The U.S. and China agreed to keep lines of communication open, following a call between senior officials Thursday, signaling continued high-level engagement as both sides work toward a broader deal.

Chinese Vice Foreign Minister Ma Zhaoxu and U.S. Deputy Secretary of State Christopher Landau exchanged views on a range of key issues during the call, both sides said in closely aligned statements released Friday, without specifying whether tariffs were among the topics discussed.

While the call may not indicate a breakthrough in the ongoing trade talks, it is a “positive sign” that Beijing now knows who to talk to on the U.S. side, said Dan Wang, China director at political risk consultancy Eurasia Group, adding that “the communication channel established in the Geneva talks is working.”

Following the high-level talks in Geneva, Switzerland, earlier this month, both sides issued a rare joint statement to temporarily lower most tariffs on each other’s goods, while working toward a broader agreement.

The last time both sides issued a joint statement was in November 2023, which focused on climate cooperation.

The call between Ma and Landau was the second diplomatic-level call between the U.S. and China during U.S. President Donald Trump’s second term, said Xinbo Wu, director of the Center for American Studies at Fudan University. Chinese Foreign Minister Wang Yi had spoken with U.S. Secretary of State Marco Rubio in January after Trump returned to the office.

The Thursday call signals that both sides are “reconnecting” on the diplomatic level and may be preparing for upcoming talks on Beijing’s cooperation in curbing fentanyl flows, Wu said.

Earlier this week, Ma had met with the new U.S. Ambassador to China, David Perdue, signaling that Beijing hopes to align more closely with the U.S. in the ongoing trade discussion, according to a readout of the meeting.

In that meeting, Perdue said he had shared Trump’s priorities for the bilateral relations, according to a post on his X account. “I look forward to working with the Ministry and counterparts to achieve concrete outcomes for the American people,” he said in the post.

Trump has made it a priority to curb the flow of fentanyl precursors from China, which are used to make the deadly opioid. He has also urged Beijing to open up its markets to the U.S.

Perdue’s arrival in Beijing came as a trade war between the world’s two largest economies had stoked fears of a broader “decoupling.”

Chinese exporters are looking to diversify away from the U.S. market, according to industry surveys and economists, undeterred by the temporary tariff truce, while American firms accelerate efforts to shift production out of China.

In a separate meeting with JPMorgan Chase Jamie Dimon on Thursday, Chinese Vice Premier He Lifeng said the negotiations with the U.S. on economic and trade issues have “made substantial progress,” stressing Beijing’s stance of intending to further open up the market for American businesses to operate in China.

Yuyuantantian, a social media account affiliated with Chinese state media CCTV, claimed Dimon said in meetings with Chinese officials that the U.S. government does not want to decouple with China.

Despite the recent de-escalation following the Geneva talks, Beijing and Washington have continued to trade barbs, underscoring the fragile state of the relations.

Chinese authorities have pushed back against a U.S. decision that warned companies not to use Chinese-made artificial intelligence chips, particularly those provided by Huawei Technologies.

China’s Ministry of Commerce earlier this week called the move “unilateral bullying” and blamed the U.S. for undermining trade talks, vowing to take resolute measures to protect its rights and interests.

Correction: This story has been updated to reflect that the call was with U.S. Deputy Secretary of State Christopher Landau.

This report is from this week’s CNBC’s “Inside India” newsletter which brings you timely, insightful news and market commentary on the emerging powerhouse and the big businesses behind its meteoric rise. Like what you see? You can subscribe here.

Each weekday, CNBC’s “Inside India” news show gives you news and market commentary on the emerging powerhouse businesses, and the people behind its rise. Livestream the show on YouTube and catch highlights here. 

SHOWTIMES:

U.S.: Sunday-Thursday, 23:00-0000 ET
Asia: Monday-Friday, 11:00-12:00 SIN/HK, 08:30-09:30 India 
Europe: Monday-Friday, 0500-06:00 CET

U.S. President Donald Trump has never been the one to hold back an opinion.

“I had a little problem with Tim Cook yesterday,” Trump said on a trip to Qatar last week, referring to a conversation he had with Apple’s chief executive about the company’s decision to move iPhone manufacturing from China to India, rather than the United States.

“I don’t want you building in India,” Trump said he told Cook, after news emerged of Apple’s decision to ramp up production in India with the aim of making around 25% of global iPhones in the country in the next few years, and reduce reliance on China, where around 90% of its flagship smartphone is currently assembled.

While India has certainly emerged as a significant, albeit nascent, hub for electronics assembly, the path to it becoming a clear-cut alternative to China isn’t a guaranteed outcome, despite U.S. tariffs on Chinese goods.

