CHINESE EXPORTS FALL FOR THE FIRST TIME SINCE THE START OF THE TRADE WAR (07.11.2025)
In October 2025, Chinese exports in dollar terms fell by 1.1% year-on-year, the first contraction since April, contrasting with the 8.3% increase in September. This decline is attributed to the exhaustion of the artificial momentum generated during the summer, when many companies brought forward their shipments to avoid tariffs imposed by the United States, and to the appreciation of the yuan, which made Chinese exports more expensive in international markets. In addition, Chinese foreign trade is being affected by the trade war with the US, which has led to a steady decline in sales to that country, particularly in October, when they fell by 25.2%.
By region, while exports to the US have fallen, those to the European Union and ASEAN have barely grown or have shown a notable slowdown in October. This slowdown is also evident in Africa and Latin America, where sales growth has declined compared to previous months, contributed to by factors such as the tightening of controls and tariffs in Mexico in line with US policy.
Despite these challenges, foreign trade remains a key pillar of the Chinese economy, which faces an uneven recovery marked by the property crisis and weaker consumption. Imports rose slightly by 1%, although they are below expectations. The trade surplus fell by 5.69% year-on-year to $90 billion in October.
The recent meeting between Donald Trump and Xi Jinping resulted in a one-year trade truce that includes a partial reduction and temporary suspension of some tariffs, seeking to ease tensions and stabilise bilateral trade. Rare earth exports rebounded by 75% between September and October, reflecting this new dynamic.
SEMICONDUCTOR CRISIS THREATENS HONDA’S PRODUCTION IN MEXICO (09.11.2025)
Honda, Japan’s second-largest car manufacturer, has reduced its production in Mexico due to an “interruption in the supply chain of critical semiconductors” , which has caused disruptions and adjustments at its plant in Celaya, Guanajuato. These reductions and temporary suspensions began at the end of October and will continue throughout November. The crisis is mainly due to the geopolitical dispute involving its supplier Nexperia, a company based in the Netherlands but with Chinese capital, which was taken under control by the Dutch government. In retaliation, China blocked exports of essential chips, creating a shortage that has affected the global automotive industry, including Honda.
The Celaya plant is key to the production of the HR-V SUV, with a capacity of 200,000 units per year. Honda is confident that production will gradually return to normal and assures that its partners will continue to work at the facility. The semiconductor crisis is exacerbating the situation in the Mexican automotive industry, already affected by a “tariff wall” imposed by the United States, with 25% tariffs on light vehicles since April 2025 and new taxes on heavy trucks and buses since November. This policy has impacted production and exports; in October, light vehicle manufacturing fell by 3.7% annually, and exports fell by 5.4%. Honda, in particular, recorded a 13.3% drop in production and a 13% drop in exports in the first ten months of the year.
Although Mexican automakers are currently absorbing the tariff costs without passing them on to consumers, the president of AMIA warns that this cannot be sustained and that the sector is in the process of reorganising production ahead of the next review of the TMEC in 2026, which will address sensitive issues such as content of origin and the rapid response labour mechanism. Despite the difficulties, the Mexican automotive sector remains a key pillar of exports, with more than 80% of production destined for foreign markets and a heavy dependence on the US market.
US AND CHINA AGREE TO ONE-YEAR TARIFF TRUCE AND 10% REDUCTION IN AVERAGE TAXES (11.11.2025)
A new truce in the trade war between the United States and China, agreed between Trump and Xi in Busan, freezes tariff escalation for one year and reduces the average effective rate applied to Chinese imports by about 10 points. Washington lowers and sets two key surcharges (the “Liberation Day” tariff and the IEEPA surcharge on fentanyl) at 10%, easing pressure on many industrial and consumer goods, although other central elements of the tariff architecture remain in place, such as the Section 301 lists and surcharges on steel, aluminium, automotive and critical technologies.
The Trump administration presents the pact as a “historic” agreement that does not remove pressure on Beijing, but does temporarily stabilise the relationship and opens up a year of leeway to negotiate further adjustments related to synthetic opioids, subsidies and forced technology transfers.
