An official statement released this Monday raises hopes of a return to normal between China and the United States. The two countries issued a joint statement confirming the suspension of some of the punitive customs duties imposed in recent weeks. This news sent the international market soaring, with a 3% increase recorded on the Hong Kong Stock Exchange.
In detail, the United States is reducing its customs duties to 30%, and China to 10%, according to U.S. Trade Representative Jamieson Greer. The measure will take effect on May 14th and should temporarily ease the Sino-American trade situation while a more lasting agreement is reached.
Avoiding Escalation
Since Donald Trump's return to power, the American president had struck hard, announcing new customs duties on Chinese imports. The response was swift, and punitive tariffs have been subject to a worrying escalation. Before the truce, the measures implemented by the Trump administration reached a 145% increase, while China's had gone down to 125%.
In recent days, the two powers had taken a first step towards each other, paving the way for a reduction in customs duties. On his social network Truth, Trump had spoken out in favor of a reduction to 80%, recognizing “the importance of their bilateral economic and trade relations for both countries and for the global economy,” as well as “the importance of a sustainable, long-term economic and trade relationship.” The goal will then be to “continue discussions on economic and trade relations.” The conclusion of this agreement puts a stop to the escalation of international tensions. Because the stakes are not only high for the two powers concerned. The trade war between China and the United States has shaken the global economy.
And in France?
In France, Emmanuel Macron had convened a meeting with representatives of the affected sectors to define a crisis strategy, in order not only to assess the economic impact of this crisis, but also to coordinate a response at the European level. The European Union also planned to retaliate accordingly, by deploying targeted taxes on American digital services or on certain iconic products such as bourbon or Harley-Davidson motorcycles. The European Commission also considered financially supporting the sectors most affected by these measures, through emergency funds dedicated to international trade.
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