United States and China reach agreement to decrease retaliatory tariffs, marking significant progress in deescalation of trade dispute.
Rewritten Article:
Trade war tense between goliath economies USA and China seems to cool down as both nations agreed to a 90-day standstill on tariffs. This decision, made public on Monday, sent stock markets soaring with hopeful investors.
USA tariffs on imports from China will be cut down from a whopping 145% to a more manageable 30%. In the same vein, China's duties on US imports will be slashed from 125% to 10%. The joint statement released by both countries explained the agreement.
The high-stakes discussions between the two nations took place over the weekend in Geneva, Switzerland, which marked the first face-to-face talking on the escalating tariff issue that began after President Donald Trump's announcement of global tariffs in April.
In the past, China responded to these measures with its own retaliatory tariffs, causing a tit-for-tat escalation in a dizzying game of rivalry.
U.S Trade Representative Jamieson Greer expressed positive sentiments about the talks, commenting at a news conference that officials had "very productive discussions" and that China was eager for a deal.
Treasury Secretary Scott Bessent also chimed in, stating that the tariffs were "akin to an embargo," which neither side desired. He expressed hopes for a more balanced trade scenario between the two nations, asserting that both sides are committed to achieving this balance.
Bessent brushed off the criticism that it might have been wiser to start with negotiations before imposing the tariffs, which he argued had caused worldwide financial chaos. He emphasized that the U.S had previously striven to balance trade through the standard process but that this method failed.
The Chinese Ministry of Commerce labeled the agreement as an "important step," adding that it creates favorable conditions for narrowing disagreements and deepening cooperation. They cautioned, though, that the U.S should further follow up on the agreement and completely abandon its unilateral tariff practices.
In the immediate aftermath of the announcement, US stock markets rallied considerably. The Dow Jones Industrial Average saw a 2.1% jump, while the S&P 500 index leaped by 2.8%, and the tech-heavy Nasdaq index made a 3.8% gain.
Hong Kong's Hang Seng Index enjoyed a major surge as a result of the news, closing more than 3% higher. Mainland Chinese markets performed well before the deal's details were revealed. Markets across Asia showed enthusiasm for the potential agreement as well, with anticipation for a ceasefire between India and Pakistan adding to the optimistic atmosphere.
Despite the positive momentum, both experts Wang Wen from the Chongyang Institute for Financial Studies and Tianchen Xu from the Economist Intelligence Unit emphasized that many challenges remain unresolved. The situation, they argued, calls for the political wisdom and negotiating skills of leaders in both nations to ensure a long-lasting solution.
Additional Insights:
- The trade conflict has been years in the making, stemming from the U.S's accusations of unfair trade practices and a substantial trade deficit with China.
- The reduction in tariffs aims to support consumer confidence, inflation control, and job security while addressing trade imbalances and protecting domestic industries.
- The 90-day tariff standoff is viewed as a temporary truce, with ongoing negotiations expected to shape long-term trade relationships between the U.S and China, and their collective impact on the global market.
- The agreement between the United States and China on a 90-day standstill on tariffs has boosted the confidence of stock markets, with US indices such as the Dow Jones Industrial Average, S&P 500, and Nasdaq experiencing significant gains.
- The US trade representative, Jamieson Greer, commented that the discussions between the two nations were productive, addressing concerns about the unfair trade practices and the substantial trade deficit with China.
- The reduction in tariffs on both US and Chinese imports is intended to support consumer confidence, control inflation, and secure job opportunities while addressing trade imbalances and protecting domestic industries.
- The trade conflict between the two economic giants, USA and China, has been ongoing for years, and this 90-day tariff standoff is viewed as a temporary truce, with ongoing negotiations expected to shape the long-term trade relationships between the two nations and their collective impact on the global market. Furthermore, it is crucial for the political wisdom and negotiating skills of leaders from both nations to ensure a lasting solution to the trade issues at hand.
