Core Points - The WTO Services Council held its third meeting of 2025 to discuss the outcomes of the 13th Ministerial Conference and the e-commerce work plan [1] - The Chinese representative criticized the US's unilateralism and protectionism regarding "reciprocal tariffs," highlighting the misleading nature of focusing solely on goods trade while ignoring benefits from services trade [1] - China introduced its latest policies and best practices on cross-border data flow and raised concerns about the US and India's misuse of national security measures to restrict Chinese enterprises and products [1]

Core Viewpoint - The article discusses the shifting global trade dynamics due to the United States' unilateral trade policies, particularly its "reciprocal tariffs," which are criticized for promoting protectionism and negatively impacting global service trade [1][3][4]. Group 1: Impact of US Trade Policies - The US GDP experienced a quarter-on-quarter decline of 0.3% in Q1 2025, marking its first economic contraction in three years, largely attributed to the negative effects of its tariff policies [3]. - Net exports have significantly dragged down the US economy by 4.83 percentage points, highlighting the detrimental impact of the tariff measures [3]. - A study from Yale University indicates that if the US tariffs are fully implemented, consumer prices could rise by 2.3%, resulting in an additional annual expenditure of $3,800 per household [3]. Group 2: Global Reactions and Shifts - Countries like India, Brazil, Egypt, and Pakistan have shown support for China's stance against US trade practices, indicating a potential decline in US hegemony in global trade [1][4]. - Germany's Hamburg port saw a 11.3% increase in container throughput with China, while shipments to the US plummeted by 19%, reflecting a growing trade relationship with China [6]. - The UK has resumed its economic cooperation with China, signing a £3.2 billion deal, as it seeks to recover economically post-Brexit [6]. - Australia has shifted its stance, with Prime Minister Albanese stating that Australia will no longer pursue "decoupling" from China, given that nearly 40% of its exports are directed to the Chinese market [6]. Group 3: Broader Economic Context - Emerging economies now contribute over 60% of global economic growth, contrasting with the US's economic struggles, which include a national debt exceeding $45 trillion, accounting for 130% of its GDP [9]. - The Regional Comprehensive Economic Partnership (RCEP) covers 30% of the global population, further illustrating the shift in economic power dynamics away from the US [9]. - The article warns that continued reliance on tariff barriers by the US could lead to its isolation in the face of global cooperation trends [10][12].

Group 1 - The new U.S. government's unilateral and protectionist policies have violated WTO principles, causing significant disruption to global trade and raising concerns among various countries, including South Korea [1] - South Korea's President expressed concerns over potential financial crises similar to the 1997 crisis if the U.S. demands for cash investments are met without a currency swap agreement [1][3] - The proposed $350 billion investment fund by South Korea is equivalent to 20% of its GDP for 2024, highlighting the significant economic implications of the ongoing negotiations with the U.S. [3] Group 2 - South Korea's request for a bilateral currency swap agreement with the U.S. aims to mitigate the impact of foreign investments on the Korean won and enhance its international standing [2] - The historical context of the 1997 financial crisis is a major concern for South Korea, as it faced high short-term debt and limited foreign reserves at that time [3] - The ongoing U.S.-initiated tariff war is disrupting global supply chains and trade order, prompting calls for increased economic cooperation in Asia to address these challenges [3]

Group 1 - China criticized the US "reciprocal tariff" measures at the WTO, calling for all parties to jointly maintain the global service trade order [1] - During the first four days of the National Day and Mid-Autumn Festival holiday, key retail and catering enterprises in China saw sales increase by 3.3% year-on-year [1] - The Ministry of Transport raised the typhoon defense response to level two due to Typhoon "Maidum," which is expected to make landfall in Guangdong and Hainan [1] Group 2 - The Ministry of Water Resources initiated a level four emergency response for flood prevention in four provinces due to Typhoon "Maidum," predicting significant rainfall and potential flooding [1] - The National Railway Group reported that on October 3, over 18.16 million passengers were sent by rail, with expectations of continued high passenger flow [1] - In September, the A-share market completed a total of 40.616 billion yuan in refinancing, a nearly 30% increase month-on-month [1]

