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Sky-high tariffs imposed on China by US President Donald Trump have triggered a slump in factory orders, manufacturers told AFP this week — with some fearing business may never return.China’s vast southern province of Guangdong, crisscrossed with factories making everything from clothing to electronics, has long been the country’s biggest manufacturing hub.For decades, it has churned out products for the insatiable American consumer base, offering low prices few can compete with and serving as a key driver in China’s meteoric rise to global economic superpower status.But Trump’s drive to bring manufacturing back to the United States and launch of a brutal trade war with China now threatens to upend that — adding to the country’s already grim economic outlook.Xiao Junyi, a clothing factory owner in the province’s largest city of Guangzhou, told AFP that the US market had accounted for between 20 to 30 percent of orders.But after the tariffs were announced, “we were genuinely affected,” he said.”Our sales and orders clearly declined.”Many of his factory’s products are sold to consumers in the United States via Temu, the low-cost overseas e-commerce platform operated by Chinese retail giant PDD Holdings.In response to the US tariffs — now 145 percent for most products and as much as 245 percent on others — Temu issued a notice saying there will be reduced advertising in the US market going forward, Xiao said.The 24-year-old factory owner said he was hoping to find other markets for his clothes.”Aside from the United States, we can do business with the whole world,” he said.But he admitted it was “really unlikely” that other countries would replace the US market.”The United States is a truly developed country, and the order volume is bigger.”- ‘Boundless competition’ -Nearby, businesspeople from across the globe convened for the opening phase of the Canton Fair — a colossal trade show held every spring and autumn.The event serves as an opportunity for merchants from around the world to meet face-to-face with Chinese manufacturers and assess their products up close, establishing new supply arrangements or shoring up old contacts.But buyers from the United States this year were few and far between.Those that were there declined to comment when asked by AFP which products they were interested in — or if the tariff war would complicate business.One Chinese firm keen to make contacts was Wosen Lighting Technology, a supplier to US e-commerce juggernaut Amazon.”It’s a new round in the trade war,” Andy Lin, the firm’s business development manager, told AFP at one of its factories in nearby Zhongshan.”It becomes a case where you add tariffs and I also add tariffs — then it turns into a boundless competition,” said Lin.”This situation won’t be able to last long, because after all, it has very real impacts on all countries,” she added.”I think it will especially affect the lives of the American people.”- ‘Manufacturing powerhouse’ -The downturn in shipments to the United States could also affect the local manufacturing industry, for which Wosen provides several hundred jobs.Nevertheless, factories visited by AFP this week in Guangdong were buzzing with activity as workers sat at production lines, the air filled with the clanging and whirring of conveyor belts.Many manufacturers admitted the heightened trade war with the United States will cause turbulence for businesses.But they hoped that would encourage them to find new customers in other countries.The tariffs are also likely to cause pain among American consumers, with US Federal Reserve boss Jerome Powell warning this week that they may increase inflation in the country.As for China’s reciprocal tariffs on US goods, Lin said she was not concerned about it affecting her lifestyle — she is used to buying things on local e-commerce platforms from Chinese manufacturers.”They can all basically be produced domestically,” said Lin.”After all, China is a manufacturing powerhouse. If you are not looking for certain special products, the impact will be small.”