Geopolitical upheavals appear to be one of the many such hurdles for India, as well as businesses eyeing the country.

For Apple, moving manufacturing to the United States, instead of India, from China still remains within the realm of possibilities, even if improbable for the company.

If Apple were to move final assembly to the United States, iPhone costs could increase by 25% due to higher U.S. labor costs, according to analysts from Bank of America. However, that assumes subcomponents, like cameras, are still partly assembled outside the U.S.

To put that into context, the base model for iPhone 16 Pro Max costs $1,199 to buy outright, with $125.90 added in local taxes in Louisiana, for instance. Final assembly and testing in the U.S. would simply add $160 to the consumer’s bill.

Meanwhile, the jobs at stake are performed by 1.4 million people employed by Apple’s suppliers overseas.

Could Trump and his backers believe that the additional costs might be worth paying if many thousands of jobs are created in the U.S.?

“If Apple does move final assembly to the U.S., it would need tariff waivers on components/sub-assemblies manufactured globally to make the manufacturing shifts viable,” BofA’s Wamsi Mohan said in a note to clients.

While technically possible, Mohan views moving the entire iPhone supply chain to the U.S. as a “much bigger undertaking” that would “likely take many years, if even possible,” and does not expect near-term manufacturing shifts to the U.S. unless tariff policies become permanent.

The core challenge for India extends beyond just attracting companies.

“Supply chain and manufacturing, these things take a long time to establish,” said Nick McConway, head of Asia ex-Japan equity at Amundi Asset Management. “We saw that with Vietnam, who had to put huge investment into infrastructure. The lights have to stay on, the roads have to be there, the trucks have to get there in time.”

“I think India is only at the very early stage of developing these types of globally facing manufacturing capacities,” McConway added.

The fund manager also highlighted that while labor costs can be low in India, it doesn’t mean savings for companies moving their manufacturing base to India.

“While your labour costs can be low, your unit labour cost is not because the productivity is no good,” McConway said.

Meanwhile, for the U.S., this productivity gap can offset the advantages of cheaper labor, making it difficult for India to compete effectively on a global scale for high-value manufacturing. Apple has also made significant progress in automating several roles in its final assembly line, reducing the number of people required by more than 50% since the process began.

And even if India wins a larger share of Apple’s iPhone assembly business, the benefits for the country are likely to be minimal, according to one analyst.

“Today, India earns just $30 per iPhone, much of which is given back to Apple as subsidy under the [Production Linked Incentive] scheme,” said Ajay Srivastava, founder of think tank Global Trade Research Initiative.

Srivastava, a former trade negotiator for India, took a protectionist approach and suggested that New Delhi’s reduction of tariffs on smartphone components at the behest of Apple could hurt domestic efforts to build a local component ecosystem.

“If Apple’s assembly moves out, India will be forced to stop propping up shallow assembly lines and instead invest in deeper manufacturing—chips, displays, batteries, and beyond.”

In the end, it might not even be Trump’s push to reshore manufacturing back to the U.S. that devoid India of foreign investment. The country might just have work harder to attract investors.

— CNBC’s Michael Bloom and Arjun Kharpal contributed reporting.

India’s market is one of the best long-term plays, analysts say. As the “sell U.S.” narrative picks up steam amid U.S. tariff turbulence and concerns over the country’s mounting fiscal deficit, emerging markets have gained traction as an attractive alternative for investors. Among emerging markets, Malcolm Dorson, head of the active investment team at Global X ETFs, believes India offers the best long–term growth play, a sentiment echoed by Mohit Mirpuri, equity fund manager at SGMC Capital, who said that theme is anchored in India’s domestic demand.

India is hoping for a full exemption from the U.S.’ “reciprocal” tariffs. The duties on the South Asian country come in at 26%, and officials are seeking to strike a deal with the U.S. to do away with the tariffs completely, according to CNBC TV18. However, India is reluctant to let goods like agriculture and dairy be imported, which is likely proving to be a roadblock in the negotiations, said former Indian Ambassador to the World Trade Organisation Jayant Dasgupta. That said, India’s large domestic economy and low dependence on imports could shield it from the impact of tariffs, according to a Moody’s Ratings report released May 21.

Britain and the U.S. are working together to preserve the India-Pakistan ceasefire. “Confidence-building measures” and dialogues are on the table, U.K. Foreign Minister David Lammy said on Saturday. India on May 6 said its armed forces had conducted strikes against Pakistan and what it calls Pakistan-occupied Jammu and Kashmir, targeting “terrorist infrastructure.” The operation follows a militant attack last month in Pahalgam, Jammu and Kashmir, in which 26 people were killed.

