The Implications of the Trade Agreement between China and the United States for the Global Economy and the Status of Fentanyl: An Australian Diplomat and Trade Negotiator
“Are we going to rebalance the fundamental nature of the global economy in which China is a massive manufacturing hub and the US is a consumption economy? No, I don’t think so,” said Dmitry Grozoubinski, executive director of Geneva Trade Platform and a former Australian diplomat and trade negotiator. Is there something the two sides can do to make each other happy? There must be.
The deal, announced after negotiators from both countries met in Switzerland over the weekend, brings U.S. taxes on Chinese goods down to 30% from the 145% imposed by President Trump in early April. China agreed to lower its taxes to 10% down from the 125% it imposed in response to the U.S.
The president of the European Union Chamber of Commerce in China said that they are encouraged by the decision, but they are still uncertain. Adequate predictability is important to maintain normal operations and make investment decisions.
The previous eye-watering tariff rates, which ratcheted up throughout April with retaliatory tariffs on both sides, had effectively paralyzed trade between the world’s two largest economies and shocked consumers and small businesses in the U.S. who suddenly saw their orders in China more than double in price. If the talks between the two countries sour, the tariffs could be pulled, which is welcome by importers.
Both sides are committed to achieving that, said Bessent, who thinks neither side wants a decelerating.
The Chinese made progress this week which led to the establishment of a consultation mechanism to continue addressing trade issues in the future.
The American levy on Chinese goods will fall to a base levy of 30% for the first 90 days, while Chinese levies will fall from at least 125% to 10%.
The talks were led on the Chinese side by Vice Premier He Lifeng and on the U.S. side by Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent.
“We concluded that we have shared interest and we both have an interest in balanced trade,” Bessent said at a press conference on Monday. There is a “positive path forward” on the two countries working to fight the problem of Fentanyl, according to Greer.
Li Chenggang is a diplomat with China’s commerce ministry, and he said that “Any potential deal to be reached will definitely by in the development interest of China’s own.”
Vice Premier He described the atmosphere of the meeting as “candid, in-depth, and constructive” at a press conference following the meeting, saying it achieved “substantial progress and reached important consensus”.
Trading with the United States in the Light of Trade-Right Negotiations: The U.S.-Chinese Deal and the Prospect for a 3-Month Window
Stocks opened sharply higher Monday after the U.S. and China announced a temporary break from triple-digit tariffs that had brought much of the trade between the two countries to a standstill in recent weeks.
Many businesses stopped deliveries because they were afraid of paying a triple-digit tax. Cargo traffic at the Port of Los Angeles last week had fallen by more than a third from a year ago, raising the prospect of supply shortages in the near future.
Ross pulled two cargo containers off ships when the 145% tariffs took effect. She’s trying to get as much merchandise as possible to the U.S. due to the lower tariffs.
Jay Foreman, whose company makes Tinker Toys, Lincoln Logs and other toys in China, got news of the deal at 4:30 am, and immediately called associates in Hong Kong to begin scheduling shipments.
“We’ve been holding everything at the factories and at the ports, because we didn’t want risk putting anything on containers with a 145% tariff,” Foreman says.
Some businesses may race to produce and send products early for the Christmas season in order to avoid higher tariffs in the fall. But that is also a risk because it’s possible the administration will lower tariffs at the end of the three-month window.
“Right now, I’m just trying to get through the next four to six weeks,” he says. I will probably need another three to four weeks to figure that out, whether I double shift the factories or not.
The Implications of Trump’s Trade Agreement on the U.S. Supply Chain and Fed Expansion for Inflation and Uncertainty
President Trump paused tariff hikes on other countries in early April for 90 days, saying more than 75 countries had reached out about seeking deals with the U.S. Some of the tariffs could be back in early July.
Swonk said it’s going to be very hard for the Trump administration to hammer out 90 negotiations in 90 days with other countries, adding that even those deals that have been announced have very tentative rules around how they’re implemented.
Swonk said that the last time the U.S. experienced aflation was in the 70s. During that time, oil prices spiked, as did the cost of goods and Americans accepted high inflation as a part of life.
