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US and Chinese officials meet this weekend in Geneva for their first formal talks aimed at resolving a gruelling tit-for-tat tariff war that threatens hundreds of billions in trade and roiled global markets and supply chains.AFP looks at how the trade row between the world’s two economic superpowers is playing out:- What steps have the two sides taken so far? -The United States has raised tariffs on Chinese imports to 145 percent, with cumulative duties on some goods reaching a staggering 245 percent.As well as the blanket levies, China has also been hit with sector-specific tariffs on steel, aluminium and car imports.Sales of Chinese goods to the United States last year totalled more than $500 billion — 16.4 percent of the country’s exports, according to Beijing’s customs data.Beijing has vowed to fight the measures “to the end” and has unveiled reciprocal tariffs of up to 125 percent on imports of American goods, which totalled $143.5 billion last year, according to Washington.China has filed complaints with the World Trade Organization (WTO), citing “bullying” tactics by the Trump administration.And it has gone after US companies, scrapping orders for Boeing planes, probing Google for “anti-monopoly” violations and adding fashion group PVH Corp. — which owns Tommy Hilfiger and Calvin Klein — and biotech giant Illumina to a list of “unreliable entities”.Beijing has also restricted exports of rare earth elements — critical for making a wide range of products including semiconductors, medical technology and consumer electronics.- What’s been the impact? – Beijing has long drawn Trump’s ire with a trade surplus with the United States that reached $295.4 billion last year, according to the US Commerce Department’s Bureau of Economic Analysis. Chinese leaders have been reluctant to disrupt that status quo.But an intensified trade war could mean China cannot peg its hopes for strong economic growth this year on exports, which hit a record high in 2024.US duties further threaten to harm China’s fragile post-Covid economic recovery as it struggles with a debt crisis in the property sector and persistently low consumption.The tariff war is already having an impact in the United States, with uncertainty triggering a manufacturing slump last month and officials blaming it for an unexpected economic contraction during the first three months of the year.”Both countries have surely found out that it is not so easy to fully decouple,” Teeuwe Mevissen, senior China economist at Rabobank, told AFP.”Both the US and China lose economically with the current trade war,” he said, adding that even in the case that one side gains the upper hand “it is still worse off economically than before the trade war started”.The head of the WTO warned in April that the US-China standoff could cut trade in goods between the two countries by 80 percent.Beijing announced a raft of interest rate cuts on Wednesday aimed at boosting consumption — a possible sign that it is starting to feel the pinch.Analysts expect the levies to take a significant chunk out of China’s gross domestic product, which Beijing’s leadership have targeted to grow five percent this year.Likely to be hit hardest are China’s top exports to the United States — this includes everything from electronics and machinery to textiles and clothing.And because of the crucial role Chinese goods play in supplying US firms, the tariffs may also hurt American manufacturers and consumers, analysts have warned.- Is a breakthrough possible? -Both sides insist that economic pressures have driven the other to seek negotiations.But while markets have welcomed the talks, a major breakthrough in Geneva seems unlikely.China has insisted its position that the United States must lift tariffs first remains “unchanged” and vowed to defend its interests.US Treasury Secretary Scott Bessent has said the meetings will focus on “de-escalation” — and not a “big trade deal”.But analysts do expect some form of tariff reduction to be announced following Saturday’s ice-breaking exercise.”One possible outcome of the Switzerland talks is an agreement to pause most, if not all, of the tariffs that have been imposed this year while negotiations take place,” Bonnie Glaser, managing director of the German Marshall Fund’s Indo-Pacific program, told AFP.Lizzi Lee from the Asia Society said she expected “a tentative, symbolic gesture — designed to lower temperatures, not resolve core disputes”.”Stabilisation and guardrails are the most likely outcomes.”

