The recent 90-day pause on tariffs between China and the USA has brought a mix of optimism and caution in global markets. President Donald Trump announced a draft for a "very, very strong" trade agreement with China, emphasizing the potential opening of Chinese markets to US businesses. This agreement has led to a reduction in US tariffs on Chinese goods from 145% to 30% and Chinese tariffs on US imports from 125% to 10%. The easing of tensions has positively impacted global stock markets and reduced recession fears, with analysts predicting increased imports during the reprieve.
Despite the truce, uncertainty remains. Chinese companies express cautious optimism, wary of Trump's unpredictable policies. Many are diversifying their markets to manage risks. Meanwhile, China's strategic partnerships, like the Belt and Road Initiative, continue to expand its global influence. However, the initiative faces criticism for potentially increasing debt dependency among partner countries.
The tariff pause has also influenced other international relations. China lifted sanctions on European Parliament members amidst the US tariff war, while the UK faces challenges aligning with the US trade deal terms that exclude Chinese goods. Overall, the temporary tariff reduction offers a momentary reprieve, but long-term stability is still uncertain.
