Trade tussle halt: Trump pauses U.S.-China trade battle for now
Trade War De-escalation: A Tariff Tumble and Temporary Truce
The ongoing trade war between the United States and China has taken a significant turn with a recent truce. This truce is not a complete peace, but rather a 90-day temporary suspension of the most drastic tariffs imposed earlier in 2025, leaving a reduced tariff rate in place.
You might wonder, why is this pause worth noting? Well, because China is the United States' largest goods importer, and these tariffs have been suffocatingly high. In fact, the White House had slapped on tariffs surpassing 100%, essentially acting like a total embargo on goods coming from its primary trading partner. This could have sparked monumental economic chaos, not just for the US, but worldwide - remember, these are the world's largest and second-largest economies we're talking about.
So, the truce announced by Treasury Secretary Scott Bessent on Monday is nothing short of momentous news.
China will still bear an extra 30% tariff, consisting of the 20% penalty for China's involvement in fentanyl imports and the 10% "floor" set on "Liberation Day". However, the rest of the higher tariffs will be put on hold for 90 days. In response, China has held off on its retaliatory tariffs on the US. Wall Street has reacted as anticipated, with stock prices upticking in relief. But the question remains, is the trade war now over?
It seems like a straightforward question, but it's actually far more intricate than it appears.
For instance, even if we assume this is a permanent truce instead of a momentary ceasefire, the tariffs would still be signifcantly higher than they were last year. Moreover, China faces higher tariffs than most other countries. Add up the existing and Trump-era tariffs, and China faces average tariffs of approximately 40%, while the average for other countries hovers between 8% and 14% according to Capital Economics. This means the US is still implementing an economic policy aimed at boosting the cost of doing business with China, albeit avoiding an outright embargo. The recently signed trade agreement with the UK, which features clauses meant to encourage raising trade barriers against China for reasons of "security," only lends credence to this assumption. The trade war may have cooled down, but it hasn't entirely subsided.
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On the broader spectrum, the impact of the trade rollercoaster of the past few months is unlikely to vanish completely. Companies remain anxious about investing in new factories and expansions due to such unpredictable economic instability. It remains uncertain whether the White House will flip-flop again. However, it's hard not to see the US president as having blinked in this trade war. Given the potential looming recession, he has pulled back from the scariest and most harmful tariffs earlier and to a greater extent than anticipated by many.
- The temporary truce in the trade war between the United States and China, while not an outright peace, signals a potential shift in politics and policy-and-legislation, particularly within the context of general-news and war-and-conflicts.
- The recent US-UK trade deal, predicated on clauses that encourage raising trade barriers against China, underscores the ongoing escalation in crime-and-justice and could prove detrimental to future war-and-conflicts and war-and-conflicts' policy-and-legislation.
- As war-and-conflicts and policies unfold, staying informed through up-to-date general-news, policy-and-legislation analyses, and expert insights, such as through breaking news articles, is crucial for making informed choices and navigating the complexities of the modern world.
