- The decision on proposed US tariffs on $ 160 billion of Chinese imports will be deferred from 15 December
- China will buy $ 50 billion worth of agricultural products and other items from the US next year
The first-stage trade deal between the US and China was agreed on Thursday. This will put an end to the trade war between the two countries for the last 17 months. According to the US media, President Donald Trump has signed the deal. According to the terms of the deal, the proposed US tariff (import duty) on $ 160 billion of Chinese imports will be deferred from December 15.
The first-stage trade deal between the US and China was agreed
Products that were to be subject to tariffs included consumer electronics and toys. Some tariffs already imposed on goods coming from China will also be cut by 50%. As part of the deal, China has agreed to buy $ 50 billion worth of agricultural produce and other items from the US next year.
US farm exports down 72% in 12 months
A trade deal will boost America’s exports of agricultural products. Due to the trade war, China stopped buying agricultural products from America. According to data from the US Department of Commerce, US farm exports dropped from $ 25 billion to $ 7 billion in the past year.
China’s GDP growth reaches 27-year low due to tariff war
The economy of both countries was suffering due to the trade war. US GDP growth declined to 2% in the September quarter. Last year was 3% in the September quarter. China’s growth in the September quarter this year was 6%. This is the lowest in 27 years. According to the estimates of the International Monetary Fund, tariff war resulted in a decline of 0.6% in US growth and 2% in China’s growth.
US companies expect to save $ 2.5 billion every month
In the past 17 months, both countries have increased duties or imposed new duties on each other’s imports several times. According to data from the last few months, American companies are paying the government $ 5 billion import duty every month on the import of Chinese products. If the import duty is reduced by 50%, the companies will save $ 2.5 billion every month.
The US, Asian stock markets boom
The report of the deal between the two major economies of the world gave a boost to the stock markets around the world. The US stock market index Dow Jones closed up 0.79% and the Nasdaq 0.77% on Thursday. Other Asian markets including India are also seeing a boom. The stock markets around the world had suffered a lot due to the trade war.
Trump hinted at a deal 2 months ago
The talks between the US and China had been going on since October. US President Donald Trump only hinted that a first-stage deal could be reached by the end of this year. However, Trump’s statement in the past had created a situation of apprehension about the deal. Trump said that he could wait until the 2020 elections for the deal.