— Yeo Boon Ping

Indian stocks have declined over the past week by more than 1.5% so far. The Nifty 50 index has risen by 3.65% this year.

The benchmark 10-year Indian government bond yield has ticked slightly lower to 6.22%, down by 2 basis points over the past week.

On CNBC TV this week, Lavina Quadros, managing director of equities research at Jefferies India, said India’s defense sector has “come a long way” in the last ten years, since the government pushed to reduce such imports to 30% from 70%. Investor confidence in Indian defense firms has also been boosted because domestic air defense systems, for instance, have successfully intercepted foreign drones. But execution of orders remains a key concern for investors.

Meanwhile, Sanjeev Sanyal, a member of the Indian Prime Minister’s Economic Advisory Council, noted that the global supply chain will likely look different by 2030 — and India intends to play a key role in it. The country is already “a very important part of the global services supply chain,” a fact neglected by many, and will now focus on efforts in manufacturing, especially in the electronics and metals, Sanyal added. Even if the U.S. wants to reindustrialize itself, the country will still have to rely on others for materials, and that presents an opportunity for India, Sanyal said.

— Yeo Boon Ping

Borana Weaves, a fabric producer, lists on the Indian stock market Tuesday, followed by automotives part manufacturer Belrise Industries on Wednesday.

May 27: Borana Weaves IPO

May 28: Belrise Industries IPO, India industrial and manufacturing production for April

May 29: U.S. Federal Open Market Committee minutes for May meeting

— Yeo Boon Ping

Hong Kong passed a stablecoin bill on Wednesday to expand its cryptocurrency licensing regime as more governments recognize the digital asset.

Unlike volatile digital assets like bitcoin, the value of stablecoins is tied to a real-world asset like fiat currencies or commodities like gold.

The new law — focused on fiat-referenced stablecoins — will require stablecoin issuers to obtain a license from the Hong Kong Monetary Authority and comply with a range of requirements, including proper management of asset reserves and segregation of client assets.

It will “enhance Hong Kong’s existing regulatory framework on virtual-asset (VA) activities, thereby fostering financial stability and encourging financial innovation,” the central banking body said. It added that it would conduct further consultations on the detailed regulatory framework.

The Hong Kong government said in a statement that the stablecoins policy is expected to come into effect this year, with “sufficient time” allowed for the industry to understand the requirements.

In 2023, Hong Kong introduced its virtual asset licensing regime, which requires cryptocurrency firms with an official presence in the city to apply for licenses and meet specific standards and requirements to offer digital assets to retail investors in the city. However, the existing policy did not include stablecoins in its purview. 

“Hong Kong’s new stablecoin policy sets a global benchmark by mandating full reserve backing, strict redemption guarantees, and HKMA oversight,” YeFeng Gong, risk and strategy director of HashKey OTC, told CNBC. HashKey OTC is a trading arm of the HashKey Group, which has a licensed crypto platform in Hong Kong.

The policy “ensures institutional-grade reliability for traders while positioning Hong Kong as a leader in compliant digital finance,” he added. 

The move from Hong Kong comes just days after the U.S. Senate advanced the GENIUS Act, which would establish the first regulatory framework for issuers of stablecoins if implemented.

A push to regulate stablecoins has been intensifying globally, with other jurisdictions having also implemented their own regulatory frameworks, including the European Union, Singapore, the United Arab Emirates and Japan, blockchain intelligence firm Chainalysis said in a report on Wednesday.

Chengyi Ong, head of Asia-Pacific policy at Chainalysis, told CNBC that the latest regulations are expected to help with crypto adoption and legitimacy. 

“[Stablecoins] form the backbone of the crypto ecosystem, but their stability also opens the door to their use in overcoming frictions dogging traditional finance, such as slow cross-border payments and settlement,” Ong said.

“This potentially transformative utility is what has driven governments around the world, from Europe to Asia, to take steps toward regulatory regimes that will facilitate the emergence of high-quality stablecoins,” she added.

According to Chainalysis, the total market cap of stablecoins is around $232 billion as of this month.

Chinese electric-vehicle maker Xpeng saw its shares in Hong Kong surge over 10% Thursday following upbeat earnings and stronger-than-expected revenue forecast for the second quarter.

Its shares soared as much as 10.2% to 85.5 Hong Kong dollars ($10.86), and were last trading 7% higher, taking year-to-date gains to 78%.

The Guangzhou-based carmaker’s first-quarter revenue more than doubled from a year earlier, driven by robust sales.

Xpeng said it delivered 94,008 vehicles in the first three months this year, more than four times the sales volume a year earlier.

