There is a deal to cut tariffs in the U.S. and China
The US and China have agreed to reduce tariffs imposed on each other’s goods, after negotiators from the two countries met over the weekend in Switzerland for trade talks. The deal brings the US tariffs on Chinese goods down to 30% from the 145% imposed by President Donald Trump in early April. Some of those tariffs could resume in early July.
Trump has lost the trade war with China
UBS has warned the US-China trade war may deal a further blow to China’s property sector, which has been showing signs of stabilization. It added that US tariffs “may reduce China’s external demand sharply and add downward pressures to domestic prices” in China. UBS has downgraded China’s 2025 growth forecast to 3.4%, assuming current tariff hikes remain and China rolls out additional stimulus.
Biden is trying to buy time with the new tariffs on China
US President Joe Biden’s administration has announced tariffs on imports from China, which will increase tariffs on goods from China to 50% by 2025. The increased tariffs will affect around $18 billion a year in imports. Some of the goods include critical minerals like lithium, rare earths, and cobalt, which could also affect the electric vehicle (EV) industry.