A New Tariff Deal Between the USA and China
The latest tariff deal between the USA and China marks a significant easing in the long-standing trade dispute between the two largest economies in the world. As part of an agreed “ceasefire” lasting initially for 90 days, both sides have dramatically lowered their mutual tariffs: The USA reduced its tariffs on Chinese imports from previously up to 145 percent to now 30 percent, while China lowered its tariffs on US imports from about 125 percent to just 10 percent.
Progress and Challenges
These reductions mean a decrease of approximately 115 percentage points each, significantly facilitating trade between the two countries. However, special tariffs for individual sectors remain exempt for the time being. Both countries also plan to establish a consulting mechanism to resolve future economic and trade policy differences through dialogue and deepen cooperation.
Impact on Global Trade
The effects of this deal are promising for global trade and market stability: The previously almost blocked trade due to high tariff rates can recover, which also sends positive signals to international financial markets. Stock markets reacted with relief; for instance, shares of the Danish shipping giant Maersk rose by about ten percent immediately after the announcement of the deal. For investors, this means improved planning and reduced uncertainties in global trade.
Tariff Barriers Remain
Additionally, it should be noted that despite this agreement, a base tariff of ten percent on all imports still applies in the USA, and higher specific tariffs for certain products such as steel, aluminum, or cars may remain. Nevertheless, this tariff reduction represents an important step towards de-escalation.
Summary:
- The USA lowers its tariffs on China from up to 145% to approximately 30%.
- China reduces its import tariffs on the USA from about 125% to around 10%.
- A preliminary ceasefire applies for at least 90 days with further negotiation goals.
- Special tariffs remain partially in place.
- Establishment of a bilateral consulting mechanism is planned.
- Positive reaction in financial markets due to improved trade conditions.
This deal could thus be considered a significant step towards stabilizing the global trading environment and offers investors greater security in light of previous uncertainties caused by high tariff barriers.