bombs, according to Gracelin Baskaran of the Center for Strategic and International Studies, a thinktank.China in April imposed export restrictions on seven rare earth elements during the tough negotiations over Trump’s new tariffs. China also targeted the aerospace and defense industries by limiting 15 US entities with ties to the industry from receiving dual-use goods.“The United States is already on the back foot when it comes to manufacturing these defense technologies,” Baskaran said in an interview published by CSIS. “China is rapidly expanding its munitions production and acquiring advanced weapons systems and equipment at a pace five to six times faster than the United States. While China is preparing with a wartime mindset, the United States continues to operate under peacetime conditions.”Trump has amassed a team of foreign policy China hawks, including a number who have warned that the US should focus more on the pacing threat posed by China over the coming decades instead of current conflicts in Ukraine or the Middle East.“Even before the latest restrictions, the US defense industrial base struggled with limited capacity and lacked the ability to scale up production to meet defense technology demands,” she continued. “Further bans on critical minerals inputs will only widen the gap, enabling China to strengthen its military capabilities more quickly than the United States.”China and the US had agreed last month in Geneva to pause the implementation of sky-high tariffs that would have delivered a severe economic blow to manufacturers and consumers in the US, as well as exporters in China.But China maintained export licenses on rare-earth metals used by both defense producers and carmakers that threatened to upend global supply chains and imperil production in the US.In particular, China has a stranglehold on the production and export of samarium, a magnet used in combination with cobalt to provide highly durable magnets used to withstand the intense temperatures in military-grade tech. China produces the entire world’s supply of the rare-earth metal.skip past newsletter promotionafter newsletter promotionIn particular, the magnets are important for the production of guided missiles, satellite-guided “smart bombs”, and aircrafts, including fighter jets, according to Apex Magnets, a supplier.Those supplies of weapons have been depleted through deliveries of missiles and other ordnance to Ukraine and to the Israeli military. Pentagon planners and other officials in the administration of Joe Biden, regularly squared off over whether foreign weapons deliveries expose a US vulnerability in case it faced off with a major military power.In order to break the deadlock, secretary of state Marco Rubio also abruptly announced plans to cancel hundreds of thousands of visas for Chinese students in the US. While publicly that was said as a plan to root out Chinese spies in US higher education, Axios reported that the visa ban was also motivated by China’s obstinance on resuming rare earths exports.The breakthrough comes as Trump is planning to display US military prowess at a parade in Washington DC this weekend that has been seen as an attempt to flex American muscle and reinforce the US president’s bonafides as a supporter of the military.Trump in 2019 ordered the Pentagon to find new sources of procuring rare earth minerals, in particular samarium, because the US did not have the capacity to produce them domestically. The initiative was “essential to the national defense”, he said then. More

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      Trump warms to Nippon Steel, backing ‘partnership’ with US Steel

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      Donald Trump has thrown his weight behind a “partnership” between US Steel and Nippon Steel, months after insisting he was “totally against” a $14.9bn bid by the Japanese firm for its US rival.While the US president stopped short of an all-out endorsement of the takeover, he announced a deal between the two businesses on social media on Friday.Trump’s predecessor, Joe Biden, had blocked Nippon’s acquisition of US Steel, citing national security concerns, during his final weeks in office. The Trump administration has since been reviewing the proposal.Under the arrangement announced by Trump on Friday, US Steel would remain in the US, with its headquarters in Pittsburgh, he stressed, announcing plans to hold a “big rally” in the state next week.“This will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy,” the president claimed on Truth Social, his social network. “The bulk of that Investment will occur in the next 14 months.”Shares in US Steel surged more than 21% after Trump’s announcement on Friday afternoon.Nippon and US Steel did not immediately respond to requests for comment.The United Steelworkers union had urged the president to reject Nippon’s bid, dismissing the firm’s commitments to invest in the US as “flashy promises” and claiming it was “simply seeking to undercut our domestic industry from the inside”.Trump’s position on Nippon’s approach has shifted significantly. Just in December, he declared he was vehemently opposed to the transaction. “As President, I will block this deal from happening,” he wrote. “Buyer Beware!!!”By last month, however, he had somewhat softened his stance, stating only that he wanted US Steel to remain in the US. “We don’t want to see it go to Japan,” he said. More

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      Trump officials deported Vietnamese and Burmese migrants to South Sudan, say lawyers

