The United States and China have agreed to phase out tariffs that have been imposed in their prolonged trade war. American and Chinese negotiators have concurred to cancel certain additional tariffs in different phases, although the interim deal has not yet been finalized. The deal would likely include Beijing lifting restriction on US poultry imports, while Washington would refrain from imposing new US tariffs on $156 billion worth of Chinese goods.
It would be in the interest of both countries to reach a deal phasing out tariffs. President Trump is eager to prove progress on his confrontational approach to China with looming elections, while China is looking to recover from its recent economic slowdown. Markets have already reacted positively to the news, with Hong Kong’s Hang Seng index at 0.6% higher, S&P’s 500 Futures increasing 0.4%, and the Dow Jones Index climbing 0.7%. The deal could have wider economic implications at a time when officials around the world are on edge regarding a global economic slowdown.