US-China Working Out Their Differences?
Sources in the US government have confirmed that a thaw in US-China trade tensions may be on the way, and soon. The Trump administration has reportedly agreed in principle to put off the next round of tariff hikes which were to roll out on December 15 and is even considering reducing some other tariffs by 50% in exchange for increased imports of US farm goods by China.
China looks all set to import $50 billion worth of agricultural products from the US next year, twice as much as it had imported back in 2017 before the trade war had begun. In return, the US will suspend upcoming tariff hikes on around $156 billion worth of Chinese goods.
While markets await official confirmation, this positive development is sure to help dissipate building concerns about a possible escalation in the trade war. Sources speaking to Reuters confirmed that the US trade team is willing to offer more tariff cuts in favor of working towards the phase one trade deal soon.
Once the phase one trade deal gets finalized and signed, markets are sure to heave a sigh of relief as the tariffs war had dented economic growth not just in the US and China but also in major economies worldwide. However, there remains no clarity on whether this latest proposal has been agreed to officially yet by both nations.
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