Asian markets were mixed in holiday-thinned trade Friday as investors keep tabs on countries’ tariff talks with the White House, while Donald Trump’s remarks that he was reluctant to hike levies on Beijing even more provided a little support.Governments around the world are lining up to visit the US president’s team as they look to pare back eye-watering levies imposed by the United States for what he calls years of being “ripped off” and as he looks to reshore manufacturing.While several officials have been in touch, Japanese negotiator Ryosei Akazawa’s trip this week was seen as a “canary in the mine” owing to the countries’ long-running relationship.He met Trump, Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent on Wednesday without making any immediate progress, though a second round of talks is scheduled for the end of April.Trump had earlier hailed “big progress” in the negotiations.Hopes most of the measures against US trading partners can be rowed back have soothed some market anxiety after the white-knuckle ride at the start of the month, though uncertainty caused by the president’s tendency to flip-flop is keeping investors on edge.Trump on Thursday offered a little optimism when he said he was reluctant to keep hiking rates on China as that could halt trade between the two economic superpowers, adding that Beijing had been reaching out to him.”I have a very good relationship with President Xi (Jinping), and I think it’s going to continue,” he said. “And I would say they have reached out a number of times.”His remarks came after Bloomberg reported that China could be open to dialogue but wanted to see some measures beforehand, including reining in some cabinet members’ anti-Beijing comments.Still, Washington unveiled new port fees on Chinese built and operated ships Thursday as it looks to boost its domestic shipbuilding industry and curb China’s dominance in the sector.The move stems from a probe launched under Joe Biden’s administration but could further ratchet up tensions.After a mixed lead from Wall Street, Asia fluctuated.Tokyo led the gains even as data showed Japanese inflation accelerated last month as rice prices more than doubled.Seoul and Taipei also rose while Shanghai dipped.Hong Kong, Sydney, Singapore, Mumbai, Jakarta, Wellington and Manila were closed for holidays.Investors are also eyeing developments at the Federal Reserve as Trump hit out at boss Jerome Powell, who warned the sweeping tariffs were “highly likely to generate at least a temporary rise in inflation”.The president slammed Powell for not lowering interest rates, as the ECB has done, and said his “termination cannot come fast enough”.Speaking to reporters at the White House, he said Powell would “leave if I ask him to”, adding “I’m not happy with him. I let him know it and if I want him out, he’ll be out of there real fast, believe me”.Earlier, in a post on Truth Social, he said his “termination… cannot come fast enough”. Michael Hewson at MCH Market Insights pointed out that US inflation was far higher than the Fed’s two percent target and the tariff policy had created “significant ripples in the US economy, prompting a collapse in consumer confidence in the process”.”Trump is amping up the pressure on the Fed to cut rates quickly,” he wrote in a note. “Sadly, for Trump his very policies are the ones causing the Fed to pause, with Powell warning that the sheer size of the tariffs is complicating the central bank’s job.”The chaos being unleashed by the US administration is also giving business cause for concern.”- Key figures at 0230 GMT -Tokyo – Nikkei 225: UP 0.6 percent at 34,583.29 (break)Shanghai – Composite: DOWN 0.4 percent at 3,268.89Hong Kong – Hang Seng Index: closed for a holidayEuro/dollar: UP at $1.1371 from $1.1370 on ThursdayPound/dollar: UP $1.3273 at $1.3268Dollar/yen: DOWN at 142.35 yen from 142.39 yen Euro/pound: DOWN at 85.66 pence from 85.67 penceWest Texas Intermediate: UP 3.5 percent at $64.68 per barrelBrent North Sea Crude: UP 3.2 percent at $67.96 per barrelNew York – Dow: DOWN 1.3 percent at 39,142.23 (close)London – FTSE 100: FLAT at 8,275.66 (close)

Rice prices in Japan last month were almost twice what they were a year earlier, official data showed Friday, as core inflation accelerated in the world’s number four economy.The price of the grain has soared in recent months, prompting Japan’s government to release some of its emergency stockpile into the market.Excluding fresh food, consumer prices rose 3.2 percent in March year-on-year compared to 3.0 percent in February — in line with market expectations.Excluding energy as well, prices rose 2.9 percent last month, up from 2.6 percent in February. But overall inflation eased to 3.6 percent from 3.7 percent.The data is likely to strengthen expectations that the Bank of Japan will hike interest rates, with inflation above the BoJ’s target of two percent for almost three years.However, uncertainty caused by US President Donald Trump’s trade policies could prompt the central bank to stick to its current stance for now.The internal affairs ministry said that the prices of both fresh and non-fresh food products rose, as did hotel fees.But grain prices saw the biggest increase, rising 25.4 percent. Rice prices logged an enormous 92.5-percent jump, driven by a shortage of the staple.- Rice shock -Factors behind the shortfall include poor harvests due to hot weather in 2023 and panic-buying prompted by a “megaquake” warning last year.Record numbers of tourists have also been blamed for a rise in consumption while some traders are believed to be hoarding the grain.The government began auctioning its rice stockpile last month, the first time since it was started in 1995.The government has so far released around 210,000 tonnes and plans to auction another 100,000 tons this month, authorities said earlier this month. Rice also appears to have been a factor in Trump’s hefty tariffs of 24 percent on Japanese imports — currently paused — into the United States.The White House has accused Japan of imposing a 700-percent tariff on US rice imports, a claim that Japan’s farm minister called “incomprehensible”.But it’s not just rice; cabbage prices have also exploded, including by 111.6 percent in March compared to the same month last year.Last year’s record summer heat and heavy rain ruined crops, driving up the cost of the leafy green in what media have dubbed a “cabbage shock”.The rising prices have increased pressure on the government of Prime Minister Shigeru Ishiba to do more to help consumers.

