US and China Reach Partial Truce in Trade War

Trade tensions were somewhat alleviated following the recent trade negotiations between the US and China in London. The US will impose a 55% tariff on Chinese goods, which is lower than the previous 145%, and China will set 10% tariffs on US goods. In addition, China has committed to resuming its export of rare earth minerals to the US and relaxing certain limitations on sending some chipmaking machinery as well as lower-tier semiconductors.

In addition to the tariffs and rare earth elements, the agreement also includes permits for Chinese students to continue their studies at US universities and China's involvement in reducing fentanyl trafficking. These discussions took place amid escalating trade deficits between China and the United States. Despite the agreement, concerns persist about the potential impact of higher tariffs on American businesses and consumers, particularly small businesses.

The trade dispute has been resolved through the agreement, but there are still significant tariffs and export restrictions in effect. The present tariff pause is about to end and formal signatures are due soon.... [MP]. The US-China economic relationship is likely to experience uncertainties, as negotiations continue, particularly with regards to technology exports and sector-specific exemptions.