The United States and China have unexpectedly agreed to suspend punitive trade tariffs for 90 days, signaling a thaw in relations between the two economic superpowers. The U.S. will reduce tariffs on Chinese goods from 145% to 30%, while China will lower its retaliatory tariffs from 125% to 10%. This agreement is seen as a positive development amid rising concerns over inflation and business impacts. U.S. Treasury Secretary emphasized a commitment to more balanced trade, while also facilitating ongoing trade negotiations to mitigate risks of an economic embargo.
Under the agreement, US import tariffs on Chinese goods will be reduced from a peak of 145 per cent to 30 per cent. In exchange, China will cut its retaliatory duties on American exports from 125 per cent to 10 per cent.
US Treasury Secretary Scott Bessent stated that both sides were now committed to building 'more balanced trade' and denied any intention of decoupling, describing high tariffs as the equivalent of an embargo.
The broader context includes mounting pressure within the US, where business leaders and economists have warned the tariffs risk fuelling inflation and undermining key industries.
The agreement paves the way for regular trade negotiations, to be hosted alternately in the US, China, or neutral countries, indicating a constructive dialogue.
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