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China-US Suspend 24% Tariffs! 90-Day Grace Period Brings Economic Windfall

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Update time : 2025-05-13 17:34:00

I. Policy Highlights 

On May 12, the China-US Geneva Trade Talks Joint Statement announced substantial progress: 

 - The U.S. will remove 91% of additional tariffs imposed on Chinese goods 

 - China will reciprocate by lifting 91% of retaliatory tariffs 

 - Both sides temporarily suspend 24% of "reciprocal tariffs"

II. Key Impacts 

 1. Short-term relief:

Peak tariff rates drop from 145% (U.S.) and 125% (China) to 34% bilaterally. This significantly reduces trade costs, creating greater profit margins and market opportunities for import/export businesses. 

 2. Long-term dynamics

 The 90-day window serves as a critical negotiation period. Failure to reach agreement may reinstate the suspended 24% tariffs, potentially re-escalating trade tensions. Both nations maintain 10% baseline tariffs, indicating ongoing strategic tensions.

 

III. Market Outlook 

 1. Beneficiary sectors: 

 - Chinese exporters (electronics, textiles, furniture) may see increased overseas orders and expanded profitability 

 - Related stocks and corporate earnings could rally 

 - Trade recovery may boost employment in manufacturing, logistics, and cross-border e-commerce, particularly in coastal regions

 - Improved exports coupled with lower import costs may temporarily widen trade surplus and stabilize forex reserves 

 2. Risk advisory: 

 While former President Trump called 145% tariffs "unsustainable," failure in negotiations could trigger their return. Businesses should prepare contingency supply chain plans against potential policy reversals when the 90-day suspension expires.


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