The ongoing trade war between the US and China keeps the finance industry on edge. Chinese officials have confirmed its next wave of tariffs one US-made cars and corn will not go through. Both countries are in the process of reconciliation, at least temporarily.
A Pause in new Tariffs
Over the past few months, the US and China have played a game of one-upmanship. If either country announced new tariffs on specific goods, the other would try to go one step further. This ongoing debacle has put a lot of strain on the global economy.
It now appears that Chinese officials will not introduce new tariffs. Initially, the goal was to put new tariffs on corn, US-made cars, and auto parts. Those higher prices and costs will not be pursued, at least at this time.
Any existing tariff or surcharge will remain in place until further notice. However, both countries appear to be negotiating a trade truce of some sort.
This truce initially took shape a few days ago. Additional tariffs on Chinese consumer electronics and toys have been put on ice indefinitely. Furthermore, penalties levied on goods imposed in September 2019 have been cut in half.
Lots of Work to be Done
Despite this trade truce taking shape, a lot of unanswered questions remain. The Chinese government will commit to buying US farm goods and other products. In exchange, the United States also have to make an effort of sorts. Details regarding that aspect remain shrouded in mystery, for now.
Work is underway to create a more comprehensible trade truce moving forward. What that new “phase” will entail exactly, is very difficult to predict. The world’s two largest economies will always remain at odds in one way or another.