New Delhi13 minutes agoAuthor: Aditya Mishra
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On April 2, Trump announced a reciperook tariff on about 100 countries. (Trump-Jinping File Photo.)
The US and China have almost eliminated the growing tariff war. Both countries made a trade deal in Geneva and announced 115% tariff cuts. The agreement between the two is currently for 90 days.
The US has put 145% tariffs on Chinese goods and 125% on US goods. After this cut, China will now have 30% tariffs and 10% on the US.
On this agreement, the US said that differences with China were not as big as thought. But there are many other reasons that are responsible for this agreement …
1. Economic losses from trade-war:
145% US tariffs on Chinese imports and 125% counter -tariffs of China put a lot of pressure on the $ 610 billion business annually between the two.
The rising prices on US retail business were having a direct impact. Due to this, the consumer experience was decreasing. On the other hand, production in Chinese factors slowed down due to low demand in the US. Reducing these pressures and stabilizing markets is to reduce tariffs.
2. Fears of global recession:
The growing trade war was seeing a lot of uncertainty in the global market. The interruption in the supply chain and the decrease in trade flow increased the possibility of recession in the world.
As the world’s largest economies, the pressure to reduce the stress of each other to prevent major economic decline on the two countries was from all over the world.
3. US trade deficit concern:
The US declared a $ 1.2 trillion trade deficit with China as a national emergency. The interaction between the two on tariff cuts is part of the strategy to remove this imbalance. In this, the US is emphasizing on the terms of Fair trade and increasing the sales of its goods in China. The same discussion was held mainly in the Geneva Agreement.
4. Political pressure inside the country:
Traders and consumers in the US were upset with high price. At the same time, there was a crisis of economic recession in China due to production and reduced export. Due to which the leadership of the two countries was becoming a pressure to eliminate trade war from inside the house.
5. Strategic need for cooperation:
Apart from business, the two countries are facing challenges like climate change, supply chain resilience and geo-politics tension together. With this tariff deal, the path of interaction between the two countries in future will be open.
Chinese goods would become expensive in America due to increase in tariffs
In the easy language of imposing 125% tariffs on China, it meant that the $ 100 goods made in China would go to the US and become $ 225. Due to the expensive Chinese goods in the US, their demand decreased and sales decreased.
Trump announced a tariff worldwide on 2 April
Trump has said that if a country imposes more tariffs on American goods, then America will also increase more tariffs on things coming from that country. He called it a reciperook tariff.
On April 2, Trump announced the reciperook tariff on around 100 countries, saying, “Today is Liberation Day, which America was waiting for a long time”.
Tariff stopped for 90 days, increased to 125% on China
On 9 April, Donald Trump postponed the reciperook tariff on all other countries except China for 90 days. Trump said- China has not shown respect for the global market.
For this reason, I am increasing that tariff to 125%. It is expected that China will soon understand that the days of looting the US and other countries have gone.