Surrounded by samples of silk and glittering tweed in one of China’s largest fabric markets, textiles exporter Cherry said she was anxiously awaiting the result of trade talks with the United States this weekend.Her company, which relies on US customers for around half its client base, is one of many caught in the crosshairs as the standoff between Washington and Beijing has escalated this year. Cherry has already had US orders cancelled, and is desperately hoping the negotiations starting Saturday in Geneva will result in the rolling back of the reciprocal tariffs that make doing business almost impossible.”The situation will be very bad if this continues,” she said, sceptical of claims her industry would be able to weather prolonged levies.”A few months ago I heard people say they’d had many containers (of goods) being cancelled… Some factories have already had to stop production.” Sales to the United States made up 18 percent of China’s total textiles and apparel exports in 2024, according to Moody’s Ratings. A significant proportion of that comes from the eastern manufacturing powerhouse province of Zhejiang, where the labyrinth-like Keqiao China Textile City is based in the city of Shaoxing. With a listed 26,000 shops selling everything from velvet to rayon to fake fur, it is touted as one of the world’s busiest fabric hubs. But customers were few and far between when AFP visited on a day of torrential rain this week, with vendors’ spirits largely dampened too.  “Of course I am afraid,” said one woman surnamed Li, who added that business was already affected by the global turmoil.  “This is my job — I rely on it to support my family… I hope for a good outcome (for the talks).”- ‘Lose-lose scenario’ -The Geneva talks are the first official public engagement between the two sides aimed at resolving the stand-off triggered by US President Donald Trump’s wide-ranging tariffs. The subsequent tit-for-tat means many Chinese goods entering the United States now face duties of 145 percent — with some specific sectors even higher — while Beijing has hit back with 125 percent levies on most US goods.   One seller in Keqiao market described the situation as a “lose-lose scenario”.  Some of her colleagues’ US customers have agreed to pay a 30 percent non-refundable deposit to initiate production, on the understanding that the whole order can be cancelled if the final tariff level after negotiations is still too high. If that happens, everyone will lose money. “We basically don’t dare to take US orders anymore,” said 66-year-old Zhou, standing in front of swaths of khaki in various hues. “The cost price can’t even be covered, especially with such high tariffs added on.”For companies like his daughter’s, which dealt mainly with US clients, “the impact is huge”, he said. “The best outcome would be for everyone to sit down and talk things through — it would be good for everyone, right?” Even the hint of de-escalation has brought some back to the table, with one exporter telling AFP a client who had suspended orders had recently given the go-ahead for production to begin.But at a ski suit workshop in a cross-border e-commerce centre a few kilometres away, 31-year-old Xiao Huilan said a lot of local companies had lost out completing production for orders that had subsequently been reduced or held off. “In the short term, we can manage, but in the long run, businesses can’t sustain it,” she said. “In a trade war, no one really wins. What we hope for is reconciliation, where everyone can coexist and prosper together.”