China, for its part, is withdrawing certain retaliatory tariffs on US agricultural products, facilitating general licences to export rare earths and other strategic materials to US end users, and committing to strengthening controls on fentanyl precursor chemicals, cooperating with US authorities on traceability. From the perspective of global trade governance, the truce reduces the immediate risk of a sudden fragmentation of the multilateral system and brings some certainty to supply chains in sectors such as electronics, automotive, renewables and consumer durables, while at the same time reinforcing the logic of bilateral negotiation and preferential agreements outside the WTO framework.
US TARIFF UPDATE: CONSOLIDATION OF THE ‘OFFENSIVE 2.0’ AND ADJUSTMENTS FOLLOWING AGREEMENTS WITH CHINA AND THE EU (15.11.2025)
The US tariff framework is taking shape as an “architecture 2.0” based on selective surcharges and bilateral agreements, which strengthen its negotiating power and reorient trade and investment in its favour. With regard to China, the technical adjustments to apply the 10-point reduction in the tariff linked to fentanyl and the new exemptions derived from the Busan agreement are detailed, through specific subheadings in the tariff that allow goods to be declared exempt if they meet very precise criteria. All of this is integrated into a complex table of rates that combines measures under the IEEPA, Section 232 tariffs (steel and aluminium) and Section 301 tariffs (industrial and technological goods), so that, despite the truce, the average effective rate on Chinese imports remains much higher than that applied to other partners.
In the case of the European Union, the July agreement sets a general tariff of 15% on its exports to the US, while US goods enjoy almost tariff-free access to the European market, consolidating a clear asymmetry and reinforcing the role of the US as a key energy supplier, particularly of fossil fuels. From a compliance perspective, the proliferation of rates, conditional exemptions and revisable timetables forces companies exposed to the US to invest in regulatory monitoring and scenario planning. The environment is defined less by sudden changes and more by gradual adjustments linked to political milestones and bilateral negotiations, making anticipation and contractual flexibility central elements of competitive advantage.
https://www.china-briefing.com/news/us-china-tariff-rates-2025/
HOW TRUMP’S GLOBAL TARIFFS ARE RESHAPING INTERNATIONAL TRADE (19.11.2025)
The high tariffs imposed by President Trump in August led to a contraction in imports and the trade deficit. US imports of goods and services fell by 5.1% in August to $340.4 billion, following the entry into force of new tariffs on products from some 90 countries. This decline reflects the fact that American companies reduced their purchases of foreign machinery, industrial supplies and other products after having accumulated inventories to avoid the new taxes.
US exports also fell by £500 million due to lower global demand for consumer goods, cars and gold, although there was an increase in exports of services such as travel. All this resulted in an almost 24% reduction in the trade deficit in goods and services, which stood at £59.6 billion.
The data show that this decline in the deficit is largely a consequence of a previous artificial increase in imports in anticipation of tariffs, with peaks before 7 August, when rates of 15% for several countries and 50% for Brazil came into effect, thus raising the effective tariff rate to its highest level since 1934.
Although the decline would appear to meet Trump’s goal of reducing the trade deficit, many economists agree that this effect is temporary and that the real economic impact will depend on the stability and duration of the tariff regime, especially as companies are beginning to pass on costs to consumers in the form of higher prices, impacting Trump’s political popularity.
The White House has initiated a review of these tariffs and recently approved exemptions aimed at making certain foods cheaper, with the aim of easing the pressure of the cost of living, a decisive factor in previous elections where Democrats gained support.