That improved top line helped narrow its net loss for the first quarter to 664 million yuan, compared to 1.37 billion yuan a year ago, and lifted its gross margin to 15.6% for the quarter from 12.9% a year earlier.

The company is a key player in China’s hypercompetitive EV market, but has struggled to turn a profit amid rising competition and sluggish domestic demand.

Analysts widely expect Xpeng will likely turn profitable in the fourth quarter this year, thanks to its strong sales momentum and pipeline of new models.

The company has launched several new products, including the mass-market brand MONA last August and a renewed flagship model X9, featuring advanced autonomous driving system.

The automaker said it aims to begin mass production of vehicles equipped with Level 3 autonomous driving features in China by year-end, a significant upgrade from the currently more common Level 2 systems.

For the second quarter, Xpeng said it anticipates a revenue of 17.5 billion yuan to 18.7 billion yuan, compared with consensus forecast of 17.2 billion yuan, according to data compiled by LSEG.

It expects to deliver 102,000 and 108,000 of electric cars in the second quarter — a jump of around 237.7% to 257.5% from a year earlier.

That optimistic earning forecast lifted investor sentiment, sending Xpeng’s U.S.-listed shares 13% higher to close at $22.25, powering a year-to-date rally of over 88%. Still, it is well off its record of more than $72 apiece hit in November 2020, according to LSEG data.

Rival BYD has seen shares in Hong Kong surge over 74% so far this year, Li Auto has risen more than 22%, while NIO has lost over 11%.

— CNBC’s Arjun Kharpal contributed to this story.

This report is from this week’s CNBC’s The China Connection newsletter, which brings you insights and analysis on what’s driving the world’s second-largest economy. Each week, we’ll explore the biggest business stories in China, give a lowdown on market moves and help you set up for the week ahead. Like what you see? You can subscribe here.

Just a week after a breakthrough in U.S.-China trade tensions, neither side can yet be confident that the other is holding up their end of the bargain.

“These 90 days won’t be smooth,” Liu Weidong, research fellow at a state-affiliated think tank, the Chinese Academy of Social Sciences’ Institute of American Studies, told me this week. That’s according to a CNBC translation of his Mandarin-language remarks.

He predicts elevated uncertainty and smaller steps next, given the already-large breakthrough, as the U.S. and China each try to feel the other out towards a middle ground.

The posturing has already begun.

China’s Ministry of Commerce on Wednesday warned that it would take legal action against those involved in assisting or implementing measures to curb the usage of advanced semiconductors from China.

It follows an earlier accusation by the same ministry on Monday that blamed the U.S. for undermining trade talks with a Huawei chip warning last week — although the U.S. Bureau of Industry and Security had actually toned down its language and dismissed a more restrictive Biden-era plan on chips.

Many in the U.S. are also concerned that China isn’t relaxing rare earth export controls, another area in which China dominates the supply chain. That’s despite the joint statement’s vague description of how China would “suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.”

“I do think Washington was expecting the export controls on that group of rare earths to be lowered, permitting exports in a relatively unrestricted way,” said Scott Kennedy, senior adviser and trustee chair in Chinese Business and Economics at the Center for Strategic and International Studies in Washington, D.C.

“If it turns out that, in fact, that is not the result, the U.S. will probably conclude that China is in violation of the agreement,” he said. “We could see a re-escalation sooner rather than later.”

While the White House has yet to respond to a CNBC request for comment, a step back reveals ambiguity on China’s side.

But are the rare earth export controls part of China’s countermeasures to U.S. tariffs? That’s up for debate. An April 4 document from China’s commerce ministry and customs agency announcing the export controls did not explicitly label them as such.

While China did pause restrictions on 28 U.S. entities that were slapped with export controls on critical minerals, the ministry has made several public statements about strengthening export controls on critical minerals.

“Given the comprehensive and competitive nature of bilateral relations, the current truce — while focused on trade—can easily be undermined by export controls,” said Yue Su principal economist, China, at The Economist Intelligence Unit.

“While rhetorical posturing is unlikely to undermine the 90-day truce, China may well recalibrate its export control regime in a measured response to U.S. actions,” she said.

The Chinese commerce ministry on Sunday also announced duties of up to 74.9% on imports of an engineering plastic from the U.S., Europe, Japan and Taiwan.

U.S. President Donald Trump last week told Fox News he is open to a call with Chinese President Xi Jinping, or even a trip to China. But Beijing hasn’t dropped any hints.

“I’d be surprised if the two step into the middle of these issues right now with so much unclear,” Kennedy said.

