Trade Truce: U.S. and China Ease Tensions, But Challenges Remain

The United States and China have reached a notable truce in their prolonged trade war, following discussions in Geneva. The agreement stipulates that the bulk of tariffs imposed will be rolled back by Wednesday. This marks a significant step as the U.S. lowers its tariffs on Chinese imports from 145% to 30%, while China reduces its own from 125% to 10%.

While this development heralds a de-escalation, not all tariffs are removed, signaling a partial peace. The U.S. has decided to modify or reverse three executive directives that collectively imposed 115% tariffs on Chinese goods. Similarly, China has agreed to remove most of the tariffs set since April 2, although some older tariffs and specific duties remain intact, particularly on items like electric vehicles and aluminum.

Additionally, China has committed to lifting certain non-tariff countermeasures against the U.S., including the removal of trade restrictions on certain defense and tech companies. Yet, the specifics remain blurry, particularly surrounding the contentious rare earths export controls. The reconciliation plan shows progression, but questions linger, requiring further negotiations to solidify terms.

(With inputs from agencies.)