President Donald Trump said Thursday that the United States was in talks with China on tariffs, adding that he was confident the world’s largest economies could make a deal to end a bitter trade war.”Yeah, we’re talking to China,” Trump told reporters in the Oval Office. “I would say they have reached out a number of times.”Trump confirmed that the talks had happened since he upped tariffs on China to a whopping 145 percent, after Beijing retaliated to his sweeping “Liberation Day” worldwide levies.But Trump was cagey when asked if he had spoken directly with Chinese President Xi Jinping, despite having dropped several hints in the past that he has.”I’ve never said whether or not they’ve happened,” he said when asked about talks with Xi. “It’s just not appropriate.”Pressed by reporters whether Xi had reached out to him, Trump replied: “You’d think it was pretty obvious that he has, but we will talk about that soon.”Trump’s administration is locked in a war of sky-high reciprocal tariffs with superpower rival China that has unnerved world markets.”I think we’re going to make a very good deal with China,” he said at the White House earlier as Italian Prime Minister Giorgia Meloni visited for talks aimed at ending US tariffs on the European Union.

Stock markets wavered Thursday despite another interest rate cut by the European Central Bank as investors remain on edge over the fallout from President Donald Trump’s tariffs blitz.In New York, the Dow and the tech-heavy Nasdaq extended losses while the broad-based S&P 500 edged up.Wall Street had slumped on Wednesday as Federal Reserve chief Jerome Powell warned that Trump’s sweeping tariffs were “highly likely to generate at least a temporary rise in inflation.”He said it could put the US central bank in the unenviable position of having to choose between tackling inflation and unemployment.Trump hit back Thursday, slamming Powell for not lowering interest rates as the ECB has done and saying his “termination cannot come fast enough.””All-in-all, the trade news and Powell’s comments provided a tough backdrop for markets,” said a Deutsche Bank analyst note.The Paris and Frankfurt stock exchanges closed in the red ahead of the Easter holiday as the ECB warned that rising trade tensions could weigh on eurozone growth.While Trump’s tariffs have increased the risk that growth could slow in the eurozone, ECB President Christine Lagarde said their impact on inflation was “less than clear.”The ECB decided to lower interest rates by a quarter point to 2.25 percent, the sixth consecutive time it has moved to ease borrowing costs.Trump imposed 10 percent tariffs on all imports this month, although he suspended higher duties on dozens of nations for 90 days. He has also placed 25 percent levies on imported steel, aluminium and cars.Shares in French luxury giant Hermes fell more than three percent after the Birkin handbag maker said it would raise prices at its US stores to offset the tariff impact.Elsewhere, the London stock exchange finished flat.- ‘Big Progress!’ -Investors found solace in Trump declaring “Big Progress!” in tariff negotiations with Japan, with Tokyo leading Asian stocks higher.Tokyo’s envoy Ryosei Akazawa said: “I understand that the US wants to make a deal within the 90 days. For our part, we want to do it as soon as possible.”With Japanese companies the biggest investors into the United States, Tokyo’s negotiations are of particular interest to markets.While Japan’s Prime Minister Shigeru Ishiba warned that the talks “won’t be easy”, he said the president had “expressed his desire to give the negotiations… the highest priority.”Elsewhere, safe-haven investment gold hit a fresh record above $3,357.78 an ounce before paring back gains, while the dollar and oil prices firmed.Hopes that Trump’s blistering tariffs could be pared back have helped temper some of the disquiet on markets after a rout at the start of the month fuelled by talk of a global recession and an upending of historic trading norms.”But don’t get carried away — the market remains jittery,” said Fawad Razaqzada, market analyst at City Index and Forex.com.