The White House announced that the United States and China agreed to significantly reduce tariffs in the next 90 days after negotiations were held in Geneva. The aim is to downgrade the current trade war and allow time for negotiations between the two sides to achieve a “sustainable, long-term and mutually beneficial economic and trade relations.”
The United States will temporarily reduce its tariffs on Chinese goods from 145 to 30% (10% plus 20% of fentanyl-related taxes). Meanwhile, China will reduce its tariffs on U.S. imports from 125% to 10%. It is unclear how this will affect the price of electronic products from China entering the United States, such as smartphones, computers, cameras and drones.
The news led to a stock rally after get off work, with S&P 500 futures up 2.8% and the dollar up 0.7% against other currencies. “We want to be more balanced in trade, and I think both sides are committed to achieving that,” said U.S. Treasury Secretary Scott Bessent. “Both sides want to decouple.”
The impact of U.S. tariffs on consumer goods prices has been brought home recently, with DJI raising the price of its popular Osmo Pocket 3 Gimbal 3 Gimbal 3 Gimbal Camera from $520 to $800 in the past few months. This dramatic reduction is surprising given the rhetoric of countries and high prices. “It's better than I expected. I think the tariffs will be cut to around 50%, which is much lower.” Reuters.
