Exclusive$16 Billion: US Collects Record Custom Duties in April

Welcome to China In Focus. I'm Tiffany Meyer. Our top story. Major banks and brokerages are changing their forecast on the U.S. economy amid a truce on Washington's trade war with China. That's after the U.S. raked in over $16 billion from import tariffs last month. President Trump wants to rebalance the American economy back to a manufacturing economy. The illegal sale of drug-making machines in the U.S., that's the crime the Justice Department is charging three Chinese individuals and their company for. More on why their smuggling could prove deadly for Americans. The U.S. Embassy in China is looking into a mysterious situation. American citizens getting cheek swabbed by Chinese inspectors at Chinese airports with no official explanation. And the U.S. is slashing levies on low-value parcels from China. Details on the further de-escalation. A cooling of trade tensions between the U.S. and China. Sky-high tariffs are being rolled back. Markets are responding and economists are revising their outlooks. The shift follows an update from the U.S. Treasury, reporting that money collected by U.S. customs skyrocketed in April. The total $7.6 billion more than the month before. Likewise, total revenue from tariffs had a record $16.3 billion for the month. Looking at those numbers, the timing of the U.S.-China tariff rollback is crucial for both American businesses and Chinese manufacturers. In a major development Monday, the U.S. and China reached a temporary truce in the ongoing trade war. Both sides agreed to pause steep tariffs on each other for a 90-day window. The move is already rippling through Wall Street. Major banks and brokerages are revising their economic forecasts. J.P. Morgan is now projecting U.S. economic growth at 0.6 percent in 2025, up from its earlier estimate of 0.2 percent. The risk of a recession has also dropped to below 50 percent. Over at Goldman Sachs, the bank is slashing its U.S. recession forecast to 35 percent, down from 45 percent. It also bumped up its 2025 GDP growth outlook by half a percentage point, now predicting 1 percent growth. Barclays took it a step further, dismissing recession risks altogether. Investors are watching closely, hoping the economic optimism fuels a summer stock market rally. On Tuesday, U.S. Treasury Secretary Scott Bessen reaffirmed the Trump administration's goals for reshaping trade relations. President Trump wants to rebalance the American economy back to a manufacturing economy with high-precision manufacturing. I think everyone agrees, including Chinese leadership, that they need to rebalance towards more of a consumption and consumer economy. The surprise breakthrough in Geneva means the U.S. will lower punitive tariffs on Chinese imports to 30 percent for now. In response, China is cutting its retaliatory tariffs on U.S. goods to 10 percent. Still, not everything is rolling back. As part of a broader strategy for economic security, the U.S. is holding firm on tariffs for critical goods, aiming to boost self-sufficiency in key sectors. We had become woefully non-self-sufficient, so whether it's medicines, semiconductors, other strategic areas, so the United States will bring those industries home. Meanwhile, some relief is coming for consumers and small businesses. Tariffs on low-value packages known to previously fall under the de minimis exemption are being cut from 120 percent to 54 percent. There's also a minimum flat fee of 100 dollars per shipment. For big business, the timing of the U.S.-China trade truce couldn't be more critical, especially for U.S. holiday orders and Chinese manufacturers. May is typically when American retailers place their big year-end holiday orders, making the tariff pause a timely boost for global supply chains. The Justice Department unsealed an indictment Monday, charging three Chinese nationals and a Chinese company for their role in allegedly importing equipment used to make counterfeit drugs. It can also be used to make deadly opioids like fentanyl. A China-based company, Capsule CN, is at the heart of the issue. Its products include machines capable of making tablets and pressing medicines into capsules, as well as counterfeit dye molds. The company's principal officer and two other employees were also indicted. The DOJ accuses them of funneling illegal equipment from Chinese manufacturers to U.S. customers over the past four years, using channels like e-commerce platforms, social media accounts and other websites. Feather agencies have already seized the four internet domains they used. The Chinese nationals and the company face a total of 21 counts, ranging from smuggling to violating the Controlled Substances Act and money laundering. The DOJ underscored that the equipment smuggled into the U.S. are capable of producing millions of potentially deadly fake pills, including fentanyl. Special Agent Jason Stevens, who's in charge