Surprise China trade deal gooses markets

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.wsj.com/economy/trade/surprise-u-s-china-trade-deal-gives-global-economy-a-big-reprieve-b486da7b?mod=WSJ_home_supertoppermiddle_pos_3

Surprise U.S.-China Trade Deal Gives Global Economy a Reprieve

Tariff reductions are bigger than expected and Bessent says ‘neither side wants to decouple’

By Brian Schwartz and Jason Douglas, The Wall Street Journal, Updated May 12, 2025

Key Points

  • US and China agree to de-escalate trade war, unwinding most tariffs imposed since April.

  • Both countries will lower reciprocal tariffs to 10% for 90 days to allow trade talks.

Other tariffs remain, including 20% levy related to fentanyl; US seeks lasting trade deal.

…
The world’s two biggest economies unwound for now most of the tariffs they had imposed on each other since April in a reciprocal battle that was threatening to stoke U.S. inflation, crash China’s export engine and upend the global economy…

The U.S. agreed to lower the base level of tariffs on most Chinese goods to 30%, from 145%, while China said it would cut its levies on U.S. products to 10% from 125%. The 30% rate imposed by the U.S. includes a levy related to China’s alleged role in the fentanyl crisis plaguing the U.S., an issue in the weekend’s talks.

The U.S. tariff on many Chinese products will be higher than 30%. U.S. duties on steel, aluminum and autos remain in place, as do some earlier tariffs on certain Chinese goods imposed during President Trump’s first term in office and that of former President Joe Biden…

China said it would cancel or suspend some nontariff trade measures it had imposed to hit back at the U.S., potentially including easing export restrictions on critical minerals used in batteries and other high-tech applications. … [end quote]

Scott Bessent is the Treasury Secretary. It’s pretty unusual for a Treasury Secretary to lead trade talks but the WSJ has great confidence in him and calls him “the adult in the room.”

The markets responded very positively.

It’s hard to say what the final agreement will contain but it can’t be worse than “Liberation Day.”

Wendy

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Yes, we’re coming down from such a high point!

And Commerce Secretary Lutnick said the tariffs are here to stay. I’m so confused…
Anyway, the market is happy so we’re all happy!

Pete

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When the draconian tariffs were announced, TIG said there would be no exceptions, like there were the last time. Since then, there have been exceptions for Mexican auto parts. There have been exceptions for golf club cronies who drive Range Rovers. Now, exceptions for China.

And we get to go through all this, again, in 90 days.

oohhh…the drama!!

Steve

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Now, that is confusing. Generally, tariffs on steel, aluminum, and cars, is 25%. So, is the tariff on those goods from China 25%, or >30%, or 125%?

Every time, TIG opens his piehole, it generates more questions.

Steve

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This is not a trade deal. The media needs to stop calling it that. It is us back-tracking, plain and simple. Nothing more than that. Capitulation. So much for liberation day. So tired of “winning”.

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That’s the intention. Keep people confused and nervous. Easier to herd off a cliff.

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And it is temporary as well. Trade deals take years to work out. TIG has never negotiated anything so he doesn’t understand that.

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If you aren’t angry about what is going on this last few months there is something wrong with you. Yes, I’m angry.

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Relax. It is going to get much worse for the corrupt left. Clench.

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It’s amazing that he doesn’t see it, isn’t it. $2B to Jared. $400M aircraft. Crypto coins. Trying to overthrow an election that he lost fairly. Deporting citizens for no just cause. Ignoring Federal Judges. Ignoring SCOTUS. The list of corrupt activities by DonOld is simply amazing. And yet he keeps thinking it’s the left that is corrupt.

Now… where is that thread about how education in America is failing…

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