- Key figures at 2030 GMT -New York – Dow: DOWN 1.3 percent at 39,142.23 points (close)New York – S&P 500: UP 0.1 percent at 5,282.70 (close)New York – Nasdaq: DOWN 0.1 percent at 16,286.45 (close)London – FTSE 100: FLAT at 8,275.66 (close)Paris – CAC 40: DOWN 0.6 percent at 7,285.86 (close)Frankfurt – DAX: DOWN 0.5 percent at 21,205.86 (close)Tokyo – Nikkei 225: UP 1.4 percent at 34,377.60 (close)Hong Kong – Hang Seng Index: UP 1.6 percent at 21,395.14 (close)Shanghai – Composite: UP 0.1 percent at 3,280.34 (close)Euro/dollar: DOWN at $1.1370 from $1.1395 on WednesdayPound/dollar: UP $1.3268 at $1.3235Dollar/yen: UP at 142.39 yen from 142.12 yen Euro/pound: DOWN at 85.67 pence from 86.06 penceBrent North Sea Crude: UP 3.2 percent at $67.96 per barrelWest Texas Intermediate: UP 3.5 percent at $64.68 per barreldan-bcp-lth-bys/tgb

Chinese President Xi Jinping met the Cambodian premier in Phnom Penh on Thursday on the final leg of a Southeast Asia tour in which he sought to strengthen regional trade ties.Xi arrived in the Cambodian capital after visiting Vietnam and Malaysia, as Beijing seeks to build ties and offset the impact of huge tariffs imposed by his US counterpart Donald Trump.Former Cambodian leader Hun Sen and his son, Prime Minister Hun Manet, shared posts on their social media accounts showing them meeting with Xi. The two countries exchanged 37 agreements on a wide range of areas, including water resources and agriculture, Hun Manet wrote on Facebook.China is Cambodia’s biggest trading partner and source of investment, and more than a third of Cambodia’s $11 billion in foreign debt is owed to Beijing, according to the International Monetary Fund.Earlier in the day, the Chinese leader was greeted by King Norodom Sihamoni during a military welcome ceremony after he touched down in Phnom Penh.Xi told the monarch their two nations “set a model for equality, mutual trust and win-win cooperation between countries of different sizes”, according to China’s state news agency Xinhua.- China plays ‘pivotal role’ -Phnom Penh is also among Beijing’s most reliable supporters in Asia. Hun Manet had described Xi’s visit as a display of “iron-clad” friendship.He said in a video posted on Wednesday that the two countries had “common interests based on the principles of respect for sovereignty, equality, and non-interference in internal affairs”. He also said China had played a “pivotal role” in Cambodia’s socio-economic development.China and Cambodia celebrate 67 years of diplomatic relations this year and the kingdom also commemorated on Thursday 50 years since Phnom Penh fell to the Khmer Rouge.Trump imposed tariffs of 49 percent on Cambodia, among the highest of the levies handed out in his April 2 “Liberation Day” trade announcements. He then paused the levies for most countries for 90 days, reverting to a base tariff of 10 percent.While meeting Hun Sen, Xi said “trade wars undermine the multilateral trading system and disrupt global economic order”.”Unilateralism and hegemonism receive no support of the people,” Xi said, as quoted by Xinhua.China is excluded from the 90-day pause and faces new US levies of up to 145 percent on many of its products.Beijing has called the taxes a “joke” and imposed retaliatory tariffs of 125 percent on US goods.Xi said Thursday China will “open its mega-market to Cambodia, import more high-quality Cambodian agricultural products”, quoted by Xinhua.Hun Manet wrote a letter to Washington “expressing Cambodia’s good faith to negotiate a mutual solution” and pledging to reduce its own tariffs on 19 categories of US goods, according to the commerce ministry.

