Background of the Conflict
The trade conflict between China and the USA began a few years ago with the introduction of tariffs by the USA on Chinese imports. China responded with counter-tariffs on US products. Over time, the tariffs have increased, leading to heightened tensions. Some of the main points of contention are:
- Tariffs: The USA temporarily raised tariffs on Chinese imports to as high as 145%. China also increased tariffs on US products.
- Technology: The USA imposed restrictions on the sale of technology products such as chip design software to China.
- Rare Earths: China implemented export controls on rare earths, which the USA considers problematic.
Recent Developments
In May 2025, China and the USA reached an agreement in Geneva to temporarily reduce tariffs. Both sides agreed to suspend 24 percentage points of the additional tariffs for an initial period of 90 days, while a residual tariff of 10% remains in place. This agreement is intended to serve as a basis for further discussions.
Upcoming Trade Talks
The trade talks, set to begin on June 9, 2025, in London, aim to discuss the details of the agreement made in May and further ease tensions. The Chinese delegation will be led by Vice Premier He Lifeng, while the US delegation will be headed by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer.
Impact on Private Investors and Savers
The trade conflict between China and the USA has significant impacts on private investors and savers:
- Market Volatility: The uncertainty in the trade conflict leads to fluctuations in the markets, making investments riskier.
- Economic Growth: A prolonged trade war could impair global economic growth, potentially negatively affecting investments and savings.
- Sector-Specific Risks: Companies heavily reliant on trade with China or the USA are particularly susceptible to the impacts of the conflict.
Overall, the upcoming trade talks are an important step toward reducing tensions and improving economic relations between China and the USA. A successful agreement could lead to market stabilization and an improvement in economic outlooks.