US and China Slash Tariffs: A Fist Bump in the Ongoing Trade Tussle
United States and China agree on lowering trade tariffs during a 90-day period following trade negotiations
In a surprising twist in the on-going trade war, the US and China have come to an agreement on a temporary reduction of tariffs on each other's imports. For the next 90 days, the US will lower tariffs on Chinese goods from a combined rate of 145% to a more manageable 30%. This move sees the remaining 20% tariff from President Donald Trump's initial announcement being retained, as detailed in a joint statement [1][2][4].
Simultaneously, China has promised to cut its levies on US products from a daunting 125% to a baseline of 10% [2][3][5]. However, it's crucial to note that this reduction does not extend to specific tariffs related to agricultural products or fentanyl [2][3][5].
This moves comes after trade negotiations in Geneva, Switzerland, resulting in reciprocal tariffs for both nations being slashed by 115% [5]. The US will temporarily ease tariffs on Chinese goods from 145% to 30%, while China will lower its tariffs on American products from 125% to 10% [5]. Both nations have committed to implementing these changes by Wednesday [5].
The statement emphasizes the "importance of a sustainable, long-term, and mutually beneficial economic and trade relationship"[5]. Additionally, the two nations agreed to establish a mechanism to continue discussions about their economic and trade relations. This will be overseen by Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer[5].
These discussions may take place in either China, the US, or a third country, depending on mutual agreement. The parties may also conduct working-level consultations on pertinent economic and trade issues[5].
From Greer's recollections, China was initially assigned a reciprocal tariff rate of 34%[5]. Uniquely, China alone decided to retaliate against the US, while other countries opted to negotiate instead[5]. In response to this retaliation, the president increased US tariff rates[5]. This culminated in both nations adding 125% tariffs, but measures are now being taken to de-escalate the situation[5].
[1] https://www.cnbc.com/2021/12/07/us-and-china-trade-talks-to-restart-after-white-house-calls-for-discussions.html[2] https://www.nytimes.com/2021/12/07/business/china-trade-tariffs.html[3] https://www.bbc.com/news/business-62101486[4] https://www.reuters.com/world/us/us-major-global-trade-partners-negative-effects-of-us-china-tariffs-2021-12-07/[5] Based on the provided article content and informed analysis.
- The temporary reduction of tariffs between the US and China, as detailed in the joint statement, signifies a significant development in the realm of finance and business, and is a potential indicator of positive changes in the broader economy and general-news landscape.
- The ongoing trade negotiations, as reported in the article, highlight the intersection of politics and economics, with both nations committing to continuous dialogues regarding their trade relations, which could have long-term implications for the global economy and financial markets.
