Link Securities | According to the Wall Street Journal, the United States and China announced that they had agreed to suspend most tariffs on each other’s products for a period of 90 days while trade negotiations continue. The United States announced that it would reduce its ‘reciprocal’ tariff on Chinese products from 145% to 30%. China announced that it would reduce its tariff on US products from 125% to 10%. US tariffs related to fentanyl and other measures will remain in place.
Both countries stated that they would ‘establish a mechanism to continue discussions on economic and trade relations.’ The announcement concludes two days of intense talks in Switzerland aimed at reducing trade tensions between the world’s two largest economies.
Since beginning his second term, US President Trump had imposed tariffs of 145% on Chinese products, while China had responded with tariffs of 125% on imports from the United States. This has led to bilateral trade almost grinding to a halt, increasing inflationary pressure in the United States and threatening the export engine that drives Chinese growth. On the other hand, it is worth noting that Treasury Secretary Scott Bessent told CNBC that he expects to meet with Chinese officials in the ‘coming weeks’ to ‘begin work on a more comprehensive agreement.’