Most Asian equities rose Friday on growing optimism that the worst of Donald Trump’s trade war is past after he reached a deal with Britain and suggested he could lower tariffs on China as officials prepare for high-stakes talks this weekend.The mood among investors has improved substantially since the US president unveiled his “Liberation Day” blitz last month, sending markets spinning and fuelling global recession fears.Several countries have lined up to hold talks with Washington to avert the worst of the duties that range from 10 percent to as high as 145 percent on China — Trump’s main target.On Thursday Britain became the first to announce a deal that reduces tariffs on British cars and lifts them on steel and aluminium, while in return Britain will open up markets to US beef and other farm products.While there are several areas that still need discussing, Trump and Prime Minister Keir Starmer hailed the “historic” deal, with the US president saying it should be seen as a template for others.But analysts said traders were more excited about the Republican leader’s comments on the upcoming talks with China in which he hinted at an easing of the stiff measures aimed at the world’s number two economy. That could see Beijing dial back some of its own 125 percent tariffs on US goods.Trump told reporters that he thought the negotiations would be “substantive” and when asked if reducing the levies was a possibility, he said “it could be”.”We’re going to see. Right now you can’t get any higher. It’s at 145 percent so we know it’s coming down. I think we’re going to have a very good relationship.” Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are set to meet Chinese Vice Premier He Lifeng in Switzerland on Saturday and Sunday, the first talks between the superpowers since Trump unveiled his tariffs.The US president also flagged efforts at home to push through the tax cuts he promised during the election campaign, adding: “This country will hit a point that you better go out and buy stock.”Now, let me tell you this, this country will be like a rocket ship that goes straight up.”Stephen Innes, of SPI Asset Management, said: “As important as the UK deal was, Trump’s tone on China was the real signal for markets — and it handed the risk-on baton straight to Asia in a friendly, optimistic fashion. “The president all but greenlit the idea that the days of punitive standoff might give way to negotiated momentum.”Asian markets extended the week’s rally and tracked gains on Wall Street.Tokyo jumped more than one percent on hopes for Japan’s trade talks. However, Commerce Secretary Howard Lutnick warned agreements with Japan and South Korea could take longer to reach, while adding that there was “a lot of work” in striking a deal with India.Hong Kong, Sydney, Wellington, Taipei, Manila and Jakarta also advanced, though Seoul retreated. Shanghai also dropped ahead of key Chinese trade data that is expected to see a sharp drop off from March owing to the tariffs war.The return of some confidence to the market also helped bitcoin recover, pushing it back above $100,000 for the first time since February. The cryptocurrency struck $104,159 on Thursday, pushing it towards the record above $109,000 seen in January.- Key figures at around 0230 GMT -Tokyo – Nikkei 225: UP 1.5 percent at 37,478.58 (break)Hong Kong – Hang Seng Index: UP 0.4 percent at 22,860.47Shanghai – Composite: DOWN 0.3 percent at 3,343.29Euro/dollar: DOWN at $1.1201 from $1.1230 on ThursdayPound/dollar: DOWN at $1.3219 from $1.3249Dollar/yen: UP at 145.92 yen from 145.82 yenEuro/pound: UP at 84.76 pence from 84.73 penceWest Texas Intermediate: UP 0.3 percent at $60.10 per barrel Brent North Sea Crude: UP 0.3 percent at $63.05 per barrelNew York – Dow: UP 0.6 percent at 41,368.45 (close)London – FTSE 100: DOWN 0.3 percent at 8,531.61 (close)

Japanese gaming giant Nintendo forecast Thursday that it would sell 15 million units of its hotly awaited Switch 2 console in the current financial year but warned US tariffs could hit its bottom line.The successor to the Switch — the third best-selling console ever behind Sony’s PlayStation 2 and the Nintendo DS — is set to hit shelves worldwide on June 5.While the “Super Mario” maker is diversifying into theme parks and hit movies, around 90 percent of its revenue still comes from the Switch business, analysts say.However the unit sales forecast is more conservative than the 16.8 million expected in a survey of Bloomberg economists.The Switch, a handheld and TV-compatible device that became a must-have gadget during pandemic lockdowns, has sold around 150 million units since its launch in 2017.For the financial year that ended on March 31, Nintendo reported a 43.2 percent fall in full-year net profit to 278.8 billion yen ($1.9 billion), as gamers wait to splash their cash on the Switch 2.It sold 10.8 million Switches, down 31.2 percent year-on-year, while software sales hit 155.4 million units, a decrease of 22.2 percent.Nintendo forecast a net profit of 300 billion yen for the current financial year but warned that US trade tariffs could impact its earnings.”Changes to tariff rates may affect our financial forecast. We will continue to monitor the situation to respond to changes in market conditions,” it said.