How the US-China trade talks beat expectations and stopped the bleeding, for now
Analysts say the outlook appears more rose-tinted after weeks of tit-for-tat tariff escalations, and the implications for businesses, markets and consumers look encouraging
Landmark China-US talks, having yielded a major de-escalation in what was shaping up to be an economically crippling trade war, stand to ease uncertainties for the business community and consumers while giving both powers interim political relief at home without appearing weak, according to analysts, with one hailing China for “a particular victory”.
Both countries will remove most tariffs imposed since April 2 and suspend some by 90 days, bringing the US’ additional tariff rates on Chinese goods to 30 per cent, and Chinese duties on US imports to 10 per cent, on top of some retaliatory levies imposed earlier on selected American goods.
“This was a larger-than-expected de-escalation and represents an upgrade to the outlook,” said Lynn Song, chief Greater China economist at ING.
The deal was reached after two days of high-stakes meetings in the Swiss city of Geneva between Vice-Premier He Lifeng and US Treasury Secretary Bessent as well as US Trade Representative Jamieson Greer.
“It is particularly encouraging that the agreement was reached quickly, indicating that neither side was comfortable with full trade decoupling,” said Su Yue, principal economist for China at the Economist Intelligence Unit, noting that it eases some economic pressures, especially for the US, where inflationary concerns remain prominent.
“Although the de-escalation of the trade war benefits both economies, the agreement, which significantly lowers tariffs without any concessions, is likely to be viewed as a particular victory for China,” Song added. “China had previously demanded a reduction in tariffs before negotiations, and this now seems to have been achieved.”