By drastically lowering their respective tariffs and creating a system to launch a business negotiation in the next 90 days, China and the United States came to an agreement to end their trade battle.
The US will reduce its tariffs on Chinese goods from 145 % to 30 %, according to a joint US-China declaration released on Monday. This includes a 20 % tariff pending China’s effort to stop the export of fentanyl precursors to America and a 10 % tax that most other nations are subject to.  ,
The US imposed an average 20 % tax during the Trump administration’s second industry war against China in 2018 in addition to the 30 % price. That leaves the US with a 50 % import price.
China will also lower its tariffs on US products from 125 % to 10 %. On May 2, Bloomberg reported that China has already exempted its reciprocal tariffs of 12 % on roughly$ 40 billion worth of American goods, or a quarter of US imports altogether.
The price reductions, which will go into effect on May 14, were more than anticipated, as President Trump had stated in a social media post on May 9 that” an 80 % tax on China seems appropriate”!
Hong Kong’s Hang Seng Index increased 3 % to close at 23, 549 on Monday as a result of the US-China business war’s de-escalation.
The meeting took place on May 10 and 11 with Taiwanese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent  in Switzerland.
Washington and Beijing announced in a joint statement on Monday that they would create a device to carry out economic and trade relations conversations.
He Lifeng and Bessent may represent the Chinese side, while Bessent and Jamieson Greer, the US member, will reflect the US area. They may schedule meetings in China, the US, or a second nation upon mutual agreement. Additionally, the two parties perhaps hold working-level discussions on important trade and economic concerns.
” China has canceled 91 % of the counter-tariffs, and the US has canceled 91 % of the additional tariffs. According to a spokesperson for the Chinese Ministry of Commerce ( MoC), the US has suspended the implementation of a 24 % “reciprocal tariff” and China has also suspended the implementation of a 24 % counter-tariff.
According to the spokesperson,” It is hoped that the US will continue to work with China on this meeting, completely correct the bad practice of punitive tariff increases, continue to strengthen socially beneficial cooperation, maintain good, stable, and sustainable economic and trade relations, and simultaneously boost the world economy with more certainty and stability,” the spokesperson said.
The He-Bessent gathering, according to Yuyuan Tantian, a social media account run by the state-owned China Central TV, has revealed three key messages: ; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
- The conversational style was open, in-depth, and creative. Due to two factors, the two parties had come to terms. Next, the US side has made itself very proactive, serious, and problem-solving-oriented in the conversations after misinterpreting the present situation and overestimating its capabilities. China had firmly countered to secure its own interests.
- China and the US have agreed to establish a business discussion system to keep conversation going. Potential communication will be decided by both parties.
- Any potential discussions between the two factors must fit with China’s growth goals.
Yuyuan Tantian claimed that China’s choice to fight against Trump’s “reciprocal” levies contributed to the significant advancement of a deal between China and the US.
Stable supply stores are what?
Bessent claimed on Monday that the trip trade deal represents” proper decoupling” from China.
We do not need a broad decoupling from China, but what we do need is a decoupling for corporate necessities, which we were able to get during Covid, Bessent said. We became aware that provide stores that were effective lacked resilience.  ,
To safeguard our metal industry and work on important semiconductors and medicines, we will build our own material. Therefore, he continued, adding that the mutual tariffs are not related to any particular market tariffs.
He claimed that the most recent business deal represents yet another step in the US’s transformation of its dependence on Chinese goods.
Bessent said in a statement on the fentanyl controversy,” We saw here in Geneva that the Chinese are now serious about assisting the US in stopping the flow of prelude drugs, because they brought their business group led by the evil top but they also brought a deputy minister for protection, who was their fentanyl professional.”
He claimed that US national security officials and Chinese counterparts had a very long and in-depth discussion about how the two nations could collaborate on the fentanyl issue.
Wang Xiaohong, the country’s public security minister, is also the deputy secretary of the Centre for Political and Legal Affairs; and of the Chinese Communist Party.
Unwanted Chinese goods
After Trump imposed tariffs on almost all nations on” Liberation Day” ( April 2 ), according to media reports, many Chinese factories lost all of their US orders, and some experienced financial difficulties as Chinese exporters cancelled their orders without getting paid.  ,
China Customs reported a 0.3 % decrease in overall imports to US$ 220.1 billion in April from US$ 220.1 billion in the previous month. For the same period, China’s US imports decreased by 13.8 % to$ 12.6 billion.
China’s total exports increased by 7.9 % to$ 315.7 billion in April from$ 292.5 billion a year earlier, more than the 5.7 % increase year over year seen in the first quarter of this year.
A calculation can show where Chinese manufacturers shipped their unwanted goods during the trade war.
For instance, in April, China’s exports to Vietnam increased by 22.5 % y/o year over year to$ 17.1 billion. The April figures could have maintained the first quarter’s 15.6 % growth rate to reach$ 16.2 billion if there had not been a” Liberation Day.” This implies that Trump’s tariff war may have contributed to a$ 975 million increase in China’s exports to Vietnam last month.
According to this calculation, in April, about$ 10.9 billion of Chinese goods were not shipped to the US. The decline was entirely offset by China’s increased exports to Africa ($ 2 billion ), Latin America ($ 1.6 billion ), Singapore ($ 1.8 billion ), Indonesia ($ 1.4 billion ), Germany ($ 1.2 billion ), Vietnam ($ 975 million ), Malaysia ($ 972 million ), India ($ 745 million ), and Thailand ($ 714 million ).
The Trump administration set a 90-day halt to most international tariffs on April 9 and imposed a 10 % tariff on them. It will likely make tariff decisions based on whether a nation is willing to lower its tariffs on American goods, take the initiative to reduce its trade surplus with the US, and impose a cap on the amount of Chinese goods that can be exported back to the US.  ,
Read: China and the US are beginning to communicate more diplomatically.