- Hot pre-orders -The company last month revealed details about the Switch 2, a hybrid console like its predecessor.However the price has raised eyebrows at over a third more than the original Switch in major markets including the United States, where it will cost $449.99.A Japanese-only version for domestic consumers will cost 49,980 yen ($350).Nintendo delayed pre-orders for the Switch 2 in the United States by two weeks as it assessed the fallout from President Donald Trump’s trade levies.But last month it boasted of higher-than-expected demand in Japan for pre-orders of the new console.”If final tariffs do not come down… then prices will need to rise further, which will dampen demand,” David Gibson of MST Financial told AFP ahead of the earnings release.”But keep in mind Nintendo tends to set the price of its hardware and not change them,” he said.Since Trump’s first term, Nintendo has been shifting production from China to Vietnam, Gibson said.”So it is likely that 70 percent plus of shipments to the USA for Switch 2 can come from Vietnam and tariffs can be minimised.”The Switch 2 will have eight times the memory of the first Switch, and a 7.9-inch (20-centimetre) screen — up from 6.2 inches for the original.Its controllers, which attach with magnets, can also be used like a desktop computer mouse.A new function will enable users to temporarily share games with friends and play together.News that the next title in the Grand Theft Auto video game series had been postponed to May 2026 is a positive for Nintendo, Atul Goyal of Jefferies said this month.”It sure makes Nintendo’s competition far less intense” in terms of game launches, he wrote in a note.”We earlier wrote that the 2025 holiday season could belong to both Sony (GTA6) and Nintendo (Switch 2 games),” he said.”But it now looks that the console for this holiday season is” the Switch 2, he predicted.

Japanese auto giant Toyota forecast on Thursday a 35 percent year-on-year drop in net profit for the current financial year, citing Donald Trump’s vehicle tariffs among other factors.Carmakers have been among the hardest hit by the US president’s multi-pronged assault on free trade.On top of a 25 percent tariff already placed on finished imported cars, the Trump administration on Saturday imposed a similar duty on auto parts including engines and transmissions.For the 2025-26 financial year that began in April, Toyota now forecasts net profit of 3.1 trillion yen ($21.6 billion).”The estimated impact of US tariffs in April and May 2025 have been tentatively factored in,” the world’s top-selling automaker said in a statement.The company logged net profit of nearly 4.8 trillion yen in the 12 months to March 31, down 3.6 percent year-on-year but beating its forecast issued in February of 4.5 trillion yen.As of this month, it estimated the tariffs would impact 2025-2026 operating profit to the tune of 180 billion yen.Asked about the more long-term impact of the tariffs, Toyota’s president and CEO Koji Sato told reporters the situation was “difficult to predict right now”.”US tariffs are currently being negotiated between governments, and details are still fluid,” he said.Toyota exports 500,000 vehicles annually to the United States from Japan, Sato said.”So in the short-term we are adjusting shipments… while mid- to long-term, we will pursue the local development of products that suit local customers.”But the company will aim to maintain its production in Japan of three million vehicles annually, he said, “from the viewpoint of protecting supply chains and earning foreign currencies by exporting”.- ‘Benchmark’ forecast -Toyota shares were trading down 1.3 percent after the earnings announcement.The automaker’s “influence and position” mean its profit forecasts are being closely watched in Japan, Bloomberg Intelligence auto analyst Tatsuo Yoshida told AFP.”The whole country including suppliers would be left at a loss if Toyota doesn’t issue some kind of benchmark” on the impact of the tariffs, he said ahead of Thursday’s results.Automobiles accounted for around 28 percent of Japanese exports to the United States last year.Trump moved to soften the details of his tariffs on automakers late last month — signing an executive order to limit the impact of overlapping levies on firms.The president also released a proclamation that gives the industry a two-year grace period to move supply chains back to the United States.Toyota sold 10.8 million vehicles worldwide in 2024, holding onto its crown as the world’s top-selling automaker.”Automakers are doing what they can in trying to shift production to the United States, even though there are no huge changes (right away) as shifting production takes time,” Takaki Nakanishi of auto sector consulting firm Nakanishi Research Institute told AFP.Trump last month hit out at the wide difference between Japanese car exports to the United States and those going the other way.Toyota is the second-top-selling automaker in the United States, where it shifted more than 2.3 million vehicles last year, while US industry leader General Motors sold just 587 Chevrolets and 449 Cadillacs in Japan.Experts say Japan’s narrow roads — too narrow for many US models — and Japanese cars’ reputation for quality and fuel efficiency are some reasons for this.”They don’t take our cars, but we take MILLIONS of theirs!” Trump said in April, accusing Japan of treating its ally “very poorly on trade”.

