Kathmandu. The United States and China on Monday announced a deal to drastically reduce their tit-for-tat tariff policy for 90 days.
The trade war between the two major economies has wreaked havoc on global financial markets. According to US Treasury Secretary Scott Besant, both sides have agreed to reduce those tariffs by 115 percentage points.
This means that Chinese goods imported into the US will be subject to a 30 percent tariff and American goods imported into China will be subject to a 10 percent tariff. The agreement is expected to ease fears of a global recession in a trade war.
The world’s two largest economies issued a joint statement on Saturday and Sunday, after the first round of talks on Saturday and Sunday, after US President Donald Trump announced global tax hikes, agreeing to reduce the three-digit tariff to two-digit and continue talks. US Treasury Secretary Besant said the weekend talks with Chinese Vice Premier He Lifeng and International Trade Representative Li Chenggang were “healthy” and “productive”.
“Both sides have shown great respect,” Besant told reporters. US President Donald Trump last month imposed a 145 percent tariff on imports from China and announced a 10 percent tariff on other countries. In return, Beijing has imposed 125 percent tariffs on American goods. In a statement, the two sides agreed to “establish a mechanism to continue discussions on economic and trade relations.” China praised the “significant progress” in the talks.
“This step serves the common interests of the two countries and the world,” the Chinese Ministry of Commerce said, adding that “the United States will continue to work with China to correct the wrong practice of unilateral tariff increases.” US media reported that the US dollar, which had fallen since US President Trump launched the tariff attack in April, was looking brighter for the future of the US stock market.
The agreement also boosted European and Asian markets. The trade dispute between Washington and Beijing has rattled financial markets, raising fears that the new tariffs could revive inflation and trigger a global economic slowdown.
‘A good sign for the future’
The head of the World Trade Organization, Ngozi Okonjo-Iweala, praised Sunday’s talks as an ‘important step’. “This progress is important not only for the United States and China, but also for the rest of the world, amid the current global tensions. It also addresses the concerns of the most vulnerable economies,” he said.
Ahead of the meeting at the residence of the Swiss ambassador to the United Nations in Geneva, Trump had suggested on social media that “it seems right to impose an 80 percent tariff on China,” hinting at a possible tariff cut. White House press secretary Carolyn Levitt later clarified that the United States would not unilaterally cut tariffs and that China would have to make concessions. The Geneva meeting comes days after Trump announced a trade deal with Britain.
The five-page informal agreement with Britain signaled to frustrated investors that Washington was willing to negotiate for sector-specific relief from current duties. Trump had threatened to keep the 10 percent tariff on most British goods and keep it as the base rate for most other countries.
प्रतिक्रिया दिनुहोस्