US tariffs’ effect on China, Trump’s push for Afghan base: SCMP daily highlights

China's exports to the U.S. declined 15.5% year-on-year in the first eight months of 2025 due to tariffs, though the impact varies significantly across Chinese provinces. Amid ongoing trade tensions, President Trump indicated a potential extension of the trade truce with China and a facilitated deal for TikTok, preceding an anticipated call with President Xi. Domestically, lawmakers have warned that these tariffs are severely affecting Asian-American businesses, threatening closures.

Analysis

The US-China economic relationship is characterized by significant stress and uncertainty, underscored by a 15.5% year-on-year decline in China's exports to the US in the first eight months of 2025. However, this headline figure masks a complex reality, as the impact of tariffs is highly uneven across Chinese provinces, with some regions experiencing export growth as high as 265%, suggesting significant supply chain shifts or resilience. This negative economic data is juxtaposed with mixed signals from the US administration; President Trump has hinted at a potential extension of the trade truce and a resolution for TikTok's US operations, creating a binary risk scenario ahead of an anticipated call with President Xi. Concurrently, escalating geopolitical tensions, evidenced by China's unveiling of the CJ-1000 hypersonic missile and US strategic interest in the Bagram Air Base, introduce a layer of non-trade-related risk that could overshadow any potential commercial de-escalation. The domestic economic fallout is also becoming more pronounced, with lawmakers highlighting that US tariffs are severely impacting Asian-American owned businesses.

Key Decisions for Investors

• Investors should adopt a cautious stance and monitor the outcome of the upcoming US-China presidential call, which serves as a critical near-term catalyst for assets sensitive to trade policy.
• Evaluate portfolio exposure to companies with concentrated supply chains in China, as the varied regional impact of tariffs suggests that some firms may be more resilient or vulnerable than headline data implies.
• Factor in the rising geopolitical tensions as a source of potential market volatility that is independent of trade negotiations, warranting a review of long-term risk management and hedging strategies.
• Given the tangible negative impact on US small businesses, watch for shifts in domestic political sentiment that could influence future tariff policies, particularly in an election context.