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      Immigrant rights advocates have accused the Trump administration of deporting about a dozen migrants from countries including Myanmar and Vietnam to South Sudan in violation of a court order, and asked a judge to order their return.The advocates made the request in a motion directed to a federal judge in Boston who had barred the Trump administration from swiftly deporting migrants to countries other than their own without first hearing any concerns they had that they might be tortured or persecuted if sent there.Lawyers for a group of migrants pursuing the class action lawsuit before US district judge Brian Murphy said they learned that nearly a dozen migrants held at a detention facility in Texas were flown to South Sudan on Tuesday morning.Those migrants included an individual from Myanmar whose lawyer received an email on Monday from an official with the US Immigration and Customs Enforcement informing the attorney of the intent to deport his client to South Sudan.The migrant’s lawyers said they learned their client had been flown to South Sudan on Tuesday morning.The spouse of a Vietnamese man who was held at the same detention center in Texas emailed his lawyer, meanwhile, saying he and 10 other individuals were deported as well, according to the motion.The Department of Homeland Security did not immediately respond to a request for comment.skip past newsletter promotionafter newsletter promotionSouth Sudan, the world’s youngest country, gained independence from Sudan in 2011, and has since struggled with armed conflict and poverty. Between 2013 and 2018, fighting between factions loyal to the current president, Salva Kiir Mayardit, and his vice-president, Riek Machar, killed nearly 400,000 people. More

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      This pause in the trade war will be brief. Small businesses, plan accordingly

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      Donald Trump’s massive Chinese tariffs are on pause. The media debated. Wall Street rejoiced. Many of my clients breathed a sigh of relief. Big retailers jumped for joy. But for how long?For starters, the tariffs that weren’t paused – a 10% levy on all Chinese goods, plus a bonus 20% tax that somehow relates to fentanyl, are still in place. When you take into consideration existing tariffs on steel from previous Trump and Biden administrations, the effective tariff rate on Chinese goods is actually closer to 40%, according to an analysis done by the Wall Street Journal.That’s a big number. Maybe that won’t deter people from buying underwear at Target. But for companies that rely on steel and aluminum, semiconductors, synthetic fabrics, plastics, minerals, coatings and solvents as well as certain bearings, motors, pumps and parts, a 30-40% hike is a major impact on their margins, which will affect their spending and investments. Ultimately, the costs of the end products that use these materials will also rise as companies simply pass them down.Just as important, Trump’s animosity towards China – unfounded or not – isn’t going to just magically disappear. He’s called the Chinese cheaters, polluters and thieves. And his past actions – particularly in his first administration – do not bode well for a quick resolution to this issue.In 2018, the Trump administration not only imposed onerous tariffs on China but also issued some very harsh requirements to address trading issues with its closest economic rival.There were specific quotas set to limit our trade deficit. There were demands made to reduce the Chinese requirement forcing American companies to share or transfer technology with their Chinese counterparts. There were rules aimed at stopping the alleged (ha, ha) stealing of data and intellectual property by the Chinese.The problem is that none of this happened. What happened – shortly after the negotiations started – was Covid. And then 2020 and a new administration. But don’t think that Trump won’t raise these issues again. He will, and when this happens we’ll be back to the same place we started: excessive tariffs and a trade war with China.That doesn’t mean that businesses are completely stuck. Many – those that have the funds – are using the tariff suspension to buy up products from China like it’s a fire sale at Costco on Black Friday. Others are contracting with bonded warehouses and storage facilities in free-trade zones to accept products that are temporarily tariff-free, hoping that when they pull materials from these storage units those rates will have come down.I have clients who are aggressively searching for alternative suppliers. I have others who are bringing their assembly and manufacturing back to the US. Those that aren’t able to make these kinds of investments are trying to work out how and how much they can change pricing and what the market will take. A few have already created special line items on their invoices to separate out the tariff charge in an effort to say: “Hey, don’t blame me for this stuff!”My smartest clients started doing this stuff the day after Trump was elected. They listened to what he’d said during the previous couple of years. They read the writing on the wall. Now they’re ahead of the game. Good for them.Companies that didn’t do this – especially small businesses that have fewer resources and are more reliant on just a supplier or two – are in trouble, particularly if they buy from China. For any business still reliant on Chinese suppliers and markets, this pause isn’t going to last as long as you think. There will be a lot more coming in this trade war – and let’s hope it doesn’t turn into an actual war. The outlook is precarious and risky. Trump is volatile and emotional and has a history of knocking China. Plan accordingly. More