Escalating trade conflict: Trump reveals agreement with China
In a swift turn of events, President Donny T took to his digital pulpit Truth Social to announce a new trade deal between the U.S. and China—a dance long in the making.
"Alright, listen up, folks!" he tweeted. "Our deal with China's in the bag, and it's just waiting for the final sign-off by yours truly and Xi Jinping. Relations are goin' great! You gotta pay attention to this!"
In his post, ole' Donny T revealed the U.S.'s intention to cut the tariffs on Chinese goods down to 55%, while China would knock theirs on American products to a breezy 10%. But that's not all—the U.S. is welcome to let Chinese students back into its beloved universities.
This agreement also has China agreeing to lift the hard restrictions on exporting rare earth metals and magnets, a move that might just get the engines of American manufacturing revved up.
Back in the day, way back in Feb 2018, Trump started this bitter trade feud by slapping a 10% tariff on goods imported from China. By March, it rose to 20%, and China struck back with tariffs on American ag products. As things escalated, the U.S. slapped on "reciprocal" tariffs, causing China's to soar up to an eye-watering 145%, with a whopping 125% tariff for U.S. suppliers in China.
But as May rolled around, high-level talks happened in Geneva between the U.S. and China. According to Donny T, this led to a "complete reset" of the relationship. Interested in learning more about the details behind this "reset"? Check out our report on the U.S. and China Truce.
Now, with all the drama of a Western soap opera, it seems that Donny T tried to show China his steel-toed boots, but they just twitched their noses and counted them neatly. China's statistics suggest exports to the U.S. have dipped, while shipments to Southeast Asian countries have been on the rise—an undeniable move to the gray market via third countries, like Thailand. The situation with American exporters to China is similar, with agricultural products being sent to the Land of Smiles. Only manufacturers of numbered goods, like aircraft and automobiles, have felt the real sting of this trade war so far.
Don't forget that there's still the little matter of Boeing to sort out, though Beijing seems confident they can manage that issue. The tariff ratio now stands at a somewhat lopsided 115:95 in China's favor.
It seems like the Trump team thought China would beg for talks once the tariffs were raised, but Xi didn't pick up the phone for a whole four months. He made Donny T wait until the U.S. team stepped up to ask for a chat.
Here's a little insight: Since January 2019, China's exports declined by 16.6%, while the U.S. has endured a slide of 14%. Yet, the world remains afloat despite this turbulent sea of tariffs.
Get ready for more twists and turns, folks, as this tale of trade has scarcely begun.
"President Donny T's announcements on Truth Social often cover a mixture of politics and general-news, and his latest post revealed details about a new trade deal with China. The U.S. has agreed to cut tariffs on Chinese goods to 55%, while China will reduce their tariffs on American products to 10%."
"This trade deal also includes China agreeing to lift restrictions on exporting rare earth metals and magnets, which could potentially revive American manufacturing. However, China has reportedly been shifting exports to Southeast Asian countries instead, suggesting a move towards the gray market via third countries."
