{"id":43234,"date":"2025-05-13T18:54:06","date_gmt":"2025-05-13T13:24:06","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=43234"},"modified":"2025-05-13T18:55:18","modified_gmt":"2025-05-13T13:25:18","slug":"us-china-agreed-temporarily-slash-tariffs","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/13-05-2025\/us-china-agreed-temporarily-slash-tariffs","title":{"rendered":"US &amp; China have Agreed to Temporarily Slash Tariffs"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy\/Trade<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The U.S. and China agreed to <strong>suspend most tariffs on each other\u2019s goods.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Background<\/strong><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"dddbdc\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"697\" height=\"456\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/the-trade-war-between-us-and-china.png\" alt=\"the trade war between us and china\" class=\"not-transparent wp-image-43235\" style=\"--dominant-color: #dddbdc; width:443px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/the-trade-war-between-us-and-china.png 697w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/the-trade-war-between-us-and-china-300x196.png 300w\" sizes=\"auto, (max-width: 697px) 100vw, 697px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Why were Tariffs Levied?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Trade Imbalance: <\/strong>The U.S. Trade Representative pointed to a $1.2 trillion trade deficit with the rest of the world as justification for tariffs.\n<ul class=\"wp-block-list\">\n<li>The Trump administration viewed this as the U.S. being &#8220;ripped off&#8221; by trading partners who protected and subsidized their own industries while benefiting from open U.S. markets.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Strategic Protectionism: <\/strong>The administration believed that talking had not helped change global trade behavior, so high tariffs were seen as a tool to force other countries to open their markets.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Revised Tariffs After Geneva Talks<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Both have reached an agreement on a <strong>90-day pause <\/strong>and substantially move down the tariff levels.\u00a0<\/li>\n\n\n\n<li>The deal means<strong> \u201creciprocal\u201d tariffs<\/strong> between both countries<strong> will be cut from 125% to 10%.\u00a0<\/strong><\/li>\n\n\n\n<li>The U.S.\u2032 20% duties on Chinese imports relating to fentanyl will remain in place, meaning total tariffs on China stand at <strong>30%.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Was There a Truce?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>China\u2019s Retaliation:<\/strong> Unlike other countries, China responded with its own counter-tariffs and non-tariff barriers escalating the trade conflict.<\/li>\n\n\n\n<li><strong>Economic Concerns in the U.S.: <\/strong>At peak levels (U.S.: 145%, China: 125%), tariffs became prohibitively expensive for consumers and businesses.\n<ul class=\"wp-block-list\">\n<li>Example: A $100 Chinese product became $245 in the U.S.<\/li>\n\n\n\n<li>The U.S. economy began contracting in Q1 2025 \u2014 even before the full impact of the tariffs had hit.<\/li>\n\n\n\n<li>Economists predicted a recession and possibly stagflation (a rare combo of economic stagnation and inflation).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Consumer Pressure: <\/strong>U.S. consumers faced rising prices and shrinking product availability, especially at major retailers like Walmart.\n<ul class=\"wp-block-list\">\n<li>Public and political pressure mounted as economic conditions worsened.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>China\u2019s Economic Resilience: <\/strong>While China\u2019s exports to the U.S. dropped 21%, its overall exports rose 8%, and GDP grew 5.4% in the same quarter.\n<ul class=\"wp-block-list\">\n<li>China\u2019s global trade surplus increased, indicating that it had managed to diversify and offset the U.S. losses.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The current agreement is a truce, not a full trade deal.<\/li>\n\n\n\n<li>Market reactions have been positive \u2014 stocks and the dollar rose, while gold and bonds fell, indicating reduced risk perception.<\/li>\n\n\n\n<li>However, the talks that follow will be complex, and no guarantees exist for a comprehensive trade deal.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/why-us-china-have-agreed-to-temporarily-slash-tariffs-9999381\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">The U.S. and China agreed to suspend most tariffs on each other\u2019s goods.<\/li>\n<p><\/p>\n<h3><strong>Why were Tariffs Levied?<\/strong><\/h3>\n<li class=\"ms-5\">Trade Imbalance: The U.S. Trade Representative pointed to a $1.2 trillion trade deficit with the rest of the world as justification for tariffs.<\/li>\n<li class=\"ms-5\">The Trump administration viewed this as the U.S. being &#8220;ripped off&#8221; by trading partners who protected and subsidized their own industries while benefiting from open U.S. markets.<\/li>\n<li class=\"ms-5\">Strategic Protectionism: The administration believed that talking had not helped change global trade behavior, so high tariffs were seen as a tool to force other countries to open their markets.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/13-05-2025\/us-china-agreed-temporarily-slash-tariffs\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-43234","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43234","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=43234"}],"version-history":[{"count":4,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43234\/revisions"}],"predecessor-version":[{"id":43272,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43234\/revisions\/43272"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=43234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=43234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=43234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}