90-day US-China tariff deal meets nearly all of Beijing's 'main demands'

U.S. and China's 90-day tariff agreement, which will kick in by May 14, 2025, sees the deal meeting nearly all of Beijing's main demands, Bloomberg reported.

Under the agreement, the U.S. will reduce its tariffs on Chinese imports from the current 145 per cent to 30 per cent, while China will cut its tariffs from 125 per cent to 10 per cent.

In the joint statement, the U.S. and China said they recognised the importance of their bilateral economic and trade relationship to both countries and the global economy.

The temporary agreement between the two largest economies saw a surge in the U.S. dollar and stocks, as well as Chinese equities.

Dialogue is the only effective way to address differences

According to Chinese state media Xinhua, while glad about the resumption of dialogue, China is prepared for a "long-term, complex, and arduous nature of resolving differences between the two countries (China and U.S.)".

However, it maintains that "the positive outcomes of the latest talks reaffirm that for major countries, equal and constructive dialogue— not confrontation— is the only effective way to address differences."

"Given the distinct national contexts and priorities, disagreements are to be expected. What matters most is that such differences are managed with mutual respect for each other's core interests and through sustained dialogue."

Tariff war

"China's firm countermeasures and resolute stance have been highly effective," a social media account which CNBC claimed to be linked to China's national broadcaster CCTV wrote.

The tariff war between China and the U.S. has been brewing for some time.

On Apr. 2, U.S. President Donald Trump's much-touted “Liberation Day” saw the imposition of widespread tariffs, one of the highest being a 34 per cent tariff on China.

In contrast to other world leaders, Chinese President Xi Jinping refused to get on the phone with Trump, despite the latter's attempts to get on a call with the Chinese leader, Bloomberg reported.

According to the U.S.-based media company, Beijing instead cut key interest rates and pursued other courses of action to secure China's economy.

While China began to feel the economic pinch, Xi enjoyed a wave of nationalist sentiment across the country, encouraging him not to give in to pressures from the U.S..

Trump, on the other hand, faced growing demands from business groups, market players, and fellow party members who feared losing their seats in mid-term elections next year.

"Economic power matters"

Gerard DiPippo, associate director of the RAND China Research Centre, told Bloomberg that "the lesson is economic power matters".

“For Beijing, it’s a strategic vindication, and one that makes Xi’s focus on manufacturing and self-reliance harder to argue against, at least from an economic security perspective," DiPippo wrote, as quoted by Bloomberg.

Amid progress between the two economic giants, Trump said on Monday (May 12) that he could speak with Xi at the end of the week, as quoted by Reuters.

Trump said that the discussion between the two countries this past weekend had resulted in a "reset" in bilateral relations.

"The relationship is very good," Trump said about China during a Monday (May 12) press conference.

"We’re not looking to hurt China. China was being hurt badly. They were closing up factories. They were having a lot of unrest, and they were very happy to be able to do something with us."

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Top image via AFP and White House