The new U.S. Ambassador to China, David Perdue, arrived in Beijing on Thursday, slightly more than two weeks after being confirmed by the Senate. He was previously the head of Asia for U.S. packaged consumer goods company Sara Lee.

One of Perdue’s first social media posts called for “strong actions” on fentanyl. He said on X that, together with U.S. Trade Representative Jamieson Greer, they were “meaningfully engaged with the Chinese on next steps to stop this dangerous situation.”

The U.S. has left in place 20% in tariffs imposed earlier this year over China’s alleged role in the fentanyl crisis.

The joint statement last week said the U.S. and China would establish a mechanism for talks about economic and trade relations, but neither side has specified when the next one would occur.

Liu, who helped author a report in February with The Carter Center about bilateral cooperation, emphasized the overall focus of the current talks is trade rather than tech. He expects that China could eventually agree to buy more U.S. agriculture and energy products — given the perception that pressuring farmers can influence Trump.

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Chinese exporters are doubling down on non-U.S. markets. That’s based on a poll by Allianz Trade. But a Shanghai-based baby products company on Tuesday announced a major ramp-up of its U.S. market expansion. Meanwhile, analysts and industry players point out how some Chinese exporters have found illicit ways around U.S. tariffs.

Retail sales and industrial production growth slowed in April. The sluggish real estate sector showed little sign of improvement. However, major Chinese online shopping companies reported better sales in the first quarter, helped by artificial intelligence-powered ads. Electric car company Leapmotor said its gross margin for the first quarter was a record 14.9%, while Chinese battery giant CATL raised $4.6 billion in its Hong Kong listing on Tuesday.

China is gearing up for its next five-year plan. The next set of development goals will kick in next year. The science ministry, central bank and several other ministries have also announced measures to support “high-level scientific and technological self-reliance.” A new policy for preventing government spending waste calls for favoring domestic vehicles, especially new energy makes.

Chinese and Hong Kong stocks climbed Wednesday.

Mainland China’s CSI 300 was up 0.68% while Hong Kong’s Hang Seng Index — which includes major Chinese companies — rose 0.53% as of 12 p.m. local time.

The benchmark 10-year Chinese government bond yield is at 1.669%.

May 22: Xiaomi to release mobile phone chip, its first SUV and other products

May 27: China to report industrial profits for April

It’s no secret that building a successful startup often involves risk, iteration and failure. Dayu Dara Permata knows this well.

The 36-year-old is the co-founder and CEO of Indonesian property transaction platform Pinhome. Over the course of about five years, she went from bootstrapping the business out of her own garage to raising over $75 million to date, according to a company representative and data from PitchBook.

“Entrepreneurship is really hard. There’s no instant success … You just have to be ready to fail,” Permata told CNBC Make It. “If you are trying to avoid failure altogether, [then] you’re just delaying it.”

“Maybe you’re not trying enough — that’s why you’ve not seen failures, but what it does is it’s really hindering growth,” she added.

Permata, who was born and raised in Indonesia, has always been an overachiever.

“I’m born from a very simple family … we didn’t come from money, so I had to really earn everything that I wanted,” she said, adding that her parents were always strict and demanding with her.

“I was always expected to deliver, to be number one, to succeed academically,” she said. “I always liked property, because, living with very strict parents — [it was] my house, my rules. So, I thought I wanted to own my own house, so I could have my own rules,” Permata said.

She said she was studious, competitive and “always focused on academics” as a kid. By the age of 23, she had already purchased an investment property, the first of several.

Upon graduating from university, she went on to pursue an almost decade-long corporate career, eventually landing a senior vice president role at Southeast Asian on-demand services platform Gojek, where she met Pinhome co-founder Ahmed Aljunied.

After working at Gojek for about four years, Permata said she felt ready to embark on her own entrepreneurial journey.

“I think at the end of my time at Gojek, [the company] was operating in 200 plus cities in all of Indonesia,” she said. “I had worked with my CTO, Ahmed … [He] was always very entrepreneurial. He had built businesses before, and he [said]: ‘Why don’t we start our own?'”

So in early 2019, the two began ideating and building the business out of Permata’s home garage. Over the course of about nine months, Permata said she invested about $150,000 of her own savings into bootstrapping the company.

“My husband was my first employee. We had our first five team members working out of our [garage]. It was really like nine months of bootstrapping,” she said. “I was also working full time at Gojek, and it was still quite long hours that [I was working there], but we managed to squeeze in time [for our startup.]”

Informed by her own experiences as a property investor, Permata knew she wanted to address the many pain points in Indonesian real estate. She said the process of buying and maintaining property was very “manual” and “fragmented.”

