In a significant turn of events, the United States and China have agreed to reduce tariffs as part of ongoing trade negotiations. The new arrangements come on the heels of a long-running tariff war. This conflict has affected both countries throughout the entire year so far. Former President Donald Trump had originally imposed the tariffs to encourage American consumers to purchase domestically produced goods and to bolster manufacturing jobs across the country.
Under the new pact, US tariffs on Chinese imports will drop significantly from 145% to 30%. Likewise, recently raised Chinese tariffs on certain US imports will fall from as high as 125% to just 10%. 1112, cited Trump’s framing of the negotiations between the two countries as a “total reset” of their bilateral trade relations. He expressed that this amendment is a big step in the direction of providing better terms for both parties.
The United States imports about three times as much from China ($440 billion) as we export to China ($145 billion). Trump has long railed against this trade deficit, calling for a fairer deal.
The UK government just recently concluded an early agreement with the US to address various non-tariff trade issues. This deal only covers section 232 tariffs immediately for steel and aluminum products. This deal does include important concessions, especially in reversing substantial tariff hikes on steel and aluminum products and automobiles that Trump had utilized. In fact, the Trump Administration’s blanket 10% tariffs on imports from other countries are still in place. This will apply to the majority of UK goods coming into the US.
The UK government asserted that the agreement aims “to secure thousands of jobs across key sectors, protect British businesses, and lay the groundwork for greater trade in the future.” Furthermore, they emphasized that the deal is “not designed to undermine mutually beneficial economic relations with any third country.”
China has expressed concern about the establishment of a UK-US nuclear submarine pact. They are particularly concerned that it would stop Chinese suppliers from routing US-bound goods through the UK. Lin Jian, a spokesperson for China, stated, “As for the trade agreement… between the UK and relevant countries, I would like to point out that cooperation between countries should not target or harm the interests of third parties.”
Despite these tensions, the UK government reassured that there is “no such thing as a veto on Chinese investment in this trade deal,” according to the Chief Secretary to the Treasury. This announcement brings some relief to Chinese enterprises. Now they are worried about being locked in by prohibitive procurement rules included in the new UK-US trade deal they are negotiating.