“It’s not just a one-time event, it’s also not just the fact that the tariffs have been applied in a different way,” Swonk said. The supply chain is experiencing additional disruptions due to a multiple time event.
This combination is what the Federal Reserve worries about most, Swonk said. The Federal Reserve kept interest rates steady because of concerns about economic uncertainties and the risks of higher unemployment and inflation.
Swonk said the past 40 days has resulted in a paralysis on importing goods and now panic to bring them in. Those two factors, she added, can make for stagflation, a period during which the economy experiences higher costs for goods, higher unemployment and slower economic growth.
“This is the same problem where all of a sudden a lot of freight shipment fees went up in the wake of the epidemic, which was an additional cost in addition to the tariffs,” she said.
The Emperor’s Last Emperor: When the U.S. Economy Decides to Close It Like a Ramp or Shut It Down
“These sorts of stop-go programs are the things that can make for very big policy mistakes when considering inflation and how it impacts the U.S economy,” Swonk said, adding that it’s easier to shut factories down than ramp.
She said it will take some time for the goods that have been released to reach the U.S. market because of the lower tariffs.
“Everyone all of a sudden slows down to a crawl to try to creep across the stoplight, not knowing which person’s supposed to go next,” Swonk said. “And some opt out entirely and do a U-turn, wait for traffic to clear or the stop light to be fixed.”
The stock market surged after the deal was announced. But uncertainty is a major factor that will continue to weigh on the U.S. economy, Diane Swonk, chief economist at accounting firm KPMG US, told Morning Edition.
The man is said to be the conqueror. The president said that everyone had to suffer some short-term pain in order to have long-term gains. So our feeling is that everybody in the supply chain is going to be willing to take a bit of the burden of this. Consumers will be paying a little bit more. The retailer is going to have to take a bit of a smaller margin. We’ll take a little bit of a smaller margin. The China factory will. And if everybody gets together and shares the burden, everybody will feel a little pinch, but not a huge pinch. If the consumers, the administration and retailers put this burden on the manufacturer and force them to eat all the 30% tariffs, it will cause problems for businesses because they don’t have these kinds of profit margins. Buying war bonds back in the day was something that everybody had to help out with. We will see if this all works. The juryVerdict will come in on November 6th, 2026. And we’ll see whether this policy is right or wrong.
It was 4:30 in the morning when I got the news. “I literally jumped out of bed, called my factories in China, and started booking trucks and containers. My operations team reminded me that it isn’t just a flip of a switch.
“We can be in business,” he said. If manufacturers like ourselves are to bear the entire burden, we are in trouble. Everyone — retailers, factories, and consumers — needs to share the pain.”
He estimates retail prices could rise 10% to 15%, if everyone in the supply chain absorbs part of the cost. Otherwise, companies with slim margins won’t survive.
During the holidays, is a crucial time for toymakers, and at the height of the tariffs, he feared his shelves would be empty. But Foreman remains cautious. He says the market could be paralyzed if the administration reverses course again.
The changing trade policies of the US and China are having an effect on his business.
Martin: So 30% tariff is better than 145%. But you were telling me that it’s like drinking spoiled milk instead of poison. Very vivid imagery, by the way. Why do you say that?
Martin: You were worried that you couldn’t sell anything at Christmas. Which, frankly, let’s just be honest, would have shut you down, right?
The Foreman Experiment: Christmas in Switzerland, and What Have We Learned about It? “We have to settle down”
Foreman: Oh, for sure. 145% [tariffs] would have put my business and many, many others out of the market and out of business and [caused] a huge shortage of merchandise for the holiday season. The 30% gets things moving. You’re likely to see prices increase, if everybody takes their part, about 10 to 15%. And, you know, we would assume, with the stock market staying high and unemployment staying kind of at a reasonable level, that the market will be able to absorb that. Things will move on. We will see if the president’s experiment works or not.
The man is called Foreman. Well, if he makes another U-turn, it’s just chaos for everybody again. And this is where they’ve got to sort of settle down. We were fortunate that we got the team to go to Switzerland. The team is still working with all of the other markets. And the president, of course, can lob a grenade into the middle of this at any time. They have to let people do business this year because they have to settle down. Let’s have Christmas.