US–Japan Seal Trade Deal 🇺🇸🇯🇵

A U.S. appeals court has ruled that most of President Donald Trump’s sweeping global tariffs are unlawful, setting the stage for a likely Supreme Court battle. In a 7–4 decision, the Federal Circuit said Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to justify tariffs, ruling that only Congress has the constitutional power to set duties.

The court said the IEEPA “neither mentions tariffs” nor grants the president unlimited authority to impose them. It added that Congress has always explicitly used terms like “tariff” or “duty” when delegating such powers.

What does it affect? The judgment affects Trump’s “reciprocal” tariffs and baseline tariffs on countries including China, Mexico, India, Canada, and others, though steel and aluminum tariffs remain untouched under separate authority.

What next? The appeals court gave the government time till October 14 to file a petition in the Supreme Court. The Trump administration filed the petition on Wednesday.

How is the Trump administration reacting? President Donald Trump has asked the Supreme Court to fast-track his appeal. According to reports, he wants arguments heard in November with a decision soon after.

On Sept. 4, President Donald Trump formalized a tariff deal with Japan, confirming that “nearly all” imports from the country will face a 15% duty. Under the order, goods currently taxed at less than 15% will have additional charges applied to reach the new rate, while products already above 15% will remain unchanged—bringing U.S. tariffs in line with the European Union’s structure.

The measure is retroactive to Aug. 7, allowing shippers to seek refunds through standard customs procedures. Tokyo will also channel $550 billion into U.S. investments, chosen by Washington to expand domestic manufacturing and create jobs.

🚗 Auto Relief: Japanese automakers and parts suppliers will pay 15% tariffs rather than the 27.5%. Rules of origin will determine what qualifies as “products of Japan,” while U.S.-made vehicles certified domestically can now be sold in Japan without additional testing.

🌾 Grain by Grain: As outlined in July, Japan agreed to boost U.S. rice imports by 75% and commit to $8 billion annually in farm goods, including soybeans and fertilizers. The deal aims to open Japanese markets wider for U.S. producers while softening the bilateral trade deficit.

President Donald Trump has announced plans to impose tariffs on semiconductor imports from companies that do not shift production to the U.S. The move, revealed ahead of a tech CEO dinner, is the latest escalation in his effort to use tariffs as leverage for domestic manufacturing. Trump indicated the tariffs would be “substantial” but offered no timeline or rate.

Major players who have already announced investment in U.S. operations—such as Apple, TSMC, Samsung, and SK Hynix—would not face the new tariffs. Apple recently committed $600 billion in U.S. investments over four years, and major Asian chipmakers have announced plans to build fabrication facilities in Arizona and Texas.

Japanese conglomerate Hitachi will invest $1 billion to expand its U.S. manufacturing capacity for power grid components, with nearly half of that going toward a massive new transformer facility in South Boston, Virginia.

The move comes as AI data centers drive unprecedented electricity demand, with usage expected to reach 12% of the U.S. power supply by 2028. The Virginia facility, set to be the country’s largest transformer producer, will begin construction this year and launch operations by 2028.

The investment is part of a broader $9 billion global push to scale manufacturing capacity and strengthen energy infrastructure. Hitachi’s expansion aims to reduce grid bottlenecks and build a resilient domestic supply chain at a time when transformer shortages persist post-COVID.

For the first time since 2010, Syria has resumed crude oil exports with a shipment of 600,000 barrels from the western port of Tartus. The milestone marks a significant moment for the war-torn country’s energy sector, which was once the backbone of its economy, contributing over 50% of state revenues before civil war erupted.

The shipment was made by the tanker Nessus Christiana for BeServ Energy as part of renewed government efforts to revive foreign trade ties and oil sector output.

The move follows a broader easing of economic sanctions, including a recent executive order by President Trump and confirmation from the U.S. Treasury that sanctions against Syria have been lifted. Oil production in Syria has plummeted from 390,000 barrels per day in 2010 to just 40,000 by 2023. However, officials say the restart of crude exports and re-exporting of refined products from Banias refinery is part of a wider plan to restore Syria’s energy footprint and attract global partners.

The U.S. trade deficit jumped 32.5% in July to $78.3 billion, driven by a sharp rise in imports of industrial supplies, capital goods, and services. Imports rose 5.9% to $358.8 billion, fueled by a $12.5 billion spike in industrial materials, particularly nonmonetary gold, and a record $96.2 billion in capital goods. Meanwhile, exports inched up just 0.3% to $280.5 billion, with gains in computer accessories and aircraft offset by declines in excavating machinery and metal products.

According to the Commerce Department's Bureau of Economic Analysis, the goods trade deficit with China alone rose by $5.3 billion to $14.7 billion. Services exports hit a record $101 billion, though travel services slipped amid stricter immigration policies. Economists warn that if this import-heavy trend continues, trade could drag on third-quarter GDP.