Core Viewpoint - The article highlights China's proactive stance in addressing the negative impacts of the United States' unilateral "reciprocal tariffs" on global service trade during the WTO Services Council meeting [1] Group 1: China's Position - China criticized the essence of the U.S. unilateralism and protectionism, emphasizing the need for the U.S. to adhere to WTO rules [1] - A position paper submitted by China outlines the shared responsibility of WTO members to strengthen and stabilize global service trade [1] Group 2: Impact on Global Trade - Service trade is identified as a crucial engine for global trade growth, providing developing countries with more opportunities to integrate into the global value chain [1] - The U.S. "reciprocal tariff" measures have caused turmoil in global trade, with negative effects spilling over into the service trade sector [1]

Core Viewpoint - The article highlights China's criticism of the United States' unilateral "reciprocal tariffs" and protectionist measures during the WTO Services Council meeting, emphasizing the negative spillover effects on global service trade and calling for adherence to WTO rules to promote healthy and stable global service trade development [1]. Group 1 - China actively set the agenda at the WTO meeting, condemning the essence of the U.S. unilateralism and protectionism, and pointing out the adverse impacts of U.S. restrictions on global service trade [1]. - The document submitted by China states that service trade is becoming a crucial engine for global trade growth, providing developing countries with more opportunities to integrate into the global value chain [1]. - The U.S. has historically been the largest service trade surplus country, yet it selectively discusses trade losses in goods while ignoring gains in services, showcasing a double standard [1]. Group 2 - Other member countries, including India, Brazil, Egypt, and Pakistan, echoed China's statements, emphasizing the importance of a multilateral trade system for global trade operations and the need for stability and predictability in regulatory policies [2]. - The service sector is identified as a vital component of the global supply chain and the future of global trade, necessitating collaborative efforts to ensure healthy and stable global trade development [2].

Core Viewpoint - The U.S. government, under President Trump, has imposed new tariffs on imported softwood lumber and wood products to support domestic manufacturing, with a 10% tariff on lumber and a 25% tariff on cabinets and upholstered wood products, effective from October 14 [1][2]. Group 1: Tariff Details - The tariffs will increase the cost of imported wood products, with specific rates set at 10% for lumber and 25% for cabinets and bathroom vanities, with further increases planned for January 1, 2024 [1][3]. - Canada, as the largest supplier of lumber to the U.S., will be significantly impacted, already facing a 35.2% tariff due to previous trade disputes [2][4]. - The legal basis for these tariffs is the Trade Expansion Act of 1962, which allows for tariffs under the guise of national security [2][3]. Group 2: Industry Impact - U.S. home builders have expressed concerns that these tariffs could suppress new home construction and renovation investments, contradicting the administration's goal of stimulating the housing market [1][4]. - The National Association of Home Builders has warned that the housing crisis poses a greater threat to national security than imported lumber, emphasizing the renewable nature of wood and the long-standing trade relationships with countries like Canada and Germany [4][5]. - Retailers in the furniture industry, such as Wayfair and Williams-Sonoma, have raised alarms about the significant cost pressures these tariffs will impose on their businesses, potentially leading to job losses [5]. Group 3: Political and Economic Context - Some Republican lawmakers are pushing for even higher tariffs on furniture and wood products to protect local industries, particularly in North Carolina, a state known for its furniture manufacturing [4][5]. - The tariffs are part of a broader trend of increasing industry-specific tariffs by the Trump administration, which has already targeted steel, aluminum, and various other products [3].

Core Points - The Trump administration continues to utilize import tariffs to revitalize U.S. manufacturing and strengthen national security [1][4] - New tariffs include a 10% tax on imported softwood lumber and a 25% tax on imported cabinets and wood products, effective from October 14, with some rates increasing on January 1 [1] - The increase in tariffs is expected to raise costs in the residential construction and renovation sectors, exacerbating housing affordability issues for average Americans [1] - Approximately 30% of the softwood used in the U.S. comes from Canada, which faces a 14.5% countervailing and anti-dumping duty [1] Industry Insights - The new tariffs are part of a broader strategy to restructure domestic supply chains, although domestic lumber production may not meet the immediate demands of builders [4] - There is a noted generational gap in interest towards manufacturing jobs, with younger individuals preferring careers in fields like social media and fashion design [4] - The latest tariff measures stem from an investigation initiated by the U.S. Department of Commerce under Section 232 of the Trade Expansion Act, which allows for tariffs based on national security concerns [4][5] Legislative Context - The U.S. Department of Commerce has also launched new investigations into imports of robots, industrial machinery, and medical devices under the same legal framework [5] - The International Emergency Economic Powers Act (IEEPA) allows the President to impose tariffs without stringent requirements to prove national security concerns, which has been a focal point in recent tariff implementations [5] - The legality of the White House's invocation of IEEPA is set to be debated in the Supreme Court on November 5 [5]