Nvidia CEO Jensen Huang held talks with Chinese leaders in Beijing on Thursday, state media said, days after the United States curbed sales of its H20 artificial intelligence chips to China.Nvidia this week said it expected a $5.5 billion earnings hit this quarter due to a new US licensing requirement on GPUs (graphics processing units) with bandwidths similar to the H20, the primary chip it could legally sell in China.Shares in the company edged lower on Thursday morning after slumping around seven percent on Wednesday.In Beijing, Huang met with Vice Premier He Lifeng, telling him that he “looked favourably upon the potential of the Chinese economy”, according to state news agency Xinhua.Huang said he was “willing to continue to plough deeply into the Chinese market and play a positive role in promoting US-China trade cooperation”, Xinhua said.The report cited He as saying that the national economy “has always been fertile soil for foreign enterprises to conduct investment and trade”.”We welcome more US enterprises like Nvidia to dig deeply into the Chinese market and display their industrial advantages and capacities, and thereby win the initiative in global competition,” He reportedly said.Huang also met Ren Hongbin, head of the China Council for the Promotion of International Trade, telling him that “China is a very important market for Nvidia”, according to state broadcaster CCTV.Nvidia, a key provider of chips used in AI, is trying to maintain sales in China as US President Donald Trump wages a trade war with Beijing.Huang on Thursday expressed hope for “continued cooperation” with China, state media said.Since Trump took office in January, Washington has imposed new tariffs of up to 145 percent on Chinese imports.Beijing retaliated with 125 percent levies on US goods.Under Joe Biden, Trump’s predecessor, Washington had already restricted exports to China of Nvidia’s most sophisticated GPUs, tailored for powering top-end AI models.Huang has said publicly that Nvidia will balance legal compliance and technological advances under Trump — but has vowed that nothing will stop the global advance of AI.”We’ll continue to do that and we’ll be able to do that just fine,” the Taiwan-born entrepreneur told reporters last year.Nvidia generated $17 billion in China in 2024, 13 percent of its total sales.

As President Donald Trump’s tariffs threaten the US economy, questions are being asked about how long the dollar can maintain its status as the world’s key trading and reserve currency. AFP examines the greenback’s current situation and outook:- Is the dollar still all-powerful? -The dollar, whose strength is based on the economic and political power of the United States, is traditionally considered a preferred safe haven in times of crisis or conflict.Almost 58 percent of foreign exchange reserves together held by the world’s central banks were denominated in dollars as of the final quarter last year, according to the International Monetary Fund.That compares with 71 percent in 1999, with the drop attributed to rising competition from smaller currencies.Roughly half of all global transactions by value are currently in dollars, compared with around 22 percent for the euro, seven percent for the pound sterling, and four percent for the Chinese yuan, according February data from international payments facilitator Swift. Many strategic commodities, such as oil, are quoted in the greenback, reinforcing its central role across global trade.However, the recent decline in the dollar’s value suggests its safe haven status “has at least temporarily disappeared” in favour of the Swiss franc, yen and gold, Ryan Chahrour, a professor of economics at Cornell University, told AFP.- ‘Exorbitant privilege’? -Before the dollar took charge, sterling dominated international trade, driven by the UK’s status as an industrial powerhouse beginning in the 19th century.However, following the Second World War, a ruined Europe desperately needed liquidity, while the United States found itself in a position of strength. The dollar emerged as the new reference currency under the Bretton Woods accords of 1944, which laid the foundations for the current international monetary system. Many countries have since chosen to peg their currency to the US unit, while demand for dollars has allowed the world’s biggest economy to borrow freely, theoretically without limits, with its debt largely owed to foreign investors.Former French finance minister Valery Giscard d’Estaing described this economic advantage enjoyed by the United States as an “exorbitant privilege”, ahead of becoming French president in the 1970s.On the other hand, the relative strength of the greenback despite recent turmoil makes American exports more expensive.To counter this, Trump advisor Stephen Miran is considering major global reform aimed at devaluing the US currency. At the same time, several central banks have begun a process of “de-dollarising” their reserves. By using the dollar extensively, countries and companies expose themselves to US sanctions — as illustrated by the freezing of Russia’s foreign exchange reserves abroad following its invasion of Ukraine in early 2022.