The escalation of customs tariffs launched by Donald Trump, to which China immediately responded, will be put on hold, at least temporarily. The two countries announced in a joint statement a truce in the trade war between them, which has resulted in successive increases in export taxes. The lull is expected to begin before May 14 and continue for at least 90 days.
During this period, customs tariffs will obviously not disappear, but they should return to more normal levels. The United States has pledged to reduce its tax on imported Chinese products from 145% to 30%. On the other side of the Pacific, the tariff has been adjusted from 125% to 10%. The stated objective of this truce: to give more time to trade negotiations and allow them to take place in a calmer climate.
U-turn on customs duties
This agreement comes after talks in Geneva between the two parties and could allow stock markets to return to a calmer environment. This 90-day truce bears a striking resemblance to Donald Trump's announcement on April 9, which had already suspended the explosion of customs tariffs on all of the United States' partners, with the exception of China.
How can this new turnaround be explained? In its press release, the White House does not provide further details, but Donald Trump's choice is inevitably linked to the state of the American market. This was already the reason why the first truce was announced, with the American president explaining that he was "monitoring the bond market" and that he had noticed that the customs surcharges were "a bit scary." "We have to be flexible," he concluded to explain his decision, even if it meant calling his strategy into question. This flexibility, which stopped at China's borders, now encompasses it.
Source: MSN
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