U.S. President Donald Trump may gain an advantageous position in future trade negotiations with China following a recently negotiated trade deal. According to Neo Wang, lead China economist at Evercore ISI, both nations agreed to suspend most tariffs on each other’s goods during a meeting in Switzerland, resulting in a 30% tariff on U.S. goods entering China and a 10% tariff on Chinese goods entering the U.S. A joint statement announced the suspension of 24% of additional tariffs for an initial period of 90 days, which was met with a positive response from Wang, marking it as a “win-win outcome.”
Scott Bessent, Treasury Secretary, indicated that further talks could occur in the coming weeks to establish a more comprehensive agreement. The stakes are high for China, as they risk greater economic loss if the 24% suspension is not made permanent. With a Politburo meeting approaching, there is a growing pressure for Chinese policymakers to respond favorably to U.S. demands.
Wang suggested that Beijing will likely make concessions that could favor Trump’s political standing ahead of midterm elections, possibly through increased purchases or investments. The fear of not reaching a trade deal intensifies the urgency for China to address ongoing U.S. tariffs on fentanyl-related imports and concessions related to TikTok, which Trump has identified as a key priority. The deadline for TikTok’s sale or ban has been extended to mid-June, with Trump asserting that tariffs serve as a crucial economic tool for national security. Overall, the recent developments point toward continued high-stakes negotiations between the two nations.
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