“All the pain of searching for a home, and connecting with agents … [It’s a] six to nine month process, all on WhatsApp, and you’re dealing with complete strangers … and I thought: ‘Why is it so traditional and why hasn’t technology transformed the sector?'”

Permata and her co-founder felt that the real estate sector in Indonesia was ripe for transformation.

“We tested different business models … In the first business model, we were exploring crowdfunding for real estate. The second business model, we were exploring property management. Then the third time, we were exploring … co-ownership of real estate,” she said.

“We went through that iteration almost every two or three months,” she said.

After testing a few failed ideas, Permata and Aljunied landed on their fourth idea, which ultimately became what Pinhome is today — an end-to-end property transaction platform that offers brokerage, mortgage and home services.

Pinhome was launched in January 2020 and serves more than 3.5 million monthly active users across its website and mobile apps today, according to a company representative.

“Fail fast, learn fast. That’s how you get closer to success,” Permata suggested. “Try to fail every day, but learn from it … I think that will help you with your stamina in the long run, because it isn’t a sprint, it’s a marathon.”

“If you are not managing your energy well, then you might quit before you reach success,” she added.

Want a new career that’s higher-paying, more flexible or fulfilling? Take CNBC’s new online course Make a Powerful Career Change and Land a Job You Love. Expert instructors will teach you strategies to network successfully, revamp your resume and confidently transition into your dream career.

BEIJING — One Chinese baby products company announced Tuesday it is officially entering the United States, the world’s largest consumer market — regardless of the trade war.

Shanghai-based Bc Babycare expects its supply chain diversification and the U.S. market potential to more than offset the impact of ongoing U.S.-China trade tensions, according to Chi Yang, the company’s vice president of Europe and the Americas.

“Even [if] the political things are not steady … I’m very confident about our product for the moment,” he told CNBC, adding he anticipates “very fast” growth in the U.S. in coming years. That includes his bold predictions that Bc Babycare’s flagship baby carrier can become the best-seller on Amazon.com in half a year, and that U.S. sales can grow by 10-fold in a year.

The $159.99 carrier, eligible for a $40 discount, already has 4.7 stars on Amazon.com across more than 30 reviews. The device claims to reduce pressure on the parent’s body by up to 33%. A far cheaper version of the baby carrier is a top seller among travel products for pregnancy and childbirth on JD.com in China.

Bc Babycare already has the carrier stocked in its U.S. warehouses, and has a network of factories and raw materials suppliers in the Americas, Europe and Asia, Yang said. “The global supply chain is one of the things we keep on building in the past couple years.”

The Trump administration has sought to reduce U.S. reliance on China-made goods and to encourage the return of manufacturing jobs to the U.S. In a rapid escalation of tensions last month, the U.S. and China had added tariffs of more than 100% on each other’s goods. Last week, the two sides agreed to a 90-day pause for most of the new duties in order to discuss a trade deal.

Baby gear is particularly sensitive to tariffs since the majority of those sold in the U.S. are made in China, said U.S.-based Newell Brands, which owns stroller company Graco, on an April 30 earnings call. That’s according to a FactSet transcript.

The company said it raised baby gear prices by about 20% in the last few weeks, but had not incorporated the additional 125% tariffs announced in mid-April. Newell said on the call it had about three to four months of inventory in the U.S., and had paused additional orders from China.

The company did not respond to a request for comment about whether it had resumed orders from China and whether it planned more price increases.

Bc Babycare declined to share how much it planned to invest in the U.S. But Yang said the company plans to open an office in the country and hire about five to 10 locals.

The company initially plans to sell online, spend on marketing and eventually work with major retailers for offline store sales. Its partners for raw materials and research include three U.S. companies: Lyra, Dow and Eastman.

The Chinese company, which entered the baby products segment in 2014, in 2021 claimed a 700 million yuan ($97.09 million) funding round from investors including Sequoia Capital China.

Yang said the company scrutinizes the comments section on Chinese and U.S. e-commerce websites to improve its products. As a result, the U.S. version of the baby carrier is softer and larger than the Chinese version, he said.

Bc Babycare’s U.S. market ambitions reflect how large U.S. and European multinationals not only face growing competition in China, but also in their home markets.

“After experiencing substantial growth due to the premiumization of consumption in the Chinese market, multinational brands are now entering a challenging second phase where they compete fiercely for market share,” Dave Xie, retail and consumer goods partner in Shanghai at consultancy Oliver Wyman, said in a statement last week.

Oliver Wyman said in a report last month that the Chinese market has become the incubator for premium product innovations that are being exported. The authors noted, for example, that Tineco floor scrubbers have become Amazon best-sellers.

