{"id":3789,"date":"2025-05-12T11:57:59","date_gmt":"2025-05-12T15:57:59","guid":{"rendered":"https:\/\/www.viewworld.org\/?p=3789"},"modified":"2025-05-12T11:58:00","modified_gmt":"2025-05-12T15:58:00","slug":"us-and-china-reach-a-deal-to-slash-sky-high-tariffs-for-now-with-a-90-day-pause","status":"publish","type":"post","link":"https:\/\/www.viewworld.org\/?p=3789","title":{"rendered":"US and China reach a deal to slash sky-high tariffs for now, with a 90-day pause"},"content":{"rendered":"\n

GENEVA (AP) \u2014 The United States and China<\/a> agreed Monday to slash their massive recent tariffs<\/a>, restarting stalled trade between the world\u2019s two biggest economies and setting off a rally in global financial markets<\/a>.<\/p>\n\n\n\n

But the de-escalation in President Donald Trump\u2019s trade wars<\/a> did nothing to resolve underlying differences between Beijing and Washington. The deal lasts 90 days, creating time for U.S. and Chinese negotiators to reach a more substantive agreement. But the pause also leaves tariffs higher than before Trump started ramping them up<\/a> last month. And businesses and investors must contend with uncertainty about whether the truce will last.<\/p>\n\n\n\n

U.S. Trade Representative Jamieson Greer<\/a> said the U.S. agreed to drop the 145% tax Trump imposed last month to 30%. China agreed to lower its tariff rate on U.S. goods to 10% from 125%.<\/p>\n\n\n\n

A deal averts a total blockade<\/h2>\n\n\n\n

Greer and Treasury Secretary Scott Bessent<\/a> announced the tariff reductions at a news conference in Geneva.<\/p>\n\n\n\n

The officials struck a positive tone as they said the two sides had set up consultations to continue discussing their trade issues. Bessent said that the triple-digit tariffs the two countries imposed on each other last month \u2014 in an escalation of tensions Trump started \u2014 amounted to \u201cthe equivalent of an embargo, and neither side wants that. We do want trade.\u2019’<\/p>\n\n\n\n

The delegations<\/a>, escorted around town and guarded by scores of Swiss police, met for at least a dozen hours on both days of the weekend at a sunbaked 18th-century villa that serves as the official residence of the Swiss ambassador to the United Nations in Geneva.<\/p>\n\n\n\n

At times, the delegation leaders broke away from their staffs and settled into sofas on the villa\u2019s patios overlooking Lake Geneva, helping deepen personal ties in the effort to reach a much-sought deal.<\/p>\n\n\n\n

Finally, a deal<\/h2>\n\n\n\n

The 30% levy that America is now imposing on Chinese goods includes an existing 20% tariff intended to pressure China into doing more to prevent the the synthetic opioid fentanyl<\/a> from entering the United States. It also includes the same 10% \u201cbaseline\u2019\u2019 tariff Trump has slapped on imports from most of the world\u2019s countries. The 30% tax comes on top of other levies on China, including some left over from Trump\u2019s first term and kept by former President Joe Biden.<\/p>\n\n\n\n

Trump had ratcheted the combined tariff to 145% last month, furious that China was retaliating, before backing down Monday.<\/p>\n\n\n\n

China\u2019s Commerce Ministry called the agreement an important step for the resolution of the two countries\u2019 differences and said it lays the foundation for further cooperation.<\/p>\n\n\n\n

\u201cThis initiative aligns with the expectations of producers and consumers in both countries and serves the interests of both nations as well as the common interests of the world,\u201d a ministry statement said.<\/p>\n\n\n\n

China hopes the U.S. will stop \u201cthe erroneous practice of unilateral tariff hikes\u201d and work with China to safeguard the development of economic and trade relations, injecting more certainty and stability into the global economy, the ministry said.<\/p>\n\n\n\n

The joint statement by the two countries said China also agreed to suspend or remove other measures it has taken since April 2 in response to the U.S. tariffs. China has increased export controls on rare earths, including some critical to the defense industry, and added more American companies to its export control and unreliable entity lists, restricting their business with and in China.<\/p>\n\n\n\n

Markets rally as two sides de-escalate<\/h2>\n\n\n\n

The full impact on the complicated tariffs and other trade penalties enacted by Washington and Beijing remains unclear. And much depends on whether they will find ways to bridge longstanding differences during the 90-day suspension.<\/p>\n\n\n\n

Bessent said in an interview with CNBC that U.S. and Chinese officials will meet again in a few weeks.<\/p>\n\n\n\n

But investors rejoiced<\/a> as trade envoys from the world\u2019s two biggest economies blinked.<\/p>\n\n\n\n

Futures for the S&P 500 jumped 2.6% and the Dow Jones Industrial Average was up 2%. Oil prices surged more than $1.60 a barrel, and the dollar gained against the euro and the Japanese yen.<\/p>\n\n\n\n

\u201cThis is a substantial de-escalation,\u201d said Mark Williams, chief Asia economist at Capital Economics. But he warned \u201cthere is no guarantee that the 90-day truce will give way to a lasting ceasefire.\u201d<\/p>\n\n\n\n

Dani Rodrik, an economist at Harvard University, said that the two countries had stepped back \u201cfrom a needless trade war\u2019\u2019 but that U.S. tariffs on China remain high at 30% \u201cand will mainly hurt U.S. consumers.\u2019\u2019<\/p>\n\n\n\n

\u201cTrump has obtained absolutely nothing from China for all the chaos he generated. Zilch,\u2019\u2019 Rodrik wrote, posting on Bluesky.<\/p>\n\n\n\n

Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies, said the speed at which the agreement came about suggested that \u201cboth sides were more economically boxed in than they let on.\u201d<\/p>\n\n\n\n

\u201cFor China, the economic pain was real: Rising unemployment, capital flight, and export orders falling at their fastest rate in nearly two years,\u201d Singleton said. \u201cFor Trump, markets mattered, and this deal gives him a win without abandoning leverage.\u201d<\/p>\n\n\n\n

The announcement by the U.S. and China sent shares surging, with U.S. futures jumping more than 2%. Hong Kong\u2019s Hang Seng index surged nearly 3%, and benchmarks in Germany and France were both up 0.7%<\/p>\n\n\n\n

\u201cThe drop from sky-high to merely high tariffs, along with the uncertainty about the path of future tariffs, will still serve as a constraint on trade and investment flows between the two economies,\u201d said Eswar Prasad, professor of trade policy at Cornell University.<\/p>\n\n\n\n

\u201cNevertheless, it is a positive omen for the world economy that U.S. tariffs might eventually end up as significant trade barriers but not unsurmountable walls,\u2019\u2019 he said.<\/p>\n\n\n\n

Jay Foreman \u2014 CEO of Basic Fun, the Florida-based company behind such toys as Care Bears and Tonka trucks \u2014 said he was relieved to see the tariff rate on Chinese goods now down to 30%. But he wants that to drop to 10%.<\/p>\n\n\n\n

Foreman said he\u2019d just advised his team in China to release its toy shipments, which had been paused since early April. Before Monday\u2019s deal, he said, he thought he\u2019d have to double prices \u2014 but they\u2019ll still go up, by 10% to 15% for the third and fourth quarters.<\/p>\n\n\n\n

\u201cIt\u2019s like they tried to feed us a rotten egg sandwich and hope we\u2019re happy to drink spoiled milk instead,\u201d Foreman said.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

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