Trade between the U.S. and China: A breakthrough from a meeting on the issue of Fentanyl Stopping and the Australian Embassy in Geneva
Is it realistic to think that the US will be a consumption economy in the foreseeable future and China will be a manufacturing hub? “No, I do not think that is the case,” said Dmitry Grozoubinski, an Australian diplomat and trade negotiation expert. “But is there things the two sides can do for one another that would make both sides happy, at least a little bit? Sure, there absolutely must be.”
The deal, announced after negotiators from both countries met in Switzerland over the weekend, brings U.S. taxes on Chinese goods down to 30% from the 145% imposed by President Trump in early April. China is going to reduce its taxes by 10%, compared to the 125′′ it was levied in response to the U.S.
The president of the European Union Chamber of Commerce in China said uncertainty remained after the decision was made. “Businesses need certainty in their operations and investment decisions.”
GENEVA — The U.S. and China have agreed to significantly reduce tariffs imposed just weeks before on each other’s goods, after negotiators from both countries met over the weekend for trade talks in Switzerland, adding yet another dramatic turn in a dispute that has roiled financial markets and rocked the global economy in recent weeks.
Bessent said neither side wants a separation, they want trade and balanced trade.
This week, the Chinese came to deal with the issues and the two countries agreed to set up a consultation mechanism.
American levies on Chinese goods are set to fall from at least 145% to a base levy of 30% for an initial period of 90 days, while Chinese costs are projected to fall from at least 125% to 10%.
The talks were conducted on the Chinese side by the Vice premier and on the U.S. side by the trade representative.
“We concluded that we have shared interest and we both have an interest in balanced trade,” Bessent said at a press conference on Monday. There was a positive path forward on the two countries working to address the issue of Fentanyl Stopping.
“China has always pursuing win-win outcomes in its trade and economic negotiations, and therefore any possible deal to be reached will definitely by in the development interest of China’s own,” said Li Chenggang, a diplomat with China’s commerce ministry.
Vice Premier He described the atmosphere of the meeting as “candid, in-depth, and constructive” at a press conference following the meeting, saying it achieved “substantial progress and reached important consensus”.
The U.S.-China Agreement on Trade During the Low-Target Season: Jay Foreman and a Toy-Product Sales Representative
The U.S. and China agreed on Monday to temporarily ease tariffs on each other’s goods, which had caused much of the trade between the two countries to stall in recent weeks.
Many businesses stopped delivery because of the triple-digit tax. There was a cut in cargo traffic at the Port of Los Angeles last week, raising the spectre of a supply shortage in the near future.
When the tariffs took effect, Ross removed two cargo containers from ships in China. She is scrambling to get as much merchandise to the US as possible while the lower tariffs are still in place.
Jay Foreman, whose company makes Tinker Toys, Lincoln Logs and other toys in China, got news of the deal at 4:30 am, and immediately called associates in Hong Kong to begin scheduling shipments.
“We’ve been holding everything at the factories and at the ports, because we didn’t want risk putting anything on containers with a 145% tariff,” Foreman says.
Some businesses may race to produce and ship products early in the Christmas season to avoid higher tariffs in the fall. It is possible that there will be a lower tariffs order at the end of the three-month window.
“Right now, I’m just trying to get through the next four to six weeks,” he says. “Whether I double-shift the factories to try to get more produced and out the door before the end of the 90 days, I’ll probably need another three to four weeks to figure that out.”
The U.S. Stagflationary Economy: Back-and-Forth over High-Tax Implications for the American Economy
President Trump paused tariff hikes on other countries in early April for 90 days, saying more than 75 countries had reached out about seeking deals with the U.S. Some of those tariffs could resume in early July.
“These things usually take years. The rule of law and the ability to enforce it is much harder when you’re not dealing in a multilateral framework,” Swonk said. “It’s harder. It’s only one-on-one.
The last time the U.S. experienced stagflation, Swonk said, was in the 1970s. Oil prices went up, the cost of goods went up, and Americans accepted inflation as a part of life.
The back-and-forth over tariffs has disrupted the company’s supply chain, he said, leaving importers scrambling and uncertain about what comes next. The current agreement lasts 90 days, and there’s no clear path to follow after that.
A Lifeline to Deal With the Fed, Unemployment and Inflation: Jay Swonk, President and Chief Operating Officer of Basic Fun!
Swonk said that the Federal Reserve worries about this combination most. The Fed voted to keep interest rates steady due to concerns about the economy and risks of higher unemployment and inflation.
Swonk said the past 40 days has resulted in a paralysis on importing goods and now panic to bring them in. Stagflation can be caused by those two factors, which make the economy experience higher costs for goods, higher unemployment and slower economic growth.
She said that the same thing happened in the wake of the Pandemic, with freight shipment fees going up in addition to the tariffs.
Swonk said that stop-go programs can make for big policy mistakes, noting that it’s easier to shut down a factory than it is to ramp it.
She said that it will take a while for goods released in response to the lower tariffs to reach the US market.
Everyone slows down to a crawl in order to get across the stoplight, but don’t know which person is supposed to go next. Some prefer to do a U-turn and wait for traffic to clear or the stop light to be fixed.
Stocks surged after news of the deal. Diane Swonk is an economist at the accounting firm KPMG US.
Jay Foreman, CEO of Basic Fun!, a company that is known for classic toys like Care Bears and Tonka trucks, told NPR’s Morning Edition that the sudden shift from a 145% tariff to a 30% rate felt like a lifeline — but still feeling the pain of paying increased tariff rates.
It was about 4:30 in the morning when he got the news. I hopped out of bed, called my factories in China and started booking trucks and containers. My operations team reminded me that it isn’t just a flip of a switch.
He said they can be in business. “But if the burden falls entirely on manufacturers like us, we’re in trouble. Everyone — retailers, factories, and consumers — needs to share the pain.”
If everyone in the supply chain absorbs a portion of the cost, retail prices could go up 10% to 15%. Otherwise, companies with slim margins won’t survive.
During the holidays, is is a crucial sales window for toymakers, and at the height of the uncertainty he feared that his shelves would be empty. Foreman is cautious. He thinks the market will be paralyzed if the administration reverses course again.
The trade policies in the U.S and China are having a negative impact on his business and the economy.
Martin believes the 30% tariffs is better than 145%. But you were telling me that it’s like drinking spoiled milk instead of poison. By the way, very vivid imagery. Well, why do you say that?
Martin: You were worried that you would not have enough to sell at Christmas. Yes, which would have shut you down, right?
The Foreman: What Happens When The President Makes another U-turn, and How Do They Obtain a New Job?
Foreman: Oh, for sure. If the tariffs were in place, there would be a huge shortage of merchandise for the holiday season. The 30% gets things moving. You’re likely to see prices increase, if everybody takes their part, about 10 to 15%. The market will absorb unemployment and the stock market’s high levels if they remain at that level. And things will kind of move on. And we’ll, again, see whether the president’s experiment works or not.
The person is known as the Foreman. Well, if he makes another U-turn, it’s just chaos for everybody again. And this is where they’ve got to sort of settle down. We were lucky and we got the varsity team going to Switzerland to do this. This JV team is still out there working with every other market. The president is capable of throwing a grenade into the middle of this. So they’ve just got to settle down, and move on and let people do business this year. Let’s have Christmas.