The European Union is accelerating free trade talks with Asia following hefty tariffs by US President Donald Trump, the bloc’s trade chief said Wednesday.Trump has slapped a series of higher tariffs on Europe since March and in his biggest move, he imposed a 20-percent tariff on a majority of EU goods last month — before announcing a 90-day pause that is due to expire in July.Negotiations with Washington are a priority but such talks will not come “at any cost”, EU Trade Commissioner Maros Sefcovic told reporters in Singapore.”I would like to underscore that in today’s geopolitical context, we are making sure that the EU is not putting all its eggs in one basket,” he said.”Bilaterally, we are accelerating the negotiations with Indonesia, the Philippines, Thailand and Malaysia,” he said.All four countries are key members of the 10-member Association of Southeast Asian Nations (ASEAN), a region of more than 650 million people.”And we are also stepping up engagement with India. We just had another round of negotiations just last week,” said Sefcovic.He was speaking in Singapore after signing a digital trade agreement between the EU and the city-state on Wednesday.”Our goal here is also very clear: to keep signing agreements and remain a reliable, trusted and predictable partner in a rapidly shifting global landscape,” he said.The commissioner said the EU is also looking at “potential enhanced cooperation” with members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).  – Signs of ‘de-escalation’ -The EU has a surplus of 154 billion euros ($175 billion) against the United States in goods trade, but is in deficit for 104 billion euros in services, Sefcovic said, citing data from the European Statistics Office.This leaves the EU with a surplus of 50 billion euros, which can be rebalanced by buying more liquefied natural gas, soya beans and high-end computer chips from the United States, Sefcovic said.Trump has said the deficit is several hundred billion dollars a year.There is currently a “baseline” levy of 10 percent on goods from the 27-country EU and other nations around the world.Negotiators are now seeking to avoid a full trade war if the higher tariffs come into force in July.The EU will also be looking for signs of “de-escalation” when US and Chinese officials meet in Switzerland for tariff talks this weekend, the commissioner said.Trump has imposed tariffs totalling 145 percent on goods from China. Beijing has retaliated with 125 percent levies on imports from the United States.

China vowed Wednesday to defend “justice” in upcoming trade talks with the United States — their first since Donald Trump unveiled sweeping tariffs that shook global markets.Since the US president returned to the White House in January, his administration has imposed tariffs totalling 145 percent on goods from China, with some sector-specific measures stacked on top.Beijing has retaliated with 125 percent levies on imports from the United States, along with more targeted measures.Treasury Secretary Scott Bessent and US Trade Representative (USTR) Jamieson Greer will attend the talks in Switzerland on behalf of the United States, their offices said.Bessent told Fox News that the sides would hold meetings on Saturday and Sunday intended to lay the groundwork for future negotiations.”We will agree what we’re going to talk about. My sense is that this will be about de-escalation, not about the big trade deal,” Bessent told “The Ingraham Angle” show.”We’ve got to de-escalate before we can move forward,” he added.The talks will take place in Geneva, a spokesperson for the Swiss foreign ministry confirmed to AFP. Bern “welcomes the trust placed in Switzerland”, they added.Vice Premier He Lifeng will attend on Beijing’s behalf, China’s foreign ministry announced.The commerce ministry in Beijing vowed the country would “defend justice” and stand by its principles during the talks.”If the US wants to resolve the issue through negotiations, it must face up to the serious negative impact of unilateral tariff measures on itself and the world,” a spokesperson said.”If the US talks in one way and acts in another, or even attempts to continue to coerce and blackmail China under the guise of talks, China will never agree.”Beijing, the spokesperson vowed, would not “sacrifice its principled position and international fairness and justice to seek any agreement”.China’s foreign ministry also said the talks were taking place at the “request of the United States” and that its position that Washington must lift tariffs was “unchanged”.”But any dialogue must be based on equality, respect and mutual benefit. No form of pressure or coercion will not work on China,” spokesman Lin Jian told a regular briefing.The USTR announced that Greer would also meet “his counterpart from the People’s Republic of China to discuss trade matters”, without naming He. The tit-for-tat tariffs have left the two nations with cripplingly high levies that have shocked financial markets and reportedly caused a sharp slowdown in bilateral trade.”This isn’t sustainable, as I have said before, especially on the Chinese side, 145 percent, 125 percent is the equivalent of an embargo. We don’t want to decouple. What we want is fair trade,” Bessent said.

