US and China Hit Pause on Tariffs

Insight: This week’s “total reset” in trade relations between China and the US has reduced American tariffs on Chinese goods from 145% to 30%, while China will lower its tariffs on US imports from 125% to 10% - at least for the next 90 days. The capital markets responded with a powerful rally, and shares in China, Hong Kong and the US have made up all the ground lost since ‘Liberation Day’.

Impact: The tariff reduction is expected to provide immediate relief for both the Chinese and US economies. JPMorgan lifted its forecasts for China’s GDP growth rate from 4.1% to 4.8%. Cuts to tariffs for solar panels, lithium batteries, and wind turbines are set to enhance China’s dominance in global clean-tech supply chains. E-commerce platforms like Shein and Temu will benefit from reduced ‘de minimis’ tariffs, making it cheaper to ship low-value parcels to the US market. Exporters of smartphones, automotive parts, and industrial equipment will also benefit. Overall, the deal will alleviate stress on global manufacturing supply chains. And while the agreement is temporary for now, it suggests a mutual recognition by both sides of the critical importance of their bilateral economic relationship.

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Asian destinations top global travel wish lists this summer, according to Mastercard's 2025 Travel Trends report. Over half of this year's top 15 summer destinations are in APAC, with Tokyo and Osaka riding a surge in bookings while lesser-known cities such as Fukuoka and Vietnam's Nha Trang have broken into the top 15 for the first time.

Insight: Donald Trump wasn’t on the ballot, but his shadow loomed large over recent elections in both Australia and Singapore. In Australia, MAGA-style politics backfired as opposition leader Peter Dutton leaned into culture-war rhetoric just as Trump slapped tariffs on Aussie exports — a move that sharpened public focus on bread-and-butter issues like inflation and economic security. Meanwhile in Singapore, Trump’s return heightened uncertainty in the Lion City, reinforcing a desire for stability that turned the May 3 vote into a quiet confidence test for the ruling PAP’s fourth-generation leadership. 

Impact: In Australia, voters delivered a decisive win to the Labor Party while Dutton lost his own seat — a clear pivot back to centrist governance and mainstream values that has also led to the election of the Liberal Party's first-ever female leader. While Singapore's PAP extended its dominance by winning 87 of 97 seats in parliament, the city state's Progress Singapore Party lost all representation — signaling that while a desire for political pluralism persists, not all opposition challengers are gaining ground. Across both countries, the message from voters was similar: in a world rattled by external shocks, stability beats spectacle.

Insight: When the Osaka World Expo opened a month ago, expectations were low, with the Japanese media forecasting a flop and worrying about supposedly dangerous methane leaks near the site. Four weeks later, the visitors are flooding in, with tickets sold out on many days and Osaka on track to beat Tokyo in the numbers of tourists it attracts this year. Chinese visitors were up 90% year-on-year in the first quarter – before the Expo even opened.

Impact: Smart marketing and good coordination explain this success. The authorities have eased visa rules, especially for visitors from China, and persuaded airlines to increase flights while reducing fares. This was made possible by a long-planned 30% expansion of slots at Kansai International Airport. On top of that, Osaka, in tandem with local businesses, has used social media and traditional ad campaigns to emphasize local food, culture and ‘experiences’, from visiting temples to theme parks. It goes to show that a number of smaller measures can have a significant cumulative impact.

Public trust in institutions and ‘experts’ is on the decline. However, corporate leaders used to be able to claim that they remained more respected and trusted than politicians, the media and – since the pandemic at least – even scientists and academics. That may no longer be the case. A new survey carried out by the Harris Poll for the Page Society highlights a substantial gap in trust: only 26% of the public in 14 global markets are ‘very confident’ that companies can make a positive impact across key issues from creating economic growth and jobs to dealing with corruption and inequality, to regulating AI. In Japan, one of the markets surveyed, the confidence level is just 14%. 

The worrying message from this richly detailed survey is that while many ordinary people think businesses should play a key role in solving economic and social problems, they see little evidence that they are doing so. The silver lining is that even in more ‘cynical’ markets such as Japan, people, especially younger ones, are willing to be convinced otherwise. The way for companies to do so is to focus on a limited number of topics, to lay out actions they are taking and – critically – to provide context by explaining why they are doing what they are doing.  

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