The United States decreases China prices to 30% after “constructive” talks, retreating a large part of Trump's trade threats
The stock markets jumped on Monday as the United States and China promised to defuse a budding trade war, reducing prices that threatened significant pain to the two largest economies in the world.
The Hong Kong Hang Seng reference index closed 3% more, the news arriving about an hour before the market closes. The index has now recovered its losses since US President Donald Trump announced “reciprocal prices” on April 2. Tower contracts on S&P 500 increased by 2.75%to 4 h 45, Eastern time.
On Monday, the United States announced that He will come back most prices He had imposed on China. During the next three months, Chinese products will be charged a price of 30%: a tariff of 20% linked to the alleged smuggling of fentanyl and the reference rate of 10% on all American imports. The reprisals prices imposed on April 8 and 9, which increased the rates to 145%, will be canceled.
This means that if, after 90 days, the break is not extended, the prices on Chinese products will reach 54%.
In return, China will reduce its tariffs on American products to 10%. Beijing take a break of his non -pricing reprisals.
'Total reset'
Even before the break revealed, Asian investors were optimistic that the good news was on the way. US and Chinese officials met in Geneva, Switzerland, during the weekend, the first since Trump imposed the prices for the first time in China in February.
On Sunday, the Secretary in the United States of the Treasury, Scott Bessent, announced that the two countries had made “substantial progress” in the negotiations. Trump, on social networks, described talks as a “total reset” in relationships.
During a separate press conference, the Deputy Prime Minister of China, He Lifeng, said that the talks were “frank, in-depth and constructive”, according to a transcription of Pekinology, A newsletter focused on China.
The two parties also agreed to create a new “commercial consultation mechanism”.
This optimism helped relaunch Asia markets on Monday. The Nikkei 225 of Japan increased by 0.4%, South Korea increased by 1.2%and Taiwan's Taiex increased by 1%. (Everything closed before the American and Chinese announcement.)
Dismperation of trade war
Monday's prices break is the last and most important of Trump's trade war with China. The two parties had discreetly granted significant exemptions on the tariffs of key goods, such as consumer electronics (on the part of the United States) and semiconductors (from China).
However, the American economy was already beginning to feel the effects of prices. Port operators predicted a sharp drop in shipping volume, while American companies complained of delayed shipments.
China has also been faced with the prospect of significant job losses against loss of access to the American market. At the end of April, Goldman Sachs suggested that until 16 million jobs in China were exposed to the American market.
Fear of real economic damage could finally have pushed both parties to start talking.
“The consensus of the two delegations is that none of the parties wanted a decoupling,” said said in a press conference Monday, following the announcement of the price break.
This story was initially presented on Fortune.com
