The US has announced it is slashing the tariffs on small parcels shipped from Hong Kong and mainland China amid a de-escalation of a trade war between the world's two biggest economies.

The president said reducing tariffs to 80 percent from the current 145 percent “sounds right,” as U.S. and Chinese negotiators prepare to meet in Switzerland.

The dust has yet to settle in Trump’s tariff wars, but for Mainland Headwear, the upheaval of recent weeks has forced it to re-examine its operations, shift production between its overseas factories and reconsider plans to set up in new locations.

President Donald Trump has slashed the tariff on small parcels sent to the United States from mainland China and Hong Kong, after the impasse was broken in the two countries’ trade war following talks over the weekend.

As the U.S. and China negotiate a trade deal, Trump has lowered a levy on “de minimis” low-value packages, such as online shopping from Shein or Temu.

U.S. President Donald Trump has said he would raise the case of jailed Hong Kong activist and former media tycoon Jimmy Lai as "part of the negotiation" with China over trade and tariffs, a move that could further stoke tensions with Beijing.

It has been over a decade since some Hong Kong manufacturers, responding to the mainland’s sweeping industrial upgrade and sensing rising US-China trade tensions, moved to set up factories overseas. Being nimble paid off,

Lai is the founder of DIY Watch Club, which sells do-it-yourself watchmaking kits to the overseas market, with over 80% of his shipments going to the United States. Starting from May 2, low-value packages from China and Hong Kong have been subject to a 90% tariff or a flat fee of $75, part of a punishing trade war between Washington and Beijing.

The cycle of tit-for-tat tariffs between the U.S. and China has brought uncertainty to Hong Kong businesses reliant on the American market, which don't know what level tariffs will be at in three months' time.

The president has backtracked repeatedly on his tariff policies, creating a whiplash with downsides and few clear benefits so far.