world war fee The impending disaster of trade-freezing tariffs on Chinese imports to the US has been averted, but like a Chinese cargo ship anchored off the coast of California, it’s not gone entirely.
Chinese and US officials issued a joint statement Monday morning informing the world that, despite mutually assured tariff threats as high as 245 percent on some Chinese imports to the US, and 125 percent tariffs flowing in the opposite direction, trade relations between the two countries have never been better.
“Recognizing the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship,” both countries have agreed to ditch the trade war escalation, leaving tariffs from both nations on the other at 10 percent – but only for 90 days.
Trump’s April 2 executive order 14257, which added a 24 percent tariff on Chinese goods on top of a 10 percent tariff imposed in February, could go back into effect on August 10 if further agreements aren’t made between the US and China. A similar 24 percent tariff order issued by the Chinese government in response to Trump’s April 2 order would also go back into effect in 90 days, according to the joint statement.
All that other trade war ratcheting via Trump’s executive orders 14259 and 14266, and China’s countervailing orders, appear to have been scrapped entirely based on the joint statement. We’ve asked the White House for clarification on whether the additional tariffs imposed on China were still on the table, but we didn’t receive a response before publication.
Sigh of relief?
The joint statement is likely to be good news for US consumers worried about facing bare shelves and for American ports that have noted a considerable slowdown in traffic, but whether they’ll change things for the tech industry is another matter altogether.
Trump’s trade war on China, where much of the world’s tech is made, has put the IT industry in a state of limbo, with projects frozen due to budget uncertainty and potential hardware unavailability, and tech hiring threatened for the same reason. Experts have warned that tariffs and trade threats could put the US behind in the global AI arms race. Small businesses in a variety of industries have been harmed as well.
A 90-day pause may put products back on shelves for the time being, but whether expensive IT investments and job markets will recover is far less certain. We’ve contacted some experts for comment, but didn’t immediately hear back.
Trump admitted late last month that he didn’t expect tariffs on China to actually remain as high as he had pushed them, so it shouldn’t come as a surprise that months of inflammatory, market-pummeling rhetoric has suddenly ended following public blowback to austerity measures proposed by a self-declared billionaire. Markets have bounced back on the news – and that’s long been one of Trump’s markers of success, after all.
We’ll see how the rhetoric changes once the markets recover. ®