Australia’s central bank cut its policy rate by 25 basis points to the lowest in two years as inflation concerns in the country continue to recede, giving room for the bank to ease monetary policy.

The Reserve Bank of Australia cut the benchmark rate to 3.85%, its lowest level since May 2023, in line with expectations from economists polled by Reuters.

While the RBA said that the upside risks to inflation had diminished “substantially,” the uncertainty over global trade policy will likely continue to weigh on the economy.

“Headline inflation is expected to increase over the second half of 2025 as temporary government subsidies to households are unwound, before returning to around the midpoint of the target range later in the forecast period,” the central bank said in its monetary policy statement.

Australia’s inflation has been on a downtrend, with the most recent headline inflation figure coming in at a four-year low of 2.4% in the first quarter of 2025. The RBA’s target range for inflation is between 2% and 3%.

However, the central bank cautioned that household consumption may recover at a slower pace than previously expected, resulting in subdued growth in overall demand and a sharper deterioration in the job market.

“There is a good chance that [the RBA] will cut rates further than we are currently anticipating [in] this cycle,” Abhijit Surya, senior APAC economist at Capital Economics, said in a note.

Surya, however, believes that the bank overestimated the extent to which its economy will be hurt by the widespread trade tensions.

The Australian economy has seen somewhat of a turnaround, with the most recent GDP reading showing a 1.3% year-on-year expansion in the fourth quarter and marking its first expansion since September 2023.

However, analysts, ahead of the RBA meeting, have highlighted downside risks for the Australian economy due to global trade tensions and uncertainty around the domestic economy.

In a May 16 note, HSBC analysts noted that “the global economy and financial markets have had tumultuous times” since the RBA’s last meeting on April 1, including the imposition — and subsequent suspension — of U.S. President Donald Trump’s “Liberation Day” tariffs.

The analysts forecasted a “modest negative growth impact” on the country, and said that the market shocks are likely slightly disinflationary for Australia.

This is due to weaker expected global growth and trade diversion of manufactured goods from China into non-U.S. markets, including Australia.

Carl Ang, Fixed Income Research Analyst at MFS Investment Management, also noted in a May 15 note that downside risks and uncertainty around Australia’s economic outlook have increased substantially, due to “Liberation Day” and global trade policies.

This will likely prompt a “tangibly dovish pivot from the RBA,” he said, forecasting that the central bank will reach a terminal rate of 3.1% in early 2026.

China cut its key lending rates by 10 basis points on Tuesday, as Beijing ramps up efforts to boost its economy at a time when trade tensions threaten to derail growth.

The People’s Bank of China trimmed the 1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%.

This marked the first reduction in rates since the central bank’s 25-basis-point cut in October, as Beijing intensifies efforts to shore up its economy.

The benchmark lending rates — normally charged to banks’ best clients — are calculated monthly based on designated commercial banks’ proposed rates submitted to the PBOC.

The 1-year LPR influences corporate and most household loans in China, while the 5-year LPR serves as a benchmark for mortgage rates.

The rate cuts came as a slew of state-backed commercial lenders moved to reduce their deposit rates by as much as 25 basis points earlier Tuesday in an effort to protect their net interest margin, paving the way to lower key lending rates.

The bundle of rate cuts came as part of a package of stimulus measures announced by Beijing earlier this month, including reductions to the lending rates and the amount of cash that banks must hold in reserves. Mortgage rates under the nation’s housing provident fund, a government-backed housing lender, was also lowered by 25 basis points.

Chinese offshore yuan has shaken off some depreciation pressure to stay relatively stable, last trading at 7.2178 against the U.S. dollar, after weakening to a record low of 7.4287 last month, according to LSEG data.

Trade-war fears have receded after a meeting of U.S. and Chinese trade representatives in Switzerland earlier this month led to a lower set of levies between the world’s two largest economies. Beijing and Washington agreed to roll back most tariffs for 90 days, allowing some room for further negotiation to reach a more lasting deal.

That prompted a slew of global investment banks to raise their forecasts for China’s economic growth this year while paring back expectations for more proactive stimulus as Beijing strives to reach its growth target of around 5%.

Nomura raised its forecast for China’s GDP growth for quarter ending June to 4.8% from 3.7% on the back of resilient economic data in April, while lifting the full-year growth projection to 3.7% from 3.5%.

Despite the near-term upside, the bank cautioned “a high risk of the economy suffering from a double whammy” due to the prolonged housing slump and possibility of U.S. ratcheting up tariffs again.

Chinese authorities have set an ambitious growth target of “around 5%” this year.

