U.S. and Chinese officials said Monday they had reached a deal to remove most of the recent tariffs and convened a 90-day truce in the trade war to hold more negotiations on resolving the trade dispute.
Stock markets have risen sharply, and two major global economic forces have taken a step back from the conflict that is unstable global economy.
U.S. Trade Representative Jamieson Greer said the U.S. agreed to lower its 145% tariff on Chinese goods to 115 percentage points to 30%, while China agreed to lower its interest rate on U.S. goods to the same 10%.
Greer and Finance Minister Scott Bessent announced a tariff reduction at a press conference in Geneva. Bessent said at a press conference after two days of talks that high tariff levels would constitute a complete blockage of goods on both sides, with neither side as a result.
“The consensus between the two delegations this weekend is not expected to be a coupling,” Bescent said.
China's Ministry of Commerce said the agreement was an important step in resolving the differences between the two countries and said it laid the foundation for further cooperation. The ministry said it hopes the U.S. will stop “the wrong practice of unilateral tariff hiking.”
Front burner23:28Where will Trump go next in the trade war?
Top economic officials from the United States and China met in Geneva, Switzerland over the weekend. This is their first time since the start of the huge trade war. The United States has signed 145% tariffs on China. China's response rate is 125%. These taxes have basically stopped operations between the world's two largest economies. Daniel Desrochers is an international trade journalist at Politico. Here he is pursuing the latest developments in the global trade war. For the transcript of the front burner, visit: https://www.cbc.ca/radio/frontburner/transscripts
The market responds positively
The full impact of Washington and Beijing on complex tariffs and other trade penalties is unclear. Much depends on whether they will find a way to bridge the long-term difference during the 90-day suspension.
But investors are pleased as trade envoys of the world’s two largest economies blinked and found ways to go from potential massive damage to world trade and its own markets.
Futures for the S&P 500 rose 2.6%, while the Dow Jones industrial average rose 2%. Oil prices soared by $1.60 a barrel above $1.60, while the dollar received the dollar against the euro and yen.
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If you ever owned an iPhone, iPad, or Mac, you may have noticed the words printed on the back: “Designed by Apple in California. Assembled in China.” However, there is a bigger story behind this simple sign. Financial Times reporter Patrick McGee told Piya Chattopadhyay that few people know how interested China and Apple are. His new book Apple explores what we know as crucial to the world, from tariffs to new challenges with tensions with Taiwan.
Jens Eskelund, president of the European Union Chamber of Commerce in China, welcomed the news but expressed caution. He said in a statement that the tariffs were suspended for only 90 days and there was great uncertainty about what would happen in the future.
“Businesses need predictability to keep functioning and make investment decisions. So the Chamber wants the parties to continue dialogue to resolve differences and avoid measures to undermine global trade and cause collateral damage to those captured in the firefight,” Eskelund said.
Trump raised U.S. tariffs on China to 145% last month, and China hit U.S. imports by levying 125%. The high tariffs are basically two countries boycotting each other's products, destroying more than $660 billion in trade last year.
The Trump administration has imposed tariffs on countries around the world, but the fight with China is the most intense. Trump's import tax on goods from China includes 20% charges aimed at putting pressure on Beijing to prevent the flow of synthetic opioid fentanyl into the United States. The remaining 125% involve disputes dating back to Trump’s first term and imposing tariffs on China at the time, meaning that the total tariffs on certain Chinese goods could be more than 145%.
