China and the United States have just seal a 90 -day truce in the commercial war, which reduces tensions between the two superpowers of the planet. After the high -level meeting held this weekend in Geneva (Switzerland), Washington and Beijing have decided to cut the mutual tariffs that had been imposed.
The United States will reduce tariffs on Chinese products from 145% to 30%, while China will do it on imports of American products from 125% to 10%, according to the joint declaration signed by both parties, published on Monday, and collected by the Chinese state media and disseminated by the White House.
In the text, both countries “recognize the importance of bilateral economic and commercial relations for both countries and for the world economy” and call to continue consultations. The document also includes the commitment to create a mechanism aimed at monitoring economic and commercial dialogue.
The reduction supposes, in practice, that the United States will apply a partial moratorium to China. Then, after the enormous pressure of the markets and the effects of Trump’s aggressive economic policies on public debt, in addition to criticism within the Republican Party itself, businessmen and investors, Trump also suspended for 90 days the badly called “reciprocal” tariffs. From that truce he left China out, which he punished for retaliation ,. To the rest of the countries, they left a universal tax to the products imported from 10%.
The lien to the People’s Republic will remain, therefore, in 30%, since the United States reduces the 10% tariff bundle (as for other countries), to which another 20% of the tariffs that Trump decreed against China prior to its alleged link with the illicit traffic of fentanyl must be added.
The agreement is approaching, although not quite, to one of the demands that China asked to establish an eventual dialogue on equal footing: before negotiating anything, the United States had to withdraw the tariffs. The Chinese part has spoken in any case in a positive way of the meeting in Geneva, the first high level between officials in the United States and China since Trump, just installed in the White House, launched in February the first savings of its commercial war.
The conversations “were sincere, deep and constructive,” he said in an appearance from Geneva, on Sunday night, the head of the Chinese delegation, the viceprimer minister He Lifeng. He, considered China’s economic and commercial tsar, in addition to a man of absolute confidence of the president, Xi Jinping, said that the two days of closed door meetings, held at the US embassy in Switzerland, have been “an important step towards the solution of the differences through dialogue and consultation on equal terms”.
Scott Besent, secretary of the US Treasury, and one of those sent by Trump to negotiate in Switzerland, said Monday, after announcing the agreement, that both countries “represent their national interests very well” during the meeting. “We have concluded together that we both have interest in a balanced trade, the United States will continue to advance in that direction,” he said at a press conference in Geneva. “The consensus is that neither of the two delegations is interested in rupture.”
In an interview with MSNBC, Besent was more hardest Monday with his counterpart: “There is something they call the shock Chinese, and in our case our manufacturing sector has massacred. We are not for a total disconnection, but partial: in the pandemic we realized that the supply chains that seemed effective are not safe. ”
A long fight
Besent had already anticipated on Sunday that the conversations had been “productive” and that they had achieved “substantial progress” in a commercial relationship that had become unsustainable. On Saturday, Trump advanced in a message on his social network, Truth, that his people had reached “many agreements” in Switzerland.
Before going to Geneva, Trump, also in Truth, opened to the possibility of leaving tariffs on his rival by 80%, still too high, while Besent had alerted that the level of taxes between one and another country was equivalent to a “embargo” in fact in one of the most intense commercial relations on the planet, whose value last year was 660,000 million dollars (about 533 billion euros). It is a balance, with everything, unbalanced: China sells three times more to the United States than the other way around.
The fight began shortly from Trump to the White House. First, all Chinese goods imposed in February. In March, he rose to 20%, by virtue of the Fentanyl tariff, which also fell to Mexico and Canada, countries to which Washington guilt of the public health crisis caused by the powerful opioid. On April 2, the day he distributed in a pompous act to dozens of commercial partners, Trump added 34% to that 20%. In the following days, the United States was uploading its commitment as in a poker game until leaving tariffs in a historic 145%, an amount that was equivalent to the declaration of an unprecedented commercial war. Subsequently, exceptions for certain technological products, such as mobiles, computers or chips, which largely arrive from the Asian giant.
During the exchange of blows, and said he would not take into account new increases in Washington, considering that Toma and Daca had become a game of numbers with many ballots to “become the laughing of the history of the world economy,” said a Chinese trade spokesman.
The tariffs had begun to feel in recent weeks in the form of shipping reduction, pause production lines and supply chain chain plans. Chinese exports to the United States fell 21% in April, according to official Chinese government data published on Friday; A minor drop in expected, given the circumstances, although relevant.
Before the brutal escalation of taxes to the April trade, in the previous month the EFFECT TRUMP Between both countries. The imports of the United States from China fell to March to 29.4 billion, its lowest level since March 2020, in full pandemic ,. And that Chinese products were only subjected that month to the additional tariff of 20% decreed by Donald Trump with fentanyl as an excuse. It was also in March when additional 25% tariffs entered into force to aluminum and steel purchases.
In its last forecasts, expected by 2025 in 0.5 points; The reduction was 0.9 points for the United States and 0.6 for China. With the bags touched and the financial forecasts in free fall, numerous voices have been raising the pressure to end the contest between the global colossi.
The consensus achieved last weekend creates a space in which both powers may feel comfortable to maintain a future commercial dialogue in depth. In 2018, after the first tariff war unleashed by Trump, Washington and Beijing, they ended the disputes with the signing of a large commercial agreement.
The inevitable question is how Trump’s economic team will take advantage of that respite, which has postponed for 90 days of other commercial pacts, and what will happen if, when on August 10 the deadline that both powers have occurred, the positions remain irremediably remotely remote. Six weeks are going to be completed since Washington announced its mass imposition of tariffs, and for the moment the White House has only been able to sell one conquest: a commercial agreement,
Some analysts advanced these days that an approach in Geneva could also open the door to the expected called between the two top leaders. , three days before the investiture of the tycoon. “Reducing tariffs at the same pace that Washington would indicate that Beijing is willing to leave all this mess behind,” said Chinese Trivium analysts on Friday. “If everything is going well, Trump said that ‘he could’ talk to Xi Jinping after the conversations. If Xi takes the phone, the markets will shoot on Monday.”
Although there is no news of the call, the markets have collected the news with euphoria. The document also includes the commitment to create a mechanism aimed at monitoring economic and commercial dialogue. The Chinese part will be represented by the aforementioned He Lifeng, and the American, by Scott Besent and Jamieson Greer, international trade representative of the Trump administration. “The consultations may take place in China, in the United States or in a third country, according to the parties,” reads the agreement.
