The two world’s largest economies in the USA and China have initially defused their trade dispute. What has been agreed and how is it going? Questions and answers.
What have China and the USA now agreed on?
In their ongoing trade conflict, China and the USA have agreed a kind of “ceasefire” of 90 days. During this time when negotiations are to be made, there are still considerable, but significantly lower customs sets than before.
The United States has reduced its tariffs to Chinese imports from 145 percent to 30 percent. China now demands ten percent for imports from the United States, after 125 percent. The trading partners have reduced their customs sets by 115 percentage points each. However, special tariffs for individual industries are excluded from the deal, said US trade minister Scott Bessent after the negotiations at the weekend in Geneva.
Both sides now want to continue to exchange ideas. There should be regular consultations in China and the USA or a third country, the Ministry of Commerce said in Beijing.
How do the financial markets react?
The financial markets reacted relieved. Many market participants were surprised by the progress of discussion. While the Chinese stock index CSI 300 won 1.2 percent before the details were announced, the German stock index Dax made a record high of almost 23,912 points in the early trade. However, the price gains weakened during the day.
The share price of the Danish shipping company Giant Maersk initially jumped up by around ten percent. The shares of the German car manufacturers BMW and Mercedes, which also produce for the Chinese market in the United States, were also in demand.
In contrast, the price of gold, which is considered a safe system in times of crisis, fell over two percent to around $ 3,216 per troy ounce.
How did the dispute have run so far?
The conversations in Geneva had been an unprecedented escalation with tariffs and counter -tariffs. In April, the mutual customs claims reached its peak. US President Donald Trump screwed up the tariffs to Chinese goods to 145 percent in several steps, whereupon Beijing reacted to US goods with counter-tariffs.
Such customs sets are hardly possible. Most recently, the trade between the USA and China almost came to a standstill, which also affected the global economy. How high the damage is is not yet foreseeable, but the first indicators such as the Chinese merchant data in April, falling container bookings or the mood in the manufacturing trade in the United States indicate considerable business burglaries.
What’s next?
In essence, nothing has changed at the issues. The accusation of US President Donald Trump, China Wende unfair trade practices, is still in the room. The United States wants to change market conditions, especially in medication, semiconductors and steel. Beijing, on the other hand, continues to speak of the “faulty practice” of the United States to impose one -sided tariffs.
Nevertheless, the sound has become significantly milder since the weekend. Both sides praised the “constructive” conversations. While the Chinese delegation spoke of a “series of important matches”, Trump described the conversations as “complete restart”. US finance minister Bessent said both sides were against decoupling: “We want trade.”
Since both economies have already occurred from the dispute, a new customs spiral appears unlikely after the 90-day breastfeeding period has expired. The US trade representative Jamieson Greer said that the agreed discussion channel would prevent an escalation from repeating itself as since April.
However, observers also warn of premature euphoria. The customs level remains higher than at the beginning of the year and a deal is “not yet agreed,” commented in Gefolkswirt Carsten Brzeski. “Just because the worst-case scenario does not occur, not everything is fine.”
What is left of Trump’s “Zollhammer”?
At the beginning of April, US President Trump had announced flat-rate tariffs of at least ten percent for almost all trading partners and partly drastic customs increases for more than 60 countries, which he accused unfair trading practices. The direct neighbors Mexico and Canada were excluded from this, with whom Trump had previously delivered an extensive exchange of blows and agreed in time.
Since then, some customs increases have often been surprisingly exposed to a negotiation period, or – as in the case of China – further escalated. But with none of the large trading partners, there has been a final agreement so far.
Not even with Great Britain, with which there was a first agreement last week. However, many tariffs relating to the Great Britain remain.
A 90-day customs break is also currently underway between the EU and the USA. It is also open here whether there will be a final agreement by mid -July.