China on Wednesday eased key monetary policy tools in a bid to boost its ailing economy as it struggles with the effects of weak consumption and Donald Trump’s trade war.The country’s leaders are battling to reignite growth, which has not fully recovered since the Covid-19 pandemic, crippled by sluggish domestic demand and a protracted property sector crisis.That has been compounded by a punishing trade standoff that has seen the US president impose tariffs reaching 145 percent on many Chinese products and Beijing retaliate with 125 percent duties on imports from the United States.On Wednesday, the head of China’s central bank Pan Gongsheng told a news conference that Beijing would cut a key interest rate and lower the amount banks must hold in reserve in order to boost lending.He said Beijing’s policies aimed “to support technological innovation, boost consumption, and promote inclusive finance, among other areas”.A persistent crisis in the property sector — once a key driver of growth — also remains a drag on the economy.In an effort to boost demand, Pan also said the bank would cut the rate for first-time home purchases with loan terms over five years to 2.6 percent, from 2.85 percent.The moves represent some of China’s most sweeping steps to boost the economy since September.- More help needed -But analysts pointed to a continued lack of actual stimulus funds needed to get the economy back on track.”The policy measures released today are positive for the market and the economy,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.”What is missing in this conference is new fiscal policy measures, which I think may be reserved for the future, if the economy suffers from the trade war and shows clear signs of slowdown,” he added.Gary Ng, senior economist for Asia Pacific at Natixis, told AFP “it will take more to support growth”.”If economic data does not improve, we will likely see more actions down the road,” he said.Economists have warned that the disruption in trade between the tightly integrated US and Chinese economies could threaten businesses, increase prices for consumers and cause a global recession.Beijing last month blamed a “sharp shift” in the global economy for a slump in manufacturing.And exports soared more than 12 percent in March as businesses rushed to get ahead of Trump’s swingeing tariffs.Beijing has said it is targeting annual growth this year of around five percent — the same as last year and a figure considered ambitious by many economists.China last year announced a string of aggressive measures to reignite its economy, including interest rate cuts, cancelling restrictions on homebuying, hiking the debt ceiling for local governments and bolstering support for financial markets.But after a blistering market rally fuelled by hopes for a long-awaited “bazooka stimulus”, optimism waned as authorities refrained from providing a specific figure for the bailout.Analysts now think the impact of tariffs may lead Beijing to reconsider its caution and push ahead with fresh stimulus.

