The start and end of a day could not have been more different. Friday started off with the news of President Trump taking away the tariff exemption enjoyed by small-value packages of imports from China and Hong Kong. The small value threshold was $800. The removal of the so-called “de minimis” exemption meant that popular retailers such as Shien and Temu will be forced to raise prices as all imports will now attract a stiff tariff rate. Overnight, the trend of big US companies announcing hits on their quarterly and annual profits, thanks to tariffs, continued as Amazon and Apple disappointed their shareholders. The FT reported that Apple chief executive Tim Cook told analysts on Thursday evening that “assuming the current global tariff rates . . . do not change for the balance of the quarter, and no new tariffs are added, we estimate the impact to add $900mn to our costs”. E-commerce giant Amazon, too, warned that it is likely to take a hit as a result of tariffs. Analysts believe almost 70% of all the goods sold on Amazon in the US are sourced from China. However, the day's fortune was decided by two crucial developments. First, the Bureau of Labor Statistics reported that non-farm payrolls (jobs) increased by 177,000 in April. This number was not only much better than what the markets expected but also the first instance of hard data for the period after the announcement of Trump’s reciprocal tariffs that suggests that the economy is holding up better than what all the soft data and opinions suggested. The FT reported that the gains were broad-based, but the details matter because they tell the story of how the US economy is changing. “Transportation and warehousing employment rose by the most since December, suggesting a surge in imports and activity boosted demand for labor as businesses rushed to get ahead of tariffs. Manufacturing, meanwhile, shed jobs as the sector saw the steepest contraction in output last month since 2020,” reported the FT. Second, and the factor that pulled up the market sentiment the most, was the news that, as Reuters reported, Beijing is "evaluating" an offer from Washington to hold talks over US President Donald Trump's crippling tariffs. ChinaDaily reported the Chinese spokesperson as follows: ”China is currently assessing the situation, but our position has always been clear," the spokesperson said. "If it's a fight, we'll fight to the end. If it's a talk, the door is wide open”. Investors have been so stressed about the calamitous effects of a prolonged trade war that the mere news of China considering talks with the US lifted sentiments. All benchmark indices ended up well in the green. The S&P 500 notched up the ninth straight day of gains — a feat so rare the one would have to go back 20 years — 2004 — to find the last instance of such a streak.