In addition, the Supreme Court is evaluating whether Trump exceeded his legal authority with these tariffs and could overturn or reduce the levies.
https://www.nytimes.com/es/2025/11/19/espanol/estados-unidos/trump-aranceles-comercio-deficit.html
LATIN AMERICA MUST DIVERSIFY ITS TRADE RELATIONS IN THE FACE OF US TARIFFS (19.11.2025)
The Economic Commission for Latin America and the Caribbean (ECLAC) warns that the United States’ new protectionist tariff policy places Latin America and the Caribbean in an ambivalent situation. On the one hand, there are clear risks to its medium-term development; on the other, opportunities are opening up if the region acts strategically. Since February 2025, Washington has increased tariffs and reconfigured international trade, but the report highlights that Latin American countries continue to face relatively lower rates than some of their main global competitors. This allows them, at least for the time being, to maintain or even strengthen their exports to the US market, especially in sectors such as agribusiness, the clothing industry and the production of medical devices.
However, the Commission stresses that this advantage is fragile and not guaranteed over time. Tariffs could be tightened again if trade balances change, if different political or geostrategic priorities come into play, or if the United States opts for an even more aggressive stance on protectionism. This uncertainty is already having concrete effects, such as a decline in foreign direct investment in the sectors most exposed to the US market, because investors are hesitant to commit capital to activities that depend almost exclusively on that destination.
Given this scenario, ECLAC argues that the region cannot limit itself to reacting passively to Washington’s actions. It proposes taking advantage of the situation to diversify trading partners towards China, the European Union and other regions, and to advance deeper regional integration that strengthens internal value chains and reduces vulnerability to external shocks. At the same time, it insists on the need to transform the productive structure in order to “export better”, i.e. to increase technological content, human capital development and innovation, and not remain anchored in low value-added products.
Overall, the report concludes that the wave of US protectionism could become an opportunity to build a more resilient and autonomous international integration, provided that Latin American countries act with a long-term vision and clear and stable policies; otherwise, volatility and excessive dependence on the United States could undermine their growth potential.
https://news.un.org/es/story/2025/11/1540773
TRUMP APPROVES TARIFF REDUCTIONS FOR BRAZIL TO LOWER THE PRICE OF MEAT AND OTHER FRESH PRODUCTS (21.11.2025)
On 20 November 2025, the US president signed an executive order eliminating the additional 40% tariffs imposed on a wide range of products imported from Brazil, including beef, tropical fruits (bananas, pineapples, coconuts), coffee and vegetables such as tomatoes. This measure is retroactive to 13 November and seeks to alleviate the increase in the prices of these products in the United States, a reaction also linked to the impact that the high cost of living is having on his political agenda.
The 50% tariffs imposed in July 2025, which amounted to a 40% surcharge on the 10% base, were initially linked to legal proceedings against former Brazilian President Jair Bolsonaro, accused of organising a coup d’état, which the US government considered a threat to national security and the country’s economy. Subsequently, after several conversations and meetings with current Brazilian President Luiz Inácio Lula da Silva, including a personal meeting in Malaysia, Trump decided to partially reverse these measures.
The Brazilian government welcomed the decision “with satisfaction” and stressed that negotiations with the United States will continue to eliminate the remaining additional tariffs and advance the bilateral trade agenda.
This easing is part of a broader review of Trump’s trade policy, which includes tariff reductions on food products from other trading partners such as Argentina, El Salvador, Ecuador and Guatemala. The decision represents a significant relief for Brazil, one of the world’s largest food producers, and is a direct endorsement of Lula’s administration in a context of previous diplomatic tension.
WHO URGES URGENT TRADE REFORM AT CLOSE OF G20 SUMMIT (23.11.2025)
The Director-General of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala , highlighted during the G20 summit in Johannesburg the urgent need for a thorough reform of the multilateral trading system. Despite recent global trade disruptions, she recalled that 72% of world trade continues to be governed by WTO rules, which bring stability, predictability and certainty to the international economy. Okonjo-Iweala stressed that the current crisis represents an opportunity to identify which aspects of the system are working and which need to be changed, urging members not to miss this window of opportunity to push for the modernisation of the regulatory framework.
