 "US President Donald Trump waves next to Chinese President Xi Jinping after attending a business event at the Great Hall of the People in Beijing on November 9, 2017, during his first term. (Photo: AP)")
The White House appears to have blinked in the trade war with China.
US President Donald Trump has plunged the countries into a spiralling trade war. The United States currently has 145 per cent tariffs on China, which extend up to 245 per cent on certain goods, and China has retaliated with tariffs to the tune of 125 per cent.
Even though Trump began the trade war to soon bring China to its knees to reach a favourable trade, he as well as his senior advisors have started talking about an off-ramp. There have been reports that say that Trump may slash tariffs by nearly half in the coming days.
Claudio Irigoyen, the head of global economics at Bank of America Global Research, said on Wednesday that US-China trade tensions have now likely peaked.
“In general, we’ve seen the worst in terms of escalation. So we should see more de-escalation from here — the pace will depend on the relative pain on the economy in China versus the US,” said Irigoyen at Semafor’s World Economy Summit in Washington DC on Wednesday.
Trump’s tariffs to be reduced to 50-65%: Report
Amid signals that the White House is seeking an off-ramp in the trade conflict with China, the White House has reported a senior official as saying that tariffs on China are likely to be reduced to the 50-65 per cent range.
The newspaper further reported that the Trump administration is also considering a tiered way to impose tariffs in line with a House committee proposal last year.
Such a regime would have 35 per cent tariffs for goods the United States would not consider as a threat to national security and at least 100 per cent for goods considered as strategic to US interest, according to the newspaper.
Final tariffs won’t be anywhere near that high, says Trump
In a sign that he is looking for an off-ramp soon, Trump on Tuesday referred to the 145 per cent tariffs presently imposed on China and said that final tariffs “won’t be anywhere near that high”.
“We’re going to be very nice, they’re going to be very nice, and we’ll see what happens,” said Trump.
Resorting to his staple stance, Trump said that “China was taking us for a ride”.
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More Shorts“But ultimately, they have to make a deal because otherwise they’re not going to be able to deal in the United States. So we want them involved, but they have to ‒ and other countries have to ‒ make a deal, and if they don’t make a deal, we’ll set the deal. One hundred and forty-five per cent is very high, and it won’t be that high. No, it won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero ‒ used to be zero. We were just destroyed. China was taking us for a ride,” said Trump.
Separately, Treasury Secretary Scott Bessent spoke at a closed-door investor summit on Tuesday that the trade conflict with China is unsustainable and the two countries need to find ways to de-escalate, according to Bloomberg.