China and U.S. Agree To Cut Tariffs by 115% After Talks

TaiwanPlus News

China and the U.S. have agreed to cut tariffs on each other's goods by 115%. The breakthrough came after two days of talks in Geneva between senior officials from both sides.

Transcript

00:00China and the United States have agreed to dramatically lower tariffs on each other's goods.

00:05The announcement came after two days of talks in Geneva between high-level officials from China and the U.S.

00:11This was U.S. Treasury Secretary Scott Besant announcing the deal.

00:15We have reached an agreement on a 90-day pause and substantially moved down the tariff levels.

00:33Both sides on the reciprocal tariffs will move their tariffs down 115 percent.

00:39After the announcement, Asian and European markets rallied, as have U.S. futures.

00:47Louise Watt has been following this and joins us now from our newsroom in Taipei.

00:51Louise, does this mean that the trade war is off?

00:57Well, Joyce, as you say, stocks have rallied, so there's certainly hope that a full-scale trade war has been averted.

01:05Let's take a look first at what Beijing and Washington have agreed.

01:10The U.S. will slash its tariffs on Chinese goods from 145 percent to 30 percent.

01:17And Chinese tariffs on U.S. goods will fall from 125 to 10 percent.

01:23And they will do this by Wednesday for 90 days.

01:28So a cooling-off period for the world's biggest two economies.

01:32Now, this surprise breakthrough came after critical talks over the weekend in Geneva.

01:40The first face-to-face meetings between high-level U.S. and Chinese economic officials

01:46since President Trump came back to power and put on tariffs on many countries,

01:52but those particularly hefty tariffs on China, leading China to retaliate with its own tariffs.

01:58But it's clear that neither side wants a damaging trade war.

02:03U.S. Treasury Secretary Scott Besant, he said at a press conference that they had very robust discussions

02:12and both sides showed great respect.

02:17So they still have a lot to discuss.

02:19There's still a long way to go to get their trade relationship back on track.

02:23But over the weekend and today, yes, clear progress has been made.

02:29Right. So high-level officials from both sides have now sat down and talked.

02:34What does this agreement mean for U.S.-China relations going forward?

02:42Well, relations between China and the U.S. have been strained to say the least

02:47since President Trump came back to power.

02:50That's despite Trump saying that he got on famously with Xi Jinping

02:55and that he wants Chinese investment in the United States.

03:01But China and the U.S. have agreed to establish a mechanism

03:05to continue discussions about economic and trade relations.

03:10And Scott Besant, the U.S. Trade Secretary, he struck an interesting note.

03:14He told reporters at the press conference that, yes, Xi and Trump do get on very well.

03:23And he suggested that had this mechanism already been in place,

03:27they could have avoided some of the trade war escalations that we've seen over the past month.

03:33Now, China's response, it said it's committed to the stable development of relations

03:39between Beijing and Washington, but that it draws the line at pressure and threats.

03:46So now the two sides continue talking.

03:48Can they resolve their differences?

03:50Whether they can or not has implications not just for their economies,

03:54but for the global economy.

03:58Thanks, Louise, for that update.

03:59That was Louise Watt in our Taipei newsroom.

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