#TradeWarEases

The United States and China have agreed to significantly lower tariffs on each other's goods, marking a major easing of their trade war. The US will reduce its tariffs on Chinese goods from 145% to 30%, while China will lower its tariffs on US goods from 125% to 10%. These reduced tariffs will be in effect for the next 90 days, allowing both nations to continue trade negotiations.345+2

The agreement includes a mechanism for ongoing discussions about economic and trade relations, with both sides agreeing to hold meetings alternately in China, the US, or a third country.7 The US will maintain a 20% tariff on Chinese goods related to the fentanyl trade, but China has agreed to "suspend or remove" non-tariff measures against the US.346

The easing of the trade war has been welcomed by global markets, with US equity markets and shares of major tech companies seeing significant gains.346 However, analysts caution that while the announcement lowers the temperature in the trade war, it does little to change the overall direction of deteriorating ties between Beijing and Washington.47

The decision to lower tariffs comes as both economies are feeling the strain of the trade conflict. China's economy has been facing issues such as stubborn unemployment, sluggish consumer spending, and a looming deflation crisis.4 Meanwhile, the US economy contracted between January and March, and US ports have reported a sharp drop in the number of ships scheduled to arrive from China.34

The easing of tariffs is seen as a step towards a potential meeting between President Trump and Chinese leader Xi Ji.., which could lead to a more comprehensive trade deal.