of the investigation, said the agency is determined to break, quote, every link of the global fentanyl supply chain. Zooming up, the case is part of a broader U.S. clampdown on crimes linked to illegal drug manufacturing and smuggling, especially tied to China. The Trump administration added a 20 percent tariff on all Chinese goods for punishing China's role in the U.S. fentanyl crisis. According to the Drug Enforcement Administration, fentanyl overdose is the leading cause of death among Americans ages 18 to 45. That's all for today's China In Focus on YouTube. You can now catch the full episode on Genjing World every Tuesday. Coming up, the U.S. slashes levies on low-value parcels from China. Plus, the U.S. embassy in China is looking into reports of American citizens getting cheek-swabbed upon their arrival at Chinese airports. To watch, simply click the link in the description box down below or search China In Focus at genjingworld.com. The Chinese regime has a new strategy as it works to hold on to its dominance over rare earth metals. It comes in light of U.S. trade talks over the weekend. Now, Beijing has decided to require licenses for American companies looking to buy rare earth from China. And the number of companies approved for them is limited. German automaker Volkswagen is one of those on the list. In a written statement to Reuters, Volkswagen said at least four rare earth magnet suppliers have obtained export licenses from Chinese regulators. It noted that its own supplier is among them. Beijing restricted U.S.-bound shipments of seven types rare earth minerals in April. The move is part of its attempt to leverage the industry after Washington imposed steep tariffs on Chinese goods. And unfortunately for the West, it's proven an effective strategy. China processes about 90 percent of global rare earth minerals. The U.S. defense industry especially needs rare earth minerals for weapons production. They're also used on a wide range of other high-tech devices. A rare move by China is setting off alarms in the West. Bloomberg recently reported that some American citizens flying into Chinese airports have been subjected to invasive medical testing before entering China's customs. The news was also confirmed by the U.S. embassy in Beijing. Officials there said they're looking into the matter. Zooming in on one case, here's what a U.S. citizen who wished to stay anonymous told Bloomberg. On May 2nd, after landing at Shanghai's Pudong International Airport, a Chinese inspector scraped their tongues multiple times with a swab. They said all non-Chinese passport holders on the flight were required to do this before they could go through customs. They also said the Chinese inspector wouldn't tell them why. Since last year, some Chinese internet users also claimed they were forced to take such tests. They speculated Chinese officials were testing for viruses like the flu, COVID-19 and monkeypox. Something to note, NTD previously reported on social media posts from Chinese nationals alleging respiratory diseases were on the rise. Many parts of China also held recent medical drills. Those exercises practiced how to respond in case of a bird flu outbreak in humans. The news has been largely absent from China's state-run media coverage. More de-escalation in the U.S.-China trade war. The White House said late Monday that the U.S. would slash tariffs on goods valued under $800. Here are the details. A day after news of the U.S.-China agreement on trade, there were signs of further steps being taken. Speaking in Saudi Arabia on Tuesday, Treasury Secretary Scott Besant said the agreement had created a mechanism to avoid escalation. He said the U.S. did not want to see a general decoupling of the two countries' economies. What we want is the U.S. is going to decouple in strategic industries, which we saw during COVID, we had become woefully non-self-sufficient. The new agreement set a 90-day pause under which most of the levies recently imposed would be drastically reduced. Among concrete steps, Washington said late Monday it would slash the levies imposed on so-called de minimis shipments, low-value packages that used to The U.S. had hiked tariffs on the parcels to 120%, but will now bring them back down to 54%. That's likely to be a boost for online giants like Timu and Shein, which have built their rapid growth on the de minimis provision. However, a minimum flat fee of $100 will remain in place. Excitement over the trade deal initially lifted global stocks on Tuesday, but some of the optimism later waned, with equities in Shanghai closing broadly flat. Economists pointed out that the agreement still leaves average tariffs significantly higher than they were before the turmoil began. President Trump has said China would fully open its market to American businesses following trade negotiations. What would that look like, and how would it impact U.S. companies? NTD's Melina Weisskopf spoke to