G20 leaders, she added, showed unanimous support for the multilateral system and WTO reforms. Although she regretted the absence of the United States at the summit, she highlighted South Africa’s efforts to maintain cohesion in the forum. The Director-General said that geopolitical tensions and the increase in unilateral tariffs pose a threat to global trade, while highlighting the fundamental role of regional initiatives such as the African Continental Free Trade Area (AfCFTA) in strengthening economic resilience.
The G20’s final statement promoted open and balanced trade, called for the reduction of tariff barriers, and emphasised the importance of promoting international cooperation to overcome challenges such as industrial overcapacity and unfair competition. It warned that responding to these challenges by imposing unilateral tariffs would only lead to collective defeat.
Finally, Okonjo-Iweala pointed out that reforms to the multilateral trading system must translate into concrete actions that promote inclusive economic growth, with more effective dispute settlement mechanisms and the incorporation of new issues such as digital trade, sustainability, and equity in the global supply chain.
https://g20.org/track-news/wto-chief-urges-urgent-trade-reform-as-g20-summit-wraps-up/
CHINA BACKTRACKS AFTER TIGHTENING EXPORT CONTROLS ON RARE EARTHS AND KEY TECHNOLOGY (24.11.2025)
In response to US tariffs, and citing national security reasons, China introduced two waves of export controls on rare earth elements in April and October 2025. The second wave, which extended the licensing regime to five additional elements, extraction and separation equipment, and technical expertise for the manufacture of high-performance magnets, includes for the first time extraterritorial enforcement provisions requiring foreign companies to obtain Chinese licences to export products containing Chinese inputs or manufactured with Chinese technologies.
However, coinciding with the tariff truce with the United States and in response to the reaction of its partners, Beijing has suspended much of this second phase of restrictions until 10 November 2026, although it maintains the licensing framework and the ability to reactivate it.
This episode confirms the strategic nature of rare earth value chains in sectors such as electric vehicles, wind power, medical devices and military systems, where China dominates processing and refining. The European Union has been particularly affected by these measures, given the indispensable nature of rare earths for its digital, green and defence industries, highlighting significant vulnerabilities in its supply chains that are difficult to mitigate.
The EU and the G7 are considering defensive responses and diversification strategies (new mines, processing, recycling and agreements with third countries), but admit that, in the short term, it will be necessary to manage risk through dialogue, preventive stockpiling and a gradual redesign of critical supply chains.
https://www.europarl.europa.eu/thinktank/en/document/EPRS_ATA (2025) 779220
WORLD TRADE HAS A NEW PROBLEM: THERE ARE NO SHIPS AND TRANSPORT PRICES HAVE SKYROCKETED 200% FROM FEBRUARY LOWS (24.11.2025)
World trade is facing new tensions; there is a shortage of available ships and shipping prices for raw materials have soared by more than 200% since February lows, according to the Baltic Dry Index. This rise is not so much due to a general boom in global demand as to a reconfiguration of routes due to the trade war and political decisions. On the one hand, demand for iron and wheat from South America has increased, and on the other, China is hoarding huge quantities of raw materials, especially iron ore and cereals, buying more and more from Brazil and, in the future, from Guinea (Simandou mine), which means longer routes and ships spending more time at sea, thus raising the cost per tonne-mile.
In addition, China has introduced a new port tariff that penalises US-owned ships, which may take some of the tonnage out of the market or cause shipowners to slow down while they decide how to react, artificially restricting the supply of ships. This has led to large shipping companies reporting higher order volumes, but in a context of high costs and squeezed revenues.
At the same time, there is a “double reality”: while freight rates for raw materials are rising sharply, the index for containers of manufactured goods leaving China (Shanghai Freight Index) is falling, reflecting weak demand for industrial and consumer goods.
Experts believe that much of this tension is temporary and linked to trade tensions between the United States and China, and point out that, in the case of cereals, the agreement for China to resume importing large volumes from the US could ease the pressure on transport, although for the moment the high costs have already led some companies, such as US LNG companies, to consider delaying shipments.
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In Madrid, 30 November 2025
International Trade and Sanctions Department
Lupicinio International Law Firm
