The United States and China agreed on May 12 to a 90-day pause on reciprocal tariffs, with both countries slashing tariff rates by 115 percentage points, marking a significant step toward de-escalating trade tensions. Following high-level talks in Geneva, the US announced it will reduce tariffs on Chinese goods from 145 per cent to 30 per cent, while China will lower tariffs on US goods from 125 per cent to 10 per cent, effective May 14.

The temporary truce has drawn a wide spectrum of reactions. Global markets showed cautious optimism, with major retailers like Walmart and Target welcoming the decision, hoping it will ease cost pressures and supply chain disruptions. Port authorities and logistics firms also expressed hope for a rebound in trade flows.

US Treasury Secretary Scott Bessent said the discussions were ‘robust and productive,’ adding that both sides are committed to avoiding economic decoupling. A joint statement confirmed the creation of a mechanism for continued trade dialogue.

The announcement triggered strong market reactions. US stock futures rallied, with the S&P 500 up 1.6 per cent and Nasdaq 100 gaining 2 per cent, while gold fell 1.6 per cent. The Hang Seng Index in Hong Kong was poised for its best run in a year, and crude oil prices also surged. The dollar strengthened as Treasury yields climbed and expectations of interest rate cuts receded.

US Trade Representative Jamieson Greer emphasized that the Geneva deal marks a breakthrough in reducing trade deficits and stabilizing supply chains. Financial markets welcomed the move, easing fears of prolonged economic disruption. Analysts called it a clear shift toward risk-on sentiment.

However, economists cautioned the tariff rollback is temporary and further negotiations are needed. Zhiwei Zhang of Pinpoint Asset Management called it “a very good starting point,” but warned that a permanent resolution will take months.

This was the first in-person meeting of top economic officials since Trump launched the tariff standoff.

In a letter to Jam Kamal, Commerce Minister and Sardar Awais Leghari, Power Minister, Pakistan Textile Exporters Association (PTEA) has formally requested for a revamp of the electricity rate structure for industrial users, pointing out inconsistencies among B-2, B-3, and B-4 consumer categories. These discrepancies are based on factors like voltage level, system losses, and how meters are set up.

Highlighting a critical flaw in the industrial electricity tariff design that was recently updated by the National Electric Power Regulatory Authority (NEPRA), PTEA argues, the current rate system goes against standard grid cost principles and discourages industrial customers from investing in more efficient, high-voltage grid connections.

Under the current NEPRA tariff, which became effective July 1, 2024, off-peak variable energy charges are set as follows: 28.56 Pakistani Rupees (Rs) per kilowatt-hour (kWh) for B-2 customers (400V), Rs 29.39 per kWh for B-3 customers (11 kV), and Rs 29.11 per kWh for B-4 customers (132 kV).

According to the PTEA's analysis based on a standard cost-of-service approach, the tariff should be lower for higher-voltage connections. This is because they result in reduced distribution losses, improved system efficiency, and eliminate the need for maintaining low-tension infrastructure.

Despite these advantages, B-3 and B-4 customers are charged higher rates than B-2 customers, even though they cover the full capital and operating costs of their own power systems and provide low-loss loads to the grid.

Additionally, there's a difference in metering practices: B-1 and B-2 customers have their meters placed after the transformer, meaning utilities absorb transformer losses and maintenance costs. Conversely, B-3 and B-4 customers are metered at the high-tension terminals and are responsible for maintaining their own downstream equipment.

This inconsistency in tariff design has led to inefficiencies within the grid. Reports suggest that large industries are dividing their approved loads across multiple B-2 connections to steer clear of the higher B-3/B-4 rates. This practice creates inefficiencies, increases technical losses, and fragments billing.

To tackle these issues, PTEA recommends rationalizing the tariff to offer a minimum discount of Rs 2 per kWh for B-3 and B-4 industrial customers compared to B-2 users. They also propose incorporating factors such as voltage level and metering points into the tariff structure and introducing regulations that discourage industries from using multiple B-2 connections when a B-3/B-4 connection is feasible.

