The recent deal between the US and China highlighted concerns over low-value e-commerce packages, as US tariffs remain high. Treasury Secretary Scott Bessent emphasized that both nations wish to prevent total economic decoupling, only targeting specific items deemed critical for national security. Market reactions showed positive signs, with the S&P 500 and NASDAQ indices rising. Economists like Zhiwei Zhang viewed the deal positively, indicating it alleviated some investor fears over the impacts on global supply chains. Overall, the ongoing trade discussions reflect an intricate balance between protectionism and cooperation.
The deal announced today "did not address what would happen to low-value 'de minimis' ecommerce packages shipped from China to the US," Reuters.
Bessent said that "neither side wants a generalized decoupling. The US is going to do a strategic decoupling in terms of the items that we discovered during COVID were of national security interests."
Zhiwei Zhang, chief economist at Pinpoint Asset Management, remarked, "I thought tariffs would be cut to somewhere around 50 percent. Obviously, this is very positive news for economies in both countries."
The S&P 500 index was up about 2.6 percent today, while the tech-focused NASDAQ Composite index had risen about 3.5 percent, indicating a market reaction to trade news.
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