Economic Overview - In Q2 2025, Hong Kong's GDP grew by 3.1% year-on-year, an increase of 0.1 percentage points from Q1, and a quarter-on-quarter growth of 0.4% [3][5] - Private consumption expenditure rose by 1.9% year-on-year in Q2 2025, recovering by 3.1 percentage points compared to Q1 [3][5] - Local fixed capital formation increased by 2.8% year-on-year in Q2 2025, with machinery and equipment investment accelerating [3][5] Domestic Demand - Consumer spending showed signs of recovery, ending a four-quarter decline, supported by a recovering financial market and stabilizing real estate market [7] - Durable goods consumption fell by 6.2% year-on-year, while non-durable goods consumption increased by 3.1% [7][8] - Investment in machinery and equipment surged by 38.4% year-on-year in Q2 2025, reflecting a stable business environment [8] External Demand - Hong Kong's merchandise exports grew by 11.5% year-on-year in Q2 2025, with a notable increase in exports to emerging markets [9][10] - Service exports rose by 7.5% year-on-year, driven by a recovery in tourism services and sustained growth in financial services [10] Employment and Inflation - The unemployment rate in Hong Kong slightly increased to 3.5% in Q2 2025, with a further rise to 3.9% by August 2025 [12] - The overall consumer price index (CPI) increased by 1.8% year-on-year in Q2 2025, with a slight rise in private housing rent CPI [13] Financial Market - The Hong Kong dollar initially strengthened but later weakened in Q2 2025, influenced by increased trading activity and changes in interest rates [15][16] - The benchmark interest rate remained unchanged in Q2 2025, while HIBOR rates fluctuated significantly [16][21] - The stock market continued its upward trend, with the Hang Seng Index rising by 4.1% in Q2 2025 [21][25] Real Estate Market - Total transaction volume in Hong Kong's real estate market decreased by approximately 21% year-on-year in Q2 2025, but showed a quarter-on-quarter increase [26][28] - The average rent for private residential properties rose by 3.5% year-on-year in Q2 2025, indicating a potential increase in rental yield [28] - The number of new residential units completed in Q2 2025 was 4,577, reflecting a year-on-year increase of 116% due to a low base effect [33] Banking Sector - HIBOR rates declined significantly in Q2 2025, leading to a decrease in net interest margins for banks [4][51] - Customer deposits in the banking sector grew by 4.0% quarter-on-quarter, with a notable increase in foreign currency deposits [38][42] - The asset quality of banks showed slight improvement, with a decrease in the non-performing loan ratio to 2.13% [53]

Group 1 - Japanese companies are facing significant impacts from the U.S. government's steel and aluminum tariffs, which now include at least 720 products categorized as "derivative goods" [1] - The complex tariff structure imposes a 50% steel and aluminum tariff on the portion of products that use these materials, while a "countervailing duty" of 15% applies to Japan [1] - The expansion of the tariff list to include "derivative goods" has raised concerns among foreign companies and industry organizations, as it appears to be aimed at protecting U.S. domestic manufacturing [1] Group 2 - The Japan Construction Equipment Manufacturers Association has requested the Japanese government to negotiate with Washington to exclude construction machinery from the steel and aluminum tariffs [2] - Exports of construction and mining equipment from Japan to the U.S. were valued at over 800 billion yen in FY2024, but saw a 26% year-on-year decline in August [2] - The inclusion of cutlery products in the "derivative goods" category has negatively impacted manufacturers in Niigata Prefecture, with one company expressing concerns about potential price increases leading to reduced consumer demand [2] Group 3 - A recent agreement between Japan and the U.S. established a 15% tariff rate on Japanese exports, making it easier for companies to strategize around additional costs, but the steel and aluminum tariffs have complicated this [2] - The Japanese Minister of Economy, Trade and Industry has stated efforts will be made to assess the impact of the expanded tariffs and coordinate with relevant industries [2] - The U.S. Department of Commerce has initiated an investigation to determine if specific tariffs or import restrictions should be applied to machine tools, industrial robots, and medical devices, causing the Japanese machine tool industry to remain cautious [2]