Surprise!
The U.S. and China have agreed to a major deescalation, rolling back tariffs on each other for three months while they negotiate a permanent deal.
Good Morning!
Here are today’s highlights:
Gene Marks says business leaders who are already getting rid of employees and relying on artificial intelligence should fire themselves.
Nobody asked for it, but the tariffs have created an unexpected marketing opportunity.
The temporary deal with China offers some hope to businesses whose strategy has been to outlast the tariffs.
Jim McCann, founder of 1-800-Flowers, has decided it’s time to step back.
THE CHINA TRUCE
For now, the base rate on imports from China will be 30 percent (spoiler alert: that’s still high): “A few days ago, it would have seemed almost impossible, but on Monday, to the surprise of global investors and everyday businesses fearing a trade war, the U.S. and China agreed to a major de-escalation. The world’s two biggest economies unwound for now most of the tariffs they had imposed on each other since April in a tit-for-tat battle that had threatened to upend the global economy. The U.S. agreed to lower to 10 percent percent the so-called reciprocal tariffs levied on China, which President Trump had ratcheted up to 125 percent. China, similarly, agreed to cut its retaliatory tariff on U.S. goods to 10 percent from 125 percent.”
“Other tariffs on Chinese imports remain in place, however, including a 20-percent levy linked to China’s alleged role in the fentanyl crisis. That means most Chinese imports into the U.S. will face a 30-percent tariff overall. There are also separate levies on imports of steel, aluminum, and autos, as well as some specific levies on Chinese goods still in place from Trump’s first term and former President Joe Biden’s term in office.”
“Beijing agreed to suspend or cancel a range of non-tariff retaliatory measures it deployed to hit back at Trump’s tariffs, potentially including restrictions on exports of critical minerals used in batteries and other high-tech applications. Speaking to reporters in Geneva, Treasury Secretary Scott Bessent said the U.S. was seeking ‘a long-lasting and durable trade deal’ with China. He said a clear break between the two economies wasn’t desirable and ‘neither side wants to decouple.’”
“Trump had suggested just days ago that an 80-percent tariff on Chinese goods ‘seems right.’ The pact marks a significant reprieve for the global economy. Steep tariffs had led trade between the U.S. and China to virtually dry up, heightening inflationary pressure on the U.S. and threatening the export engine powering Chinese growth.” READ MORE
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