China Relief on Shanghai's streets and defiance online

On Thursday morning in Shanghai, as shoppers filled the luxury malls and delivery drivers whizzed through the streets, financiers breathed a cautious sigh of relief.

- Amy Hawkins

On Thursday morning in Shanghai, as shoppers filled the luxury malls and delivery drivers whizzed through the streets, financiers breathed a cautious sigh of relief. Overnight, Donald Trump had reversed course, announcing a 90-day pause on "reciprocal" tariffs of up to 50% for dozens of countries.

Though China got no reprieve – the levy on Chinese goods was increased to 145% – the temporary return of normal trade channels showed Chinese businesspeople that all was not lost. The US president's announcement of punitive tariffs on countries across south-east Asia had risked closing routes Chinese companies have been using to circumvent levies since his first term in office. Since 2017, thanks to tariffs on Chinese goods, the share of China's exports bound for the US has dropped from about 20% to less than 15%. But much of that trade has simply been re-routed through third countries, as Chinese businesses set up shop in places with cheaper labour costs and easier access to the US market.