Wholesale prices posted their steepest drop in six months in April, while consumer prices fell for a third moth, underscoring the persistent deflationary pressure in the economy. While the economy is grappling with the drag of deflation, economists widely anticipate Beijing to roll out additional stimulus in staggered way and at a slower pace.

Additional stimulus measures are likely to be “lighter and delayed given a lower tariff path,” a team of economists at Morgan Stanley said in a note Monday.

Despite the tariff reprieve, U.S. trade-weighted tariff rate on China remained elevated at 40%, well above the 11% levies before Trump returned to the office, according to the investment bank’s estimates.

“Deflation could linger, given still elevated tariffs and reactive policy,” Morgan Stanley added, as higher tariffs will ultimately dampen external demand after the near-term export front-loading activity tapers off, exacerbating domestic excess capacity issue.

Nvidia CEO Jensen Huang made a slew of announcements and revealed new products on Monday that are aimed at keeping the company at the center of artificial intelligence development and computing. 

One of the most notable announcements was its new “NVLink Fusion” program, which will allow customers and partners to use non-Nvidia central processing units and graphics processing units together with Nvidia’s products and its NVLink. 

Until now, NVLink was closed to chips made by Nvidia. NVLink is a technology developed by Nvidia to connect and exchange data between its GPUs and CPUs.

“NV link fusion is so that you can build semi-custom AI infrastructure, not just semi-custom chips,” Huang said at Computex 2025 in Taiwan, Asia’s biggest electronics conference.

According to Huang, NVLink Fusion allows for AI infrastructures to combine Nvidia processors with different CPUs and application-specific integrated circuits (ASICs). “In any case, you have the benefit of using the NV link infrastructure and the NV link ecosystem.”

Nvidia announced Monday that AI chipmaking partners for NVLink Fusion already include MediaTek, Marvell, Alchip, Astera Labs, Synopsys and Cadence. Under NVLink Fusion, Nvidia customers like Fujitsu and Qualcomm Technologies will also be able to connect their own third-party CPUs with Nvidia’s GPUs in AI data centers, it added.

Ray Wang, a Washington-based semiconductor and technology analyst, told CNBC that the NVLink represents Nvidia’s plans to capture a share of data centers based on ASICs, which have traditionally been seen as Nvidia competitors. 

While Nvidia holds a dominant position in GPUs used for general AI training, many competitors see room for expansion in chips designed for more specific applications. Some of Nvidia’s largest competitors in AI computing — which are also some of its biggest customers — include cloud providers such as Google, Microsoft and Amazon, all of which are building their own custom processors. 

NVLink Fusion “consolidates NVIDIA as the center of next-generation AI factories—even when those systems aren’t built entirely with NVIDIA chips,” Wang said, noting that it opens opportunities for Nvidia to serve customers who aren’t building fully Nvidia-based systems, but are looking to integrate some of its GPUs.

“If widely adopted, NVLink Fusion could broaden NVIDIA’s industry footprint by fostering deeper collaboration with custom CPU developers and ASIC designers in building the AI infrastructure of the future,” Wang said. 

However, NVLink Fusion does risk lowering demand for Nvidia’s CPU by allowing Nvidia customers to use alternatives, according to Rolf Bulk, an equity research analyst at New Street Research.

Nevertheless, “at the system level, the added flexibility improves the competitiveness of Nvidia’s GPU-based solutions versus alternative emerging architectures, helping Nvidia to maintain its position at the center of AI computing,” he said. 

Nvidia’s competitors Broadcom, AMD, and Intel are so far absent from the NVLink Fusion ecosystem.

Huang opened his keynote speech with an update on Nvidia’s next-generation of Grace Blackwell systems for AI workloads. The company’s “GB300,” to be released in the third quarter of this year, will offer higher overall system performance, he said. 

On Monday, Nvidia also announced the new NVIDIA DGX Cloud Lepton, an AI platform with a compute marketplace that Nvidia said will connect the world’s AI developers with tens of thousands of GPUs from a global network of cloud providers.

“DGX Cloud Lepton helps address the critical challenge of securing reliable, high-performance GPU resources by unifying access to cloud AI services and GPU capacity across the NVIDIA compute ecosystem,” the company said in a press release.

In his speech, Huang also announced plans for a new office in Taiwan, where it will also be building an AI supercomputer project with Taiwan’s Foxconn, officially known as Hon Hai Technology Group, the world’s largest electronics manufacturer. 

“We are delighted to partner with Foxconn and Taiwan to help build Taiwan’s AI infrastructure, and to support TSMC and other leading companies to advance innovation in the age of AI and robotics,” Huang said.