Thomas Gusterberg, senior fellow at the Hudson Institute, for insight. Alright, Thomas, thank you for joining the show tonight. So, let's first talk about tariffs. President Trump says that China will open itself up to U.S. goods. Let's together listen to a clip from the president speaking about his efforts here. Because if you think about it, we opened up our country to China. They come, we don't, I mean, they have very few restrictions, and they didn't open their country to us. Never made sense to me. It's not fair. And they've agreed to open China, fully open China. And I think it's going to be fantastic for China. I think it's going to be fantastic for us. Thomas, can you explain for us what Trump is describing here? What would it look like to fully open up China, and what would it mean for American businesses? Well, I certainly hope the president is right. But we've been trying this for about 30 years. And China, when it joined the World Trade Organization about 25 years ago, said that it was going to be fully open. But it never was, and it isn't now. China uses a variety of mechanisms to keep American companies, and not just American companies, from prospering in the Chinese market. Most of these are not tariff related, but some of them are. They just don't make it easy for companies to operate there. And so by the time they let American companies in, China has already mastered the technology or the cost effectiveness of their competitive goods. And so it's been impossible to really prosper in the Chinese market. So hopefully, this agreement is real, but it's going to take a lot of change in the Chinese economy and their attitude towards outside competitors for this really to be an effective mechanism. Let's listen together at what the director of the White House's Economic Council, Kevin Hassett, had to say about this. We actually have a fresh start with China. That's the way to think about these negotiations, that we've come in with these reciprocal tariffs. We've described the non-tariff barriers and tariffs that disadvantage American workers, and folks are coming to the table. And it's really stunning how quickly they're moving and how dramatic the changes are. How long could this process take until we officially see this impact play out here at home? It could take a while because China has made these promises before. And in order for these more effective participation in the Chinese market, like Kevin has indicated here, it's going to take major changes in the way the Chinese economy works. They are an export-oriented economy. They overproduce goods like they produce enough cars to export 50 percent of them, which is about 10 million a year, to outside buyers like in the United States. They did the same thing with solar tariffs, with windmills, with steel. So they have to be willing to not only accept American companies and American exports, but they have to be willing to ratchet back their company's production capacity because the world just can't absorb everything that China produces. And the growth model that the Chinese have depends heavily on exports. So they're going to have to figure out a way to keep their economy prosperous and growing without relying on exports. And that's going to take some time. Now, Thomas, one tariff that the U.S. imposed on China was 20 percent across the board. This is over the regime's role in the fentanyl crisis. Let's listen to what Trump said about the issue. I'd like to go back to China just for a second. They're very heavy on the fentanyl. We're charging them, as you know, 20 percent for the fact that they send fentanyl into our country. And they've agreed that they're going to stop that. And, you know, they'll be rewarded by not having to pay, you know, hundreds of billions of dollars in tariffs. Thomas, what kind of standard do you think that U.S. officials should use to measure whether China is taking any action to stop the fentanyl crisis here in the U.S.? Well, we can probably measure somewhat effectively how much fentanyl is coming into the country. Unfortunately, one of the measures is how many people are dying in this country. But China's involvement in producing fentanyl or producing the products that they send to Mexico to be turned into fentanyl is a major one. But it's not the only way they participate in that market. With illicit drugs, you generate a huge amount of cash. And in order to put that cash to work in U.S. dollars and get it back to China, you have to engage in money laundering. And the Chinese banks are complicit in that. And it's not just to the United States. They handle the money laundering for the drug trade pretty much throughout the world. So we're going to have to be vigilant and watch the activities in banks with cash transactions. And we're probably going to have to make sure that all of that cash that they're producing, not only in the United States, but in Europe and other advanced countries, how that gets