The U.S. government has revoked Taiwan Semiconductor Manufacturing Company’s (TSMC) authorization to ship advanced technology from the U.S to its Chinese facilities, escalating its crackdown on tech exports to China. The move, which also affects South Korea’s Samsung and SK Hynix, is part of Washington’s broader effort to prevent China from accessing leading-edge semiconductor tech.

TSMC confirmed to BBC that the license will be withdrawn by the end of 2025 and said it is in talks with the U.S. government. The block could hinder TSMC's manufacturing operations in China, where it primarily produces old-generation devices.

U.S. manufacturing activity contracted again in August, marking the sixth consecutive monthly decline, according to the Institute for Supply Management (ISM). The manufacturing PMI came in at 48.7, a slight uptick from July’s 48 but still below the 50 mark that signals growth. Notably, factory output fell back into contraction at 47.8, reversing gains seen in recent months.

Despite the slump in production, there were signs of resilience: new orders rose for the first time since early 2025, with ISM’s new bookings index jumping 4.3 points to 51.4—its highest gain in over a year. However, employment remained weak, and order backlogs continued to shrink. Meanwhile, prices paid for raw materials eased to 63.7, the lowest since February, hinting at some stabilization.

ISM’s data also showed longer delivery times and faster declines in imports. Of the 18 manufacturing sectors tracked, 10 contracted—including paper, plastics, and transport—while seven expanded.

U.S. cotton exports to China plunged nearly 90% in the first half of 2025, even as shipments to other Asian markets climbed, underscoring a production shift driven by American tariffs.

Data from LSEG shows that while exports to China collapsed in the six months through June, volumes to countries like Pakistan and Turkey increased, with shipments to Vietnam nearly tripling as apparel manufacturing moved further south.

Brazil, which overtook the U.S. as China’s top cotton supplier in 2024, is expected to maintain its lead this year, according to International Trade Centre data. The U.S. exported 11.9 million bales of cotton in the year through July, a 1% increase, as falling shipments to China were offset by gains in other markets, according to the Agriculture Department. Exports are projected to rise slightly to 12 million bales this fiscal year.

Ocean freight costs, which surged earlier this year amid tariff-fueled demand, are now starting to retreat. The average spot rate to ship a 40-foot container from Asia to the U.S. West Coast fell to $5,840 this week, down from about $6,000 the prior week, according to Freightos. The Shanghai Containerized Freight Index also slipped 6.8%, with rates from Shanghai to the U.S. West Coast plunging nearly 27%.

The drop follows a rush of imports triggered by Washington’s decision to temporarily cut tariffs on Chinese goods from 145% to 30% for 90 days.

Retailers and manufacturers welcome the relief, having faced steep costs from both tariffs and shipping. The National Retail Federation projects July imports to hit 2.13 million containers, peaking earlier than usual, before volumes fall through the rest of the year. Analysts say the sharp front-loading of orders means importers are turning cautious, wary of weak consumer demand later in 2025.

Chinese e-commerce and logistics firms are ramping up warehouse acquisitions in Europe as U.S. tariffs disrupt global supply chains, according to Bloomberg. The report states that, in the UK alone, they have leased over 2 million square feet of space this year, on pace to surpass the pandemic-era peak of 2021.

JD.com has taken 900,000 square feet across multiple sites as it pushes its Joybuy platform in Britain. Other players like Zong Teng’s Super Smart Service, Top Cloud Logistics, and Daals are also securing facilities, while Shein has built hubs in Poland’s Wroclaw region. Developers like GLP and CTP confirm rising Chinese demand, with Asian tenants doubling their share of leases over the past 18 months.

Analysts say Europe is now the last major growth market open to Chinese firms, with Brexit-era trade terms making the UK relatively attractive. The expansion reflects both geopolitical pressures—such as Trump’s tariff regime and shipping chokepoint risks—and a strategic push to capture European consumer demand.

Global air cargo demand rose 5.5% year-on-year in July 2025, according to IATA, with international operations expanding 6%. The increase came alongside a 3.9% rise in available cargo capacity, supported by lower jet fuel prices and a 3.1% uptick in global goods trade.

Asia-Pacific carriers led growth with an 11.1% surge, while Africa posted a 9.4% gain. Europe and the Middle East recorded moderate rises, and North America lagged at just 0.7% as U.S. policy shifts hit Asia–U.S. trade flows.

The Europe–Asia corridor stood out with 13.5% growth, marking 29 consecutive months of expansion. By contrast, Asia–North America demand fell 1% year-on-year amid weaker e-commerce volumes, following the end of U.S. de minimis exemptions for small shipments.