China and the US began to apply a temporary reduction in mutual duties from Wednesday. The ceasefire in their commercial war, which shook the world markets and the supply chains, will take 90 days, during which both parties will look for a solution to their dispute. TASR informs about this on the basis of AFP report.
Washington and Beijing agreed on a drastic reduction in high duties over the weekend in Geneva.
US President Donald Trump said on Tuesday (13 May) for Fox News that Washington has a plan for a “very, very strong” business agreement with China, which would allow the “opening” of Beijing’s economy to American businesses. This was stated on board the government aircraft Air Force One on the road in the Gulf of Persian without further details.
Trump’s duties hit the international trade hard, with China’s biggest blow. Beijing responded with retaliatory tariffs. Thus, duties for imports between the two countries have exceeded 100 %. This shook the world markets and erased billions from the value of the shares. Last weekend in Geneva, negotiations between the two largest economies of the world have finally begun to find a way from a dead end.
Within the US agreement, they will temporarily reduce their duties to Chinese goods to 30 % and China to US goods to 10 %. This ceasefire came in force on Wednesday shortly after midnight Washington Time (06.01 h) and represents a significant alleviation of the voltage in the trade.
This week, Chinese officials also organized a ministerial conference with the Latin American and Caribbean community (Celac) in an effort to strengthen their business ties with this region and act as a stable partner and defender of globalization.
“There are no winners in customs wars or commercial wars,” said President Si Jin-Pching at the event.
Despite the effort to resolve the dispute of the sources of tension between China and the US, they persist. Even after the reduction, the USA will remain higher than the Chinese, as the 20 % duties continue to pay for the alleged role of China in the flow of illegal drug Fentanyl to the US, as well as other measures against Beijing taken during the first government of President Trump. In addition, the US has introduced a 10 % corporal duty on imports from around the world, as well as duties of 25 % on items such as steel, aluminum and cars.
And while the US declares that they see space for progress, Beijing warned Washington on Tuesday to “stop blame” at it.
Analysts also pointed out that the possibility of returning high duties after 90 days creates uncertainty.
“Further duties will be difficult and the risk of restoration of escalation persists,” said AFP Yue SU, chief economist The Economist Intelligence Unit.
Trump’s dispute with Beijing caused confusion in American companies that are dependent on Chinese supply chains in its production. It is expected that the temporary ceasefire only partially calms the storm.
Beijing officials have admitted that the Chinese economy, which has long been struggling with the crisis on the real estate market and slow consumer expenses, has also affected uncertainty in the trade.