Weeks after Donald Trump’s global tariff bombshell, Jeff Chen’s factory in Taiwan is as busy as ever turning out carbon and alloy wheels for high-end bicycles bound for US and European markets.But he wonders how much longer it will last. The US president’s initial 32 percent tariff on Taiwan stunned the island’s bicycle manufacturers, who were racing to meet orders ahead of the northern summer before the new toll was announced.Some US customers immediately cancelled or postponed shipments, only to reverse their decision when the hefty tariffs on Taiwan and many of America’s trading partners were paused for 90 days.With a global 10 percent levy still in place and no clarity on what happens once the three months are up, Taiwanese bicycle companies and US buyers are in limbo.”They don’t know what to do. There’s no time to respond,” said Chen, general manager of Joy Group, which makes wheels and hubs in Taichung. Joy Group, founded by Chen’s grandfather in 1971, is one of more than 900 companies assembling bicycles or making components, including wheels, pedals and frames, mostly in central Taiwan, the island’s manufacturing heartland.Some companies have received a surge in orders as US customers rush to import bicycles and components before the end of the 90-day period.Others, like Joy Group, have seen little change in demand, which Chen put down to inventory leftover from Covid-19, when retailers stocked up to meet surging demand for bicycles.Chen said US customers had passed on the 10 percent tariff to consumers, but a 32 percent levy could put the brakes on further orders, with inevitable knock-on effects in Taiwan.- ‘Hidden champions’ -“If we are getting affected, then the company would need to think how to cut down… everybody will be facing the same issues,” said Chen, whose company also has four factories in China.Taiwan has long been a key player in the global bicycle industry, but it faced an existential crisis more than two decades ago when an ascendant China drew many of the island’s manufacturers to its shores.Rather than try to compete with China’s cheaper, mass-produced two-wheelers, Taiwanese companies collaborated to upgrade their manufacturing techniques and produce quality bikes and components for high-end markets, mainly in Europe and the United States.While Taiwan’s export volume has fallen dramatically from around 10 million in the 1990s to 1.3 million in 2024, exacerbated by the pandemic glut, the average export price of its bicycles has risen sharply.A traditional bike was valued at US$1,131 last year and an e-bike US$1,848, industry data and analyst reports show. China, which exported more than 44 million bikes in 2024, had an average price of US$57.Taiwan bicycle industry expert Michelle Hsieh said the island’s success in targeting the high-end market was down to “hidden champions” in the supply chain.Small and medium-sized companies — a hallmark of Taiwan’s manufacturing sector — were highly specialised and flexible, Hsieh said, making them “indispensable” in the global market. “They are making things that other people cannot make so they have that competitive advantage,” said Hsieh, a sociologist at Academia Sinica in Taipei.Trump’s hopes that higher tariffs will force firms to move their production to the United States were dismissed by Taiwanese and American bicycle manufacturers as fanciful.- ‘Like a big family’ – It would be “nearly impossible” to set up a factory in the United States in the next three to five years, Taiwanese bicycle company Giant told AFP, citing higher costs, labour challenges and the lack of a “bicycle industry cluster”. “Taichung is the absolute centre of the bicycle industry,” said Tim Krueger, industry veteran and chief executive of US-based Esker Cycles, which imports frames and parts from Taiwan for its mountain bikes. “That’s where the expertise in the whole world is on how to properly manufacture bicycles.”Some bike makers in Taiwan look set to benefit from the 145 percent tariff on Chinese products in the short term, with US customers seeking out Taiwanese suppliers, Hsieh said.But Tsai Po-ming of the Cycling & Health Tech Industry R&D Center, which was set up in 1992 to help Taiwan’s industry become more competitive, said there could also be negatives. Chinese manufacturers might try to offload their lower-end bikes in Europe if Trump’s tariffs fuelled inflation, Tsai told AFP.”Consumers might feel that the prices are too high, and although our products are mid to high-end in quality, they might prefer to buy lower priced models instead,” he said.At Pacific Cycles’ factory near Taipei, workers assembled fold-up bicycles mostly destined for Europe and Asia.While the company has little direct exposure to the US market, president Eva Lin said if one of its suppliers was hurt by the tariffs, then Pacific Cycles would be affected.”The complete industry is like a big family,” she said.”No one can escape from the impact.” 

