Truce US-China Truce offers temporary comfort-and a lot of uncertainty

A Truce truce Between the United States and China, which it announced on Monday, companies will provide some relief, but also extend the type of economic uncertainty that makes it difficult for companies to plan for the future.

Starting May 14, the United States will reduce the maximum tariff rate on Chinese imports from 145 % to 30 %, including 10 % foundation tax in addition to imposing 20 % of fentanel. China will present its tariffs by 125 % on American goods to 10 %.

But it is likely that obtaining a long -term trade deal is likely to challenge, while the rate of low tariffs by 30 % may still lead to high prices for consumers.

“It remains to see whether the United States and China can approve a commercial deal that prevents customs tariffs from reversing within 90 days,” said analysts at the Investment Research Company in a report. “Until now, the United Kingdom has only reached an agreement with the United States, and this does not tell us much.”

Is a tariff 30 % permanent?

no. In the absence of an official commercial deal, there is no guarantee that President Trump will not again raise the definitions of China once the armistice ends after 90 days and that Beijing will not be divided either. US Treasury Secretary Scott Payette described the “new” floor “floor” in an interview with Bloomberg monitoring.

“This is just a temporary stop for 90 days that allows the two countries to work for an agreement,” said CBS Moneywatch experts.

Is the tariff by 30 % on Chinese imports still high?

Under the agreement, the United States will reduce the customs tariffs on Chinese goods from 145 % to 30 %. However, this represents a sharp rise in the level of American drawings on China before Mr. Trump took office.

“If you look at the place where we were on a prenatal day” or when Trump took office, this “agreement” is just an increase in a basic tariff to 30 % in all fields. A barrage of definitions On April 2. “While it is a corridor of exorbitant tariffs by 145 %, it still does not leave us closer to any concessions or reinstalling China more than we were.”

Customs tariff rates are not the only possible points of adhesion as countries continue to negotiate.

“The two countries have a lot of grievances in many dimensions, so not only customs tariff rates.” “The place where they are in other commercial barriers, commercial imbalance, and the United States accusing China of manipulating currency, so there is a lot for discussion. It makes sense to want to spend more time.”

What does the US -Chinese truce for economic growth mean?

There is good news here: If the tariffs of both countries remain in place, it is possible that consumer confidence will improve and enhance spending. This would help to contain inflation and help support the labor market, according to economist in Oxford, Grace Zimmer.

This announcement also reduces the prospects of the American economy Entry of the recession This year, according to experts. Ryan Sowet, the American chief economy in Oxford, reduced his expectations for stagnation to 35 % of more than 50 %.

Will China’s shipments begin to flow again?

Large and small companies in the United States warned that high tariffs will raise the prices of consumers, while some companies have canceled requests from Chinese factories due to high fees.

“It is very clear that Trump was staring at a barrel of a significant decrease in imports from China through the most crowded shipping season, as companies build inventory for Christmas and holiday season,” said Jac have CBS COLLABOTIVE for CBS Moneywatch. “There have been more ads from companies about combustion through their stocks and having to transfer costs to customers, or having to stop importing from China.”

Shipping shipments from China are expected to rise during the 90 -day tariff period, as companies collect their stocks to protect against fallen commercial conversations and high fees. As a result, shipping prices will rise, and they press smaller companies, whose margins are already thin.

“At the present time, you will see a great impulsion in trying to get imports from China in a 90 -day period. This will lead to charging logistics as happened in Covid, when everything has been opened as a backup,” Jacz said.

Will consumer prices continue to rise?

Companies still face additional costs with a 30 % tariff in place, and some of these expenses are likely to be transferred to consumers. But high prices can be less essential depending on how to deal with companies on the tariffs, according to Golaara, Georgia State University.

“If we have a mixture of some companies that deal well with the tariffs, we will not see a wide increase in inflation to a painful level. We may see mixed effects on different and specific products and sectors,” he said.

Other experts agree that temporary suspension is good news for companies and consumers.

“The definitions were to the point that they were creating this motivation so that she did not import anything from China,” Veronik de Roger, an older research colleague at the Mercatos Center at George Mason University, told CBS Moneywatch. “The advertisement is also good news because it means that the offer will not be restricted as it was.”

This does not mean that it is completely outside the forest. “There is still a significant increase in taxes for American consumers. We are still worse than we were,” said De Roger.

How do companies interact?

Companies are still struggling with great economic uncertainty, which makes it difficult to plan for the future.

“If you are a small company and do not know what your input will cost next week or in 90 days, it will be very difficult to do business in this unconfirmed environment,” said Jackers.

Kim Fakarella, founder and CEO of BOGG, a US -based beach company and an institution based in China, is scrambling to change some of its manufacturing to Vietnam and Syriaca at least because of the Trump administration tariff.

“We were looking into alternatives and we created viable sources in both countries, and we were working on manufacturing there,” she told CBS Moneywatch.

Then the White House announcement came on Monday. With the United States earlier this year raising the rural tariff on Vietnam and Sri Lanka to O46 % and 44 %, respectively, China may again be the Vaccarella option.

“We are now returning to the first box, because at 30 % is less expensive for manufacturing in China,” she said. “If the customs tariff remains by 30 % or decreases, it seems that we have spent a lot of money quickly in an attempt to increase production elsewhere, because that would have been more acceptable according to this current nightmare.”

command index From the optimism of small businesses it decreased every month this year, although it is still higher than its levels before the November presidential elections.

Vaccarella warned customers that the price of its company’s bags could jump early in July. “But 30 % can work with them,” she said. “There may be a small increase, but it will not be 145 %.”