- Why is Trump shaking the dollar? -The dollar initially gained on news of Trump’s tariffs owing to concerns the levies will push up inflation.However, that has given way to rising fears that global growth will be impacted, causing recent heavy falls for oil prices that in turn have reduced inflationary pressures.Expectations that the US Federal Reserve could cut interest rates to prop up the economy are also weighing on the dollar.Another fear is that the Fed is no longer fulfilling its role as lender of last resort, as it limits the availability of dollars to other central banks.Trump is contributing to “undermining the foundations of dollar dominance”, tarnishing the reputation of the United States, believes Mark Sobel, a former senior US Treasury official. He argues that in addition to weakening the country’s economic strength through his trade policy, Trump is challenging the rule of law.”The United States is not acting like a reliable partner or trusted ally,” he told AFP.- What alternatives? -Sobel said it is “premature to say dollar dominance is going away or the dollar has lost its kind of global status because there aren’t alternatives”.Stefan Lewellen, assistant professor of finance at Pennsylvania State University, said it is not yet time to write the currency’s “obituary”.Looking at why the euro is not ready to take the helm, he added that the European single currency is “fundamentally still governed by individual nations that have mixed incentives to cooperate”. Among other units, he said the Canadian and Australian dollars, as well as the Swiss franc, are limited by the modest size of their markets. As for the yuan, it remains under Beijing’s strict control, owing to the lack of free convertibility and restrictions on capital movements.

European stock markets dropped Thursday following Asian gains as investors awaited an expected interest rate cut by the European Central Bank while US President Donald Trump blasted the head of the Federal Reserve.Safe-haven investment gold hit a fresh record above $3,357.78 an ounce, while the dollar and oil prices firmed.Fed chairman Jerome Powell warned on Wednesday that Trump’s sweeping tariffs on virtually every trade partner could put the US central bank in the unenviable position of having to choose between tackling inflation and unemployment.His comments led to sharp losses Wednesday on Wall Street, as did chip giant Nvidia flagging hefty costs it faced owing to the US-China trade war.”All-in-all, the trade news and Powell’s comments provided a tough backdrop for market,” said a Deutsche Bank analyst note.Trump hit back Thursday, slamming Powell for not lowering interest rates like the ECB has done and saying his “termination cannot come fast enough”.Eyes were on the ECB which is expected to cut interest rates again, with Trump’s stop-start tariff announcements sowing concern in the eurozone.Tokyo led Asian stocks higher as optimism over Japan-US trade talks offset Federal Reserve boss Jerome Powell’s warning that Trump’s tariffs could force officials to choose between fighting inflation or unemployment.Investors are keeping a nervous eye on Washington as governments scramble to cut deals to avert crippling tariffs the US president unveiled on his April 2 “Liberation Day” but then delayed for 90 days.”Tariffs continue to make the headlines, with Donald Trump claiming that ‘big progress’ had been made in talks with Japanese negotiators, aimed at lowering the hefty tariffs that the US will otherwise impose in under three months,” noted Steve Clayton, head of equity funds at Hargreaves Lansdown. With Japanese companies the biggest investors into the United States, Tokyo’s negotiations are of particular interest to markets — with some describing it as the canary in the coal mine — and traders took heart from early signs.Trump posted on social media that there had been “Big Progress!”Tokyo’s envoy Ryosei Akazawa said: “I understand that the US wants to make a deal within the 90 days. For our part, we want to do it as soon as possible.”While Japan’s Prime Minister Shigeru Ishiba warned that the talks “won’t be easy”, he said the president had “expressed his desire to give the negotiations… the highest priority”.Hopes that Trump’s blistering tariffs can be pared back have helped temper some of the disquiet on markets after a rout at the start of the month fuelled by talk of a global recession and an upending of historic trading norms.