Trade relations between the United States and China have seen a significant breakthrough after the two countries agreed to reduce mutual tariffs for 90 days, in a step aimed at easing economic tensions between the world's two largest economies.
Details of the agreement
• Reduce tariffs: The United States agreed to cut tariffs on Chinese imports from 145% to 30%, while China will reduce its tariffs on American goods from 125% to 10%.
• Duration of the agreement: This relief will last for 90 days, aiming to allow for further negotiations on a comprehensive trade agreement.
• Negotiations: This agreement was reached during direct talks in Geneva between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier He Lifeng.
Reactions
• Financial markets: Global markets responded positively, with U.S. stock indices like the S&P 500 and Nasdaq rising by up to 3.5%, oil prices increased, while gold prices dropped.
• Analysts: Some analysts welcomed the agreement as a positive temporary step, while others expressed doubts about the sustainability of this easing without a comprehensive agreement.
Future challenges
Although the agreement represents significant progress, many fundamental issues remain, such as:
• Trade imbalance: The United States seeks to reduce the $295 billion trade deficit with China.
• Chinese economic model: Washington demands that China adopt a more open economic model, requiring sensitive internal reforms.
• Other issues: The outstanding issues include intellectual property rights, support for domestic industries, and access to markets.
Summary
This agreement represents a temporary easing in the trade war between the United States and China, with hopes that it will lead to a comprehensive agreement addressing the core issues. However, the sustainability of this progress depends on the success of upcoming negotiations and the achievement of lasting solutions.
