Trade War De-Escalation: US, China Agree To Temporarily Slash Tariffs
Geneva: Following the recent trade talks, the United States and China agreed to temporarily slash tariffs on each other’s goods for an initial 90-day period. The announcement was made in a joint statement by the Washington and Beijing, news agency Reuters reports, to de-escalate a trade war that has kept the global markets on edge.
After talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent also confirmed that both countries have decided to significantly reduce existing tariff rates, wherein the reciprocal tariffs would come down by 115 per cent.
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Through this move, the US had agreed to reduce tariffs on Chinese imports to 30 percent from 145 percent, and China has agreed to decrease its tariffs on American products to 10 per cent from 125 percent to 10 percent.
The trade war has already struck both the economies. Meanwhile, as per the reports, the trade conflicts between the two countries had began to prove beneficial to India as US buyers started shifting towards Indian suppliers following the imposition of hefty tariffs by the US on Chinese goods.
Following this development, the dollar rose against major currencies and markets lifted which helped to alleviate the concerns rose after the escalation in the trade war which resulted in an immediate sink in trade.
China’s commerce ministry stated that both parties agreed to implement measures by May 14. Adding further, Ministry affirmed its motive to halt or eliminate non-tariff countermeasures against the US that were implemented since April 2.
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As per the reports, the stock markets responded positively to the news of the trade deal, with S&P 500 futures gaining between 1.1% and 1.4%.
Even though there’s a trade truce in line, some hardline trade opponents in Washington of China’s trade practices in Washington aren’t satisfied, Bloomberg reports. They raised concerns because the agreement doesn’t include firm commitments from China on issues like intellectual property rights and to stop the flow of fentanyl.