- Key figures at 1130 GMT -London – FTSE 100: DOWN 0.7 percent at 8,218.19 pointsParis – CAC 40: DOWN 0.8 percent at 7,268.90Frankfurt – DAX: DOWN 0.6 percent at 21,178.14Tokyo – Nikkei 225: UP 1.4 percent at 34,377.60 (close)Hong Kong – Hang Seng Index: UP 1.6 percent at 21,395.14 (close)Shanghai – Composite: UP 0.1 percent at 3,280.34 (close)New York – Dow: DOWN 1.7 percent at 39,669.39 (close)Euro/dollar: DOWN at $1.1368 from $1.1395 on WednesdayPound/dollar: DOWN $1.3234 at $1.3235Dollar/yen: UP at 142.50 yen from 142.12 yen Euro/pound: DOWN at 85.91 pence from 86.06 penceBrent North Sea Crude: UP 1.0 percent at $66.51 per barrelWest Texas Intermediate: UP 1.2 percent at $62.55 per barrel

Tokyo led Asian stocks higher on Thursday as optimism over Japan-US trade talks offset Federal Reserve boss Jerome Powell’s warning that Donald Trump’s tariffs could force officials to choose between fighting inflation or unemployment.Investors are keeping a nervous eye on Washington for the next three months as governments scramble to cut deals to avert crippling tariffs the US president unveiled on his April 2 “Liberation Day” but then delayed for 90 days.With Japanese companies the biggest investors into the United States, Tokyo’s negotiations are of particular interest to markets — with some describing it as the canary in the coal mine — and traders took heart from early signs.Trump posted on social media that there had been “Big Progress!” and Tokyo’s envoy Ryosei Akazawa said: “I understand that the US wants to make a deal within the 90 days. For our part, we want to do it as soon as possible.”And while Japan’s Prime Minister Shigeru Ishiba warned that the talks “won’t be easy”, he said the president had “expressed his desire to give the negotiations… the highest priority”.Hopes that Trump’s blistering tariffs can be pared back have helped temper some of the disquiet on markets after a rout at the start of the month fuelled by talk of a global recession and an upending of historic trading norms.Some have said there were rumblings that the target of his most painful measures could be open to dialogue, with Bloomberg reporting that China wants to see some measures beforehand, including reining in some cabinet members’ anti-Beijing comments.Shares in Tokyo rose more than one percent with Hong Kong, Singapore and Mumbai, while Shanghai, Sydney, Seoul, Wellington, Bangkok and Jakarta were also up. Taipei edged down along with London, Paris and Frankfurt.However, uncertainty continues to prevail on trading floors after a selloff on Wall Street — and gold hitting a fresh record above $3,357 — sparked by Powell’s warning over the impact of the tariffs.He said that, while the Fed’s employment and inflation goals were largely in balance at this point, policymakers could find themselves in the “challenging scenario” depending on how things evolve.”Tariffs are highly likely to generate at least a temporary rise in inflation,” he told the Economic Club of Chicago, adding that the inflationary effects “could also be more persistent”.He added: “You’ll probably see continued volatility.”Chris Weston at Pepperstone said: “Powell has again frustrated some, who perhaps optimistically felt he might change the messaging from his recent communique and to open the door to cuts in the June (policy) meeting, a factor that is priced at 80 percent by interest rate swaps traders.”The World Trade Organization warned on Wednesday of “severe negative consequences” for the world because of the trade war, with boss Ngozi Okonjo-Iweala saying she was “very concerned” and that China-US volumes could collapse as much as 81 percent.Oil prices extended gains after Washington on Wednesday sanctioned a second China-based “teapot” refinery for purchasing Iranian crude as it continues its “maximum pressure” campaign against Tehran. The State Department said the measures against Shandong Shengxing Chemical were part of the US president’s campaign to “drive Iran’s illicit oil exports” to zero.- Key figures at 0810 GMT -Tokyo – Nikkei 225: UP 1.4 percent at 34,377.60 (close)Hong Kong – Hang Seng Index: UP 1.6 percent at 21,395.14 (close)Shanghai – Composite: UP 0.1 percent at 3,280.34 (close)London – FTSE 100: DOWN 0.4 percent at 8,240.16 Dollar/yen: UP at 142.79 yen from 142.12 yen on WednesdayEuro/dollar: DOWN at $1.1378 from $1.1395Pound/dollar: UP at $1.3241 from $1.3235Euro/pound: DOWN at 85.92 pence from 86.06 penceWest Texas Intermediate: UP 0.9 percent at $63.03 per barrelBrent North Sea Crude: UP 0.8 percent at $66.35 per barrelNew York – Dow: DOWN 1.7 percent at 39,669.39 (close)