Visitors mill around a bright red hilltop pagoda in southwestern China, gazing down at a sprawling cigarette factory whose deadly output has put an otherwise unremarkable city on the map.China is home to a third of the world’s smokers and tobacco-related diseases are a major cause of death in the country — a trend likely to worsen as its population rapidly ages.Beijing hopes to dramatically reduce that by the end of the decade, but even the government machine is struggling to achieve that as it clashes with a powerful state tobacco monopoly and local economies reliant on the crop.That contradiction smoulders in Yuxi, Yunnan province, whose nascent tourism businesses and local farmers thrive on its history of cigarette production.A mostly agricultural area where incomes lag behind the national average, the city has firmly hitched its fortunes to tobacco, which accounted for almost a third of its gross domestic product in the first quarter of last year, according to official figures.That income helps “pay for our children’s schooling or to build a house”, farmer Li told AFP as her husband ploughed furrows into a hilltop field.She said her family can earn up to 60,000 yuan ($8,300) annually from the tobacco harvest, far exceeding other crops with more variable prices.Tobacco also brings tourists to Yuxi — local firm Hongta, or “red tower”, is one of China’s most prominent cigarette brands.Named for a centuries-old pagoda painted scarlet after the country’s communist takeover, it is owned by state-run monopoly the China National Tobacco Corporation and offers visitors factory tours, a museum and a tobacco-themed cultural park.- Up in smoke -“Yuxi’s cigarettes are quite famous, so we’ve always wanted to come and have a look,” said a tourist surnamed Dong from the northeastern city of Dalian.Foreign cigarettes, he claimed, “don’t put the same demand on quality”.China is the world’s largest producer and consumer of tobacco and has more than 300 million smokers, according to the World Health Organization.As trains pull into stations across China, passengers frequently jump off for a quick cigarette on the platform before continuing their journey.Indoor smoking bans are loosely enforced and the stench of tobacco smoke is commonplace, from public toilets to taxis and late-night eateries.Beijing says it aims to reduce the number of smokers from around a quarter of the population to a fifth by 2030.Progress has been slow. The number of smokers fell just 14 percent between 2010 and 2022, well below the average for richer nations, a study by a Chinese think tank found last year.Policymakers must also navigate the interests of China Tobacco, which controls virtually all of the domestic production, processing and distribution.The company has a chokehold on a domestic tobacco sector that last year generated a record 1.6 trillion yuan ($220 billion) in taxes and profits.The State Tobacco Monopoly Administration, responsible for industry oversight, has been criticised by researchers for being essentially the same organisation under a different name.This means the country’s largest cigarette manufacturer is its own regulator, in what has been decried by public health advocates as a clear conflict of interest and an impediment to effective tobacco controls.The firm touts its contribution to the economy, but researchers into China’s tobacco market argue that the revenue does not outweigh the health costs.- Changing times -A recent study found that the annual economic cost of cigarette smoking in China — estimated at 2.43 trillion yuan in 2020 — was approximately 1.6 times greater than the gains from the industry.”Stronger tobacco control policies can reduce smoking prevalence without severely harming government revenue,” Qinghua Nian at the Institute for Global Tobacco Control at Johns Hopkins Bloomberg School of Public Health told AFP.Efforts to curb cigarette consumption at home have coincided with an overseas push from Hongta and other tobacco brands.The country exported more than $9 billion in tobacco and tobacco products in 2023, up from less than $1.5 billion five years prior, according to the United Nations.Beneath Yuxi’s looming red pagoda, tourist Dong said smoking was slowly losing its appeal among younger generations.”As society develops, some things are progressing and it’s better to smoke less,” he said.”My children and grandchildren don’t smoke at all.”But nearby, a worker surnamed Long watching over tobacco seedlings in a greenhouse at a plant nursery said the crop was still a good way to earn a living.”Tobacco used to be a couple of yuan per pound, but now it’s a couple of dozen yuan,” the 54-year-old said.”This critical industry is still a good source of income for farmers.”