As fears grew that the trade war initiated by the US and China would severely weaken the global economy, the two countries have announced an agreement to temporarily cut a large portion of the extremely high tariffs they had imposed. The US had decided to impose a 145% tariff on goods imported from China, while China had decided to impose a 125% duty on goods imported from the US.
For the first time since introducing the tariffs, China’s Vice Premier Liu He met with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer during ongoing negotiations in Geneva. From these discussions, they have now agreed to reduce the 145% tariff on Chinese goods imported to the US to 30%. In exchange, China has agreed to reduce its 125% duty on US imports to 10%.
Both countries stated that this change will remain in effect for the next 90 days until a permanent agreement can be reached. After the negotiations, the US Treasury Secretary said that both countries had effectively protected their national interests in these talks. He also said that both countries want to find a way to conduct trade between the two nations on equal terms, and that this outcome had been achieved. With the announcement of this agreement, the value of the US dollar has already begun to rise in global financial markets.
Financial experts had estimated that this dispute between the world’s two largest economies was disrupting global trade and trapping approximately $600 billion worth of goods in limbo.
