Following talks in Switzerland, China and the US agreed on a temporary solution to defuse the trade war. China will reduce its tariffs on the US from 125% to 10% for 90 days. The US will reduce its tariffs on China from 145% to 30% over the same period.
US Treasury Secretary Bessent: We Had a Productive Meeting
US Treasury Secretary Scott Bessent stated that China and the US do not want to continue the trade war but rather to diverge, “We had a very robust and productive discussion on the steps to be taken on fentanyl.” The Minister also noted that a new negotiating mechanism will be established to ensure sustainable economic and trade relations between the two countries.
Significant Progress Between the Two Parties
The US and China announced “significant progress” after two days of talks in Switzerland aimed at defusing the trade war. Chinese Vice Premier He Lifeng praised the professionalism of the US, while US Trade Representative Jamieson Greer stated that trade disputes may have been exaggerated. These announcements were followed by significant fluctuations in economic markets.
Past High Tariffs and Their Impact
During US President Donald Trump's second term, US President Donald Trump imposed a 145% tariff on Chinese goods, while Beijing responded with a 125% tariff on US imports. This brought trade between the two countries to a near standstill, increasing inflationary pressures in the US and threatening China's export engine.
This new agreement could change the course of global trade and is seen as an important step towards economic stabilization.
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