These changes would help decrease system losses, improve grid usage, promote healthy industrial expansion, and boost the financial performance of distribution companies (DISCOs), all without requiring additional subsidies, says Khurram Mukhtar, Chairman, PTEA. This adjustment will ensure a more efficient and stable energy system, benefiting both industry and the grid, he adds.

In Q1, FY25, Cambodia's textile and garments exports increased by 20 per cent, highlights Sun Mesa, Spokesperson, Ministry of Labor and Vocational Training. Total clothing, footwear, and bags exports by the country rose to 3.5 billion during the quarter.

The nation registered a detailed robust growth across markets, with exports to the United States rising by 25.7 per cent, Europe by 20.8 per cent, Japan by 19.9 per cent, the United Kingdom by 5.6 per cent, and the ASEAN region by 24 per cent.

This substantial growth was a result of rising orders from globally recognized brands such as Adidas, Nike, and others, notes Mesa. These companies value Cambodia's consistent production quality and dependable supply chain, he adds.

The growth is also an outcome of the favorable government policies launched under the leadership of Prime Minister Hun Manet, Mesa emphasizes. These policies include a range of legal and regulatory support designed to streamline factory operations, attract investors, and encourage major manufacturing facilities to relocate to Cambodia.

As a key part of the Royal Government, the Ministry of Labor has also eliminated a large number of services to make it easier for investors to complete their work and carry out their activities. This gives Cambodia a competitive edge over other countries in the garment industry, Mesa observes.

Mesa further highlights, the 7th Royal Government's early focus on labor policies have led to improved working conditions, enhanced productivity, and fostered better industrial relations in factories nationwide.

Furthermore, regional factors, including political instability and uncertainty in competing nations are contributing to international buyers shifting orders to Cambodia, he points out.

Sam Soeun, President, National Labour Union of Cambodia (NLC), states, the rising T&A exports reflect the positive state of the Cambodian economy.

The sector is currently stable with no major disruptions and job creation in the industry has steadily increased due to the continuous inflow of foreign investment, he adds. This stems from foreign investors' strong confidence in the Royal Government, which has ensured peace and political stability, Soeun affirms.

The Royal Government continues to attract investment and support the establishment of new businesses to create more jobs for the Cambodian people, he reiterates.

The International Apparel Federation (IAF) has welcomed the decision to temporarily halt a significant portion of the punitive tariffs implemented by the US on April 2, 2025 with the highest rates targeting countries heavily reliant on garment exports to the US.

The continued application of punitive tariffs on imports from China - one of the world’s largest apparel exporters - highlights the real and ongoing risk of tariff escalation for other nations. The Federation strongly urges, future trade negotiations should pursue reasonable goals and avoid punishingly high tariffs on apparel. Many apparel-exporting countries lack the domestic purchasing power to significantly increase imports from the US, making it unrealistic and unreasonable to demand steep trade balance corrections. Similarly, high tariffs will not realistically lead to a large-scale return of apparel production to the US.

The punitive tariffs implemented by the US administration can destabilize economies and jeopardize the livelihoods of countless employees and entrepreneurs in the apparel industry globally, including within the US itself, the Federation adds.

For IAF members, the harm inflicted by the creation of a climate of tariff uncertainty (and, in China's case, a punitive reality) has not been paused. With global supply chains still recovering from the COVID-19 pandemic, the Red Sea crisis, and weakened consumer confidence, the unpredictability of trade policy discourages investment and further undermines market stability and consumer confidence. Preventing the return of these harmful tariffs must be a top priority—followed by restoring a stable, predictable trade environment. Only then can we begin the critical work of re-evaluating global supply chains.

To be clear, no supply chain resilience strategy can withstand a tariff tornado of this scale. Nevertheless, moving forward, the industry should reduce its vulnerability to sudden policy shifts, opines IAF. This would require it to expand the foundation of competitiveness beyond cost alone. The IAF advocates for stronger, smarter, and more sustainable supply chains—anchored more in long-term partnerships, business sense, and mutual interdependence, and less dependent on trade political decisions.

Serving as the voice for the apparel manufacturing sector across more than 40 countries, the International Apparel Federation represents a global industry comprising hundreds of thousands of companies and millions of employees.