back to China. And if they're not cutting off that money laundering, then we know that they're still complicit in the fentanyl trade. So those are really major questions that have to be answered. Great, Thomas. Thank you so much for your insights and breaking all this down for us today. It's great to have you on the show. Okay. Thank you, Melina, for having me. Coming up, China is investing $9 billion to expand its influence within Latin America, intensifying competition with the U.S. in the region. And Falun Gong practitioners around the world gather in celebration of World Falun Dafa Day. We took a look at some worldwide events and what the day means to them. That story and more after the break here on China In Focus. I've been very impressed by the way practitioners live out the values of truthfulness, compassion and forbearance. Welcome back to China In Focus. I'm Tiffany Meyer. China is rolling out a $9 billion loan, doubling down on its infrastructure investments in Latin America. It's part of Beijing's push to challenge the U.S. as Latin America's key development partner. On Tuesday, Brazil's president met with Chinese leader Xi Jinping. They signed deals to cooperate on agriculture and nuclear energy. Xi told leaders from Brazil and Colombia that China wants to import more goods from the region and increase its investments there. This move is part of a bigger strategy. China is trying to grow its influence in the region, in part because seven countries there out of just 12 worldwide still have formal ties with Taiwan. Beijing views the island as part of China, even though the communist regime has never ruled Taiwan. By strengthening relationships in Latin America, China hopes to shift the remaining countries away from Taiwan. The Latin American investment is happening through China's Belt and Road Initiative. The foreign infrastructure plan offers funding for critical projects to other countries. But it's drawn major criticism. That's because when countries can't repay their Chinese loans, Beijing takes control of the infrastructure that was built. And they often provide strategic or military benefits. Looking to other nations, Brazil remains open to working with China, but has urged the region not to rely too much on outside funding. In the Caribbean, Haiti and St. Lucia are among the countries that still recognize Taiwan. Both have stated they won't renew their Belt and Road agreements with China when they expire in a few years. Today marks a special anniversary of a peaceful meditation practice that embodies beauty, tradition, faith and resilience. May 13th is International Falun Dafa Day. This year, the day honors 33 years since the mind-body system was first made public. The event is celebrated worldwide as an opportunity to share Falun Dafa's guiding principles, truthfulness, compassion and forbearance. Here's a look at some of the parades and events held across the U.S. and around the globe. Practitioners of Falun Dafa, also known as Falun Gong, in the UK, Germany, Australia and many others held public celebrations for World Falun Dafa Day. The exercise movements are peaceful, kind and soothing, very balanced. It's a good exercise for both mind and soul. For me, it's important to hold activities like this. People need peace and tolerance. This exercise system could help them in that regard. I've been very impressed by the way practitioners live out the values of truthfulness, compassion and forbearance, particularly given the really severe pressure and persecution that they face in China. Last week, thousands of people paraded through the streets of Manhattan in New York City. Vibrant floats, dragon dances, exercise demonstrations and marching bands lit up 42nd Street, despite the rain. Falun Dafa taught me the concept of looking inside myself to improve myself. And this looking inside and measuring myself with the principles of truthfulness, compassion and tolerance has really helped me to improve as a person. My growth has been exponential. It has been amazing. Falun Dafa originated in China back in 1992. The mind and body practice includes both slow meditative exercises and three guiding principles aimed at improving one's morality. Those are truthfulness, compassion and forbearance. The system became widely popular across China, with many touting improved health and mental well-being. But in 1999, the Chinese Communist Party launched a campaign to eliminate the practice. In the more than two decades that have followed, those who refuse to give up their faith have been imprisoned, tortured and even killed. Despite the persecution, which continues today, Falun Dafa has spread to millions around the world. And practitioners continue to persevere and raise awareness in the face of adversity. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at ChinaInFocus and td.com. We'